S&P Global warned that job losses in Asia might potentially double as pandemic disturbs economic sectors. Additionally, there is also a possibility that some of these jobs might not come back soon.
“Unemployment rates across Asia-Pacific could rise by well over 3 percentage points, twice as large as the average recession,” S&P’s Asia Pacific Chief Economist Shaun Roache stated.
Accordingly, the coronavirus pandemic and its lockdown have taken its toll on employment in Asia-Pacific region. As governments in the region extend lockdown, the economy will possibly worsen as unemployment rates increase.
The sector that suffers the most from this situation is the services sector. The sector mostly requires human-to-human contact and it is in contrast to the objectives of social distancing.
What is worse is that nearly 50% of workers in Asia-Pacific work in services sector. Particularly, in Japan and South Korea, services sector play an integral role in job creation.
Job Losses in Asia-Pacific
Given the jeopardy caused by COVID-19 outbreak and its countermeasure, almost all countries in Asia-Pacific suffer from increasing unemployment rates. In countries except for Singapore, job busts are quicker than job recoveries.
Among major economies in the region, the largest increase in unemployment rates happen in Australia, Hong Kong, New Zealand, and South Korea. The data ranges from back then in 1980 until now.
In China, agricultural jobs have decreased exponentially. The workers are mostly shifting to other sectors such as hospitality instead of factories (manufacturing).
The rise of employment rates in China’s hospitality sectors has increased five times larger than that of factories over the past two decades. With the rising damage in services sector, the escalation of unemployment might be greater than the preceding cycles.