Unemployment worse than ever?

The corona pandemic has had a dire effect on the Dutch economy and more so on the labour market. Following the outbreak of the coronavirus, the Dutch labour force sharply shrank. In June, the Central Agency for Statistics (CBS) recorded a total of 404,000 unemployed individuals in the country. This number represented 4.3 per cent of the labour force, higher than the 3.6 per cent of May.

How it is measured
Measuring unemployment during the corona pandemic has presented challenges to CBS. The data for the unemployed and the employed labour force are obtained through monthly surveys collected from a wide base of Dutch residents. The individuals participating in the survey are selected in such a way that a representative picture of the entire population can be gained.Normally, the surveys are conducted via the internet, telephone and home visits. As a result of the corona measures, CBS temporarily stopped surveying at home. Instead, those who were to be approached at home were being encouraged to participate through online surveys and telephone. However, the response was not as good as expected.

Who is counted
When it comes to unemployment, the Netherlands follows the definition set forward by the International Labour Organization (ILO). A person is unemployed when he or she satisfies the following criteria: does not have a job, has been looking for a job in the previous four weeks and is available to work within two weeks. Since not all those who are not employed are looking for a job and are available for work in the short term, they are not considered as unemployed. It is also important to remember that not every unemployed person receives unemployment benefits. Conversely, not everyone who receives unemployment benefits is fully unemployed. For example, when a person loses their job and finds new work for fewer hours, s/he can still receive benefits.

No jobs but not unemployed
In April and May, there was a decrease in the number of employed individuals. However, this was not accompanied by an increase in the number of unemployed persons. This was simply because fewer people were looking for jobs during this period, regardless of not having jobs. Thus, they were not classified as unemployed. May had 263,000 unemployed people, who had been in work three months earlier, but were not looking for jobs in May. Although there were 200,000 in June, which was lower than the previous month, the number was as high as before the corona measures had come into effect.

Unemployment number shoots up
Although the number of those without jobs but not unemployed was high, the number of unemployed persons had actually shot up during the period. In February, there were 56,000 people looking for jobs. This number was the lowest since 2003, when the figures were first published monthly. In May, it rose to 118,000 and by June the number stood at 162,000. Since the beginning of the pandemic, June represented the highest peak in the number of unemployed ever recorded. In fact, June had the highest number of unemployed persons since the first registration in 2003.

More difficult to find a job
In addition to the high number of unemployed during the period, there were fewer job seekers than usual who managed to find work in the past three months. The number of people who had been looking for jobs in the last three months and who managed to find something, had decreased to 39,000. This was the lowest since 2003.

The state of unemployment benefits
The number of current recipients of unemployment benefits has remained virtually unchanged in June compared to May. The UWV paid out 33,000 new unemployment benefits in June. That was less than May, when 42,000 new benefits were disbursed. At the end of June, UWV was paying 301,000 unemployment benefits in total – a total of more than 60,000 new unemployment benefits since the end of February.However, there was a small silver lining: the number of new jobless people seems to have reached a ceiling. June was the first month since March in which the number of unemployment benefits had not increased.

Written by Stephen Swai