(left-hand scale: annual percentage changes; right-hand scale: percentages)
Sources: Eurostat and ECB calculations.
Notes: The latest observation is for the third quarter of 2020. The right-hand scale is inverted.
Wage agreements concluded before the outbreak of the pandemic still play a dominant role in the latest developments in the indicator of negotiated wage rates. Quarter-on-quarter changes in the indicator show that negotiated wage dynamics in 2020 have so far been very much in line with the profile observed on average since 1999 (see Chart B). Changes to negotiated wages tend to occur mainly in the first quarter of each year. This holds true both for average changes in the indicator of negotiated wage rates and for average absolute changes. The fact that average absolute changes in the indicator of negotiated wages, which reflect the average absolute amount of increases as well as decreases, are also concentrated in the first quarter shows that changes to negotiated wages
The European Central Bank (ECB) is the central bank of the 19 European Union countries which have adopted the euro. Our main task is to maintain price stability in the euro area and so preserve the purchasing power of the single currency.
The impact of the COVID-19 pandemic on the euro area labour market
The impact of the COVID-19 pandemic on the euro area labour market
Prepared by Robert Anderton, Vasco Botelho, Agostino Consolo, António Dias da Silva, Claudia Foroni, Matthias Mohr and Lara Vivian
1 Introduction
The euro area labour market has been severely hit by the coronavirus (COVID-19) pandemic and associated containment measures. Employment and total hours worked declined at the sharpest rates on record. Unemployment increased more slowly and to a lesser extent, reflecting the high take-up rate of job retention schemes and transitions into inactivity. The labour market adjustment occurred primarily via a strong decline in average hours worked. In addition, the labour force declined by about 5 million in the first half of 2020, which is half a million more than its increase between mid-2013 and the fourth quarter of 2019.