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Women, young people and low earners are getting hurt most by jobs crisis

The jobs crisis created by the pandemic will last...

Posted: Jul 7, 2020 6:43 AM

The jobs crisis created by the pandemic will last years.

That's according to a new report from the Organization for Economic Cooperation and Development, which said Tuesday that unemployment is far worse than what followed the 2008 financial crisis and will persist at elevated levels at least until 2022.

The Paris-based agency encouraged countries to extend unemployment benefits and other relief measures as necessary, especially given that low-wage workers, young people and women are "bearing the brunt of the crisis."

"Despite the massive measures taken around the globe, uncertainty about future labor market developments is large, as the risk of new outbreaks is high," said Stefano Scarpetta, the OECD's director for employment, labor and social affairs. "Much of what will happen depends on the evolution of the pandemic."

Top-earning workers were 50% more likely to work from home than low earners during lockdown, the OECD said, while women, who are more likely to be employed in struggling sectors, have been hit harder than men.

In the most optimistic scenario, where the virus continues to recede and remains under control, the agency predicts that unemployment will hit 9.4% on average in OECD countries at the end of 2020 — the worst reading since the Great Depression — before falling to 7.7% at the end of 2021. In late 2019, before Covid-19 hit, the unemployment rate for OECD countries was 5.3%.

The outlook appears even worse in the event of a second wave of infections late this year. The OECD thinks unemployment would then rise to 12.6% before easing to 8.9% in 2021.

Why it matters: The warning comes as governments debate how to extend or amend costly relief to the jobless and struggling firms, which has so far been crucial in protecting some positions.

The Trump administration on Monday released data on roughly 4.8 million small businesses that have tapped more than $520 billion in loans through its Paycheck Protection Program — a central pillar of the $2 trillion emergency economic relief efforts deployed in March.

The program was so critical at its inception that a first round of funding dried up in less than two weeks. But interest has waned recently as changing rules and borrowers' inability to come back for a second loan has limited applications.

Europe's response: The OECD noted that part-time work programs, which encourage employers to keep workers on payroll even if they're not putting in full hours, have been hugely successful in limiting unemployment in countries like Germany, assisting an estimated 60 million people. But the situation remains in flux.

On Tuesday, the European Commission downgraded its economic outlook for the 19 countries that use the euro, predicting an 8.7% contraction in 2020 and 6.1% growth in 2021. That's a big change from the previous forecast, which had the euro area economy shrinking 7.7% this year. It had also penciled in more robust growth in 2021.

Watch this space: The OECD said that almost half of all jobs "require frequent interactions," putting workers at risk of infection as economies reopen. The agency said this means governments and companies must prioritize workplace safety and guarantee "extensive" paid sick leave to keep a lid on contagion in the months ahead.

TikTok is leaving Hong Kong

TikTok says it will exit Hong Kong, following other big tech firms that have expressed wariness about operating in the financial hub after China imposed a controversial national security law there, my CNN Business colleague Sherisse Pham reports.

"In light of recent events, we've decided to stop operations of the TikTok app in Hong Kong," a TikTok spokesperson confirmed to CNN Business.

It is unclear when TikTok — which is owned by Beijing-based startup ByteDance — will exit Hong Kong, and what that will mean for the app's users in the city.

Big picture: TikTok's announcement comes as Facebook, Twitter, Google and Zoom said they would stop processing Hong Kong government requests for user data while they carry out an assessment of the new law.

Imposed last week by Beijing, the law criminalizes secession, subversion, terrorism and collusion with foreign powers. It marks a sweeping change that critics say is an attack on freedoms of speech and the press that have long existed in Hong Kong, but are prohibited in mainland China.

On the radar: As tech companies scramble to figure out their next moves, TikTok is poised to become a major source of tension between Washington and Beijing.

US Secretary of State Mike Pompeo warned Monday night that the United States is "looking at" banning TikTok and other Chinese social media apps.

People should only download TikTok "if you want your private information in the hands of the Chinese Communist Party," Pompeo said in an interview on Fox News.

Palantir files for highly-anticipated IPO

Palantir Technologies, the secretive Silicon Valley data company, is about to become a little more transparent, my CNN Business colleague Charles Riley reports.

What's happening: Palantir has filed paperwork with the US Securities and Exchange Commission to issue shares in an initial public offering.

The company said in a brief statement on Monday that it had started a confidential process to list its shares after the SEC completes a review.

Palantir did not disclose any financial information, or further details about its plans for the listing. But the move tees up a highly anticipated IPO and presages the release of more information about a closely-watched company, long the subject of speculation among tech investors.

What we know: Founded more than 15 years ago by tech heavyweights including famed investor Peter Thiel and Alex Karp, its CEO, Palantir has worked with US government agencies such as the CIA and FBI, earning the data crunching firm a shadowy reputation and a reported valuation of roughly $20 billion.

Yet relatively little is known about the company's operations. Palantir touts its ability to manage and secure data at a massive scale, but says little about which corporations or governments purchase its services.

More transparency: Going public will eventually require Palantir to reveal additional information about its business. But its chosen route to an IPO will keep a wrap on any blockbuster details for a while longer. The confidential IPO filing process lets a company privately file its registration statement, known as an S-1, with the SEC for review.

This allows it to keep sensitive information out of the hands of competitors, customers and investors until it is closer to being ready to list its shares.

Up next

US job openings for May post at 10 a.m. ET, and Levi Strauss reports earnings after US markets close.

Coming tomorrow: UK Chancellor Rishi Sunak unveils new measures to prop up the British economy. The OECD has forecast that the United Kingdom will take the largest hit among major economies this year as a result of the coronavirus pandemic.

Oregon Coronavirus Cases

Data is updated nightly.

Cases: 348766

Reported Deaths: 4161
CountyCasesDeaths
Multnomah54797689
Washington37988313
Marion36055444
Clackamas29094304
Lane26966298
Jackson22632300
Deschutes19577123
Umatilla14241144
Linn12380120
Douglas11795240
Josephine9233195
Yamhill8517110
Klamath7709110
Polk715380
Malheur551574
Benton529130
Coos489691
Columbia371343
Jefferson361450
Union313146
Lincoln310638
Wasco281540
Crook274745
Clatsop239529
Baker198028
Tillamook193328
Hood River188337
Morrow181623
Curry178122
Harney108424
Grant97612
Lake89011
Wallowa67012
Gilliam1484
Sherman1463
Wheeler991
Unassigned00

California Coronavirus Cases

Data is updated nightly.

Cases: 4810682

Reported Deaths: 70604
CountyCasesDeaths
Los Angeles147569426398
Riverside3693444990
San Diego3641044163
San Bernardino3563155566
Orange3227415518
Sacramento1576212279
Santa Clara1445181890
Kern1441461605
Fresno1441232051
Alameda1198871374
San Joaquin1018071708
Ventura1005241164
Contra Costa99234982
Stanislaus851571315
Tulare78945951
San Francisco54031645
San Mateo53828622
Monterey50696582
Solano45761334
Santa Barbara44836521
Merced41781577
Sonoma40711402
Placer38902415
Imperial35642764
Kings32369314
San Luis Obispo29653329
Madera23518281
Butte23364260
Shasta23360334
Santa Cruz20861218
Yolo20147247
Marin17581243
El Dorado16960149
Sutter13775169
Napa12808100
Yuba994282
Tehama9298104
Humboldt9102108
Nevada903990
Mendocino752786
Lassen746346
San Benito737372
Tuolumne673993
Lake6506104
Amador537264
Siskiyou442742
Glenn430330
Calaveras381780
Del Norte356141
Colusa301718
Inyo196739
Mono16445
Plumas15756
Mariposa127315
Trinity86011
Modoc6698
Unassigned1860
Sierra1760
Alpine1020
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