More than 1.6 million Belgian workers were on temporary unemployment in April, more than one-quarter of the entire workforce, according to a report from the university of Leuven.
Temporary unemployment is normally only used in exceptional cases, for example where a company is unable to operate because of forces beyond its control. The measure is also usually short-term.
A recent example was the cyber-attack on Picanol, a west Flanders company that makes weaving machinery. A ransomware attack left the company unable to function, and workers were placed on temporary unemployment until the situation was resolved.
When the lockdown was imposed by the Covid-19 epidemic, the government made the measure more widespread. Anyone unable to work was made temporarily unemployed, and received a benefit equivalent to 70% of their normal monthly wage.
The researchers at the university’s Research Institute for Work and Society gathered the latest available figures from the state service for social security and the state institute for employment. Their report reveals which sectors of the economy were hardest hit.
Of the 1,163,000 workers who were on temporary unemployment in April, 47% came from just five sectors:
Security, cleaning and other support activities (104,431); construction (102,430); retail excluding motor vehicles (93,114); wholesale and business-to-business trading excluding motor vehicles (72,143) and the hospitality sector (68,338).
An analysis of the share of temporary unemployed people compared to total employment provides a different picture, the report says.
“Then a lot of other sectors emerge, with car assembly and aviation at the top. With more than 70% of their total number of employees on temporary unemployment, these sectors suffered an even greater impact. Some smaller industrial sectors also score very high in terms of the use of temporary unemployment.”
The industries with the highest percentage of their workers temporarily unemployed were: vehicle assembly (72.6%); air transport (70.9%); textiles, leather and clothing (69%); travel agents and tour organisers (67.7%) and sale, maintenance and repairs of motor vehicles (67.5%).
“Large sectors such as catering and trade are characterised by great dynamism, even in good economic times,” commented Professor Ludo Struyven, the report’s lead author.
“There is a large inflow and outflow of employees and a higher number of start-ups and stoppages. These sectors immediately felt a major impact from the lockdown, but have the potential to recover quickly. If domestic demand and consumer confidence are maintained, these sectors will revive.”
Less likely to recover quickly, however, are the young people affected.
“Most of the new hires are young people. However, it is often those new workers who have to leave when a company gets into difficulties,” said Prof Struyven.
“If the number of vacancies also goes down, young people will also have less chance of a new job. They suffer a double blow from this crisis.”