According to data from Statec, the number of salaried jobs in August exceeded the figure recorded in February of this year. In absolute terms, the "job creation machine" has thus already compensated for the losses caused by the coronavirus.
Fondation Idea noted that these new jobs benefit both residents and cross-border workers. However, due to the nature of the sectors in which many cross-border workers are employed (shops, catering, etc.), the latter's return to work has on average been slower than that of residents.
Despite the loss of 9,055 jobs in march and April, the Grand Duchy has since seen the creation of 9,761 positions. This is all the more impressive when compared to neighbouring countries: even during the first half of the year, employment in Luxembourg fell by just 0.3%, compared to 1.1% in Belgium, 1.4% in Germany, and 2.8% in France.
Luxembourg is also one of the only European countries to have gained jobs between the 2nd quarter of 2019 and the 2nd quarter of 2020 (+ 1.4%). "This resilience of employment confirms that the partial unemployment scheme set up to protect businesses and help households has allowed significant labour retention," according to Fondation Idea.
Even though Luxembourg is a "job creating machine", it has not been unharmed by the crisis, according to Fondation Idea. It could have done much better.
At the end of June, more than 471,700 people were working in Luxembourg. That is 6,560 more than a year ago. But referring to the trend of recent years, without the crisis, "the country would have had 7,530 additional jobs". Beyond the exact number, the distribution of "missing" jobs bust be kept in mind. According to Fondation Idea's calculations, these josb would been in the sectors of trade, transport, housing hospitality, and specialised activities or administrative services.
In August, the country still had nearly 1,900 more unemployed people than before the confinement (6.4% unemployment in August compared to 5.5% in February). Although the general trend is downward, long-term unemployment has increased: in August, Adem registered a 29% increase in those registered for more than a year.
For Fondation Idea, emphasis should now be placed on supporting the economy. "Support as much as possible, save as much as necessary!". Despite the impossibility of predicting which health measures will be taken in the coming months, the government must "avoid cascading bankruptcies and layoffs". Above all, it will have to prevent the recovery from being split in two, with on the one hand solid sectors which have rebounded (administration and public services, finance and insurance, construction, etc.) and others unable to recover ( shops, catering, industry...). This will notably involve the integration of young people and the fight against unemployment of senior workers, who are particularly affected. It will also be a question of encouraging consumers to spend the money saved during the containment, and which companies today badly need.
