Increase of unemployment rates during current crisis underestimated the labour market damage. Unemployment rate definition lefts outside many negative labour market developments that have materialized to a large extent during COVID-19 crisis: an increase in number of persons working less than desired, an increase in number of persons that could not search for work or that were not available for work due to containment measures.
Labour market slack indicator is an extension to the unemployment rate indicator and it takes into account the previous categories of persons suffering due to the crisis.
The labour market slack indicator still has a shortfall: it excludes the furloughed employees receiving financial assistance from government. Many of these employees are at risks to lose their jobs at some point in the future, especially if the crisis will prolong too much.
