Lockdown incomes

Posted by: Paul Donovan

05 Jun 2020

Weekly Update

  • What has the lockdown done to people's incomes? If people have had a loss of income during lockdown, they are less likely to rush to spend money in the second half of this year.
  • In most major economies, the overwhelming majority of people have kept a stable income. There are six different groups to consider. Some people did not have an income before lockdown (because they chose not to work, or were unemployed). Some people became unemployed. Other people were either put on furlough, worked from home, worked normally, or were retired.
  • In Europe, people who became unemployed and people put on furlough have lost income.  In the UK, Germany and Italy, about 15% of the adult population have had lower incomes during lockdown. In France this number was around 25% (as many more French workers are on furlough).  A large majority have had income stability.
  • In the US things are more complicated. The temporary increase in unemployment benefit (and the stimulus cheques from the US government) mean that most people who are receiving benefits will have increased income during lockdown. However people still in work may have been asked to take pay cuts (although some have also received pay increases).

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