Europe recovers from double-dip recession but lags the United States.
Europe’s economy exited a painful double-dip recession in the second quarter, rebounding faster than expected from the ravages of the pandemic as consumers spent pent-up savings and restaurants, factories and other businesses sprang to life after pandemic control restrictions eased.
Gross domestic product, the broadest measure of economic output, grew 2 percent in the second quarter of the year in the eurozone, up nearly 14 percent from a year ago and reversing a 0.3 percent contraction in the first three months of the year, Eurostat, Europe’s statistics agency, reported on Friday.
But the eurozone’s recovery, while striking for its speed, is far from complete: It continues to lag the United States, which reported data Thursday showing it had returned to its prepandemic level of output in the second quarter. Europe is not expected to hit that marker before the end of the year.
The European Union recently increased its forecast for growth this year to 4.8 percent, but the United States economy is expected to grow by 6.9 percent in 2021, according to the Organization for Economic Cooperation and Development.
Nonetheless, Europe’s recovery has gained speed as service and manufacturing sentiment and activity jumped among the 19 nations that share the euro currency, after governments worked to prevent new lockdowns in spring. Authorities also applied pressure on citizens to ramp up vaccinations that are seen as the key to sustaining a recovery — and winding down billions in pandemic support for workers and businesses.
The vaccination push has reaped benefits: This week the European Union pulled ahead of the United States in total vaccinations, adjusted for population, a turnaround from the spring.
Europe’s four biggest economies recorded expansions over the April-to-June quarter, with the most robust growth in southern Europe, in countries that suffered the brunt of Covid deaths last year.
Italy grew 2.7 percent and Spain grew 2.8 percent from the first quarter, while Portugal and Austria’s economies surged more than 4 percent, thanks to a rebound in tourism. But growth was weaker than expected in Germany, Europe’s largest economy, which grew 1.5 percent from the first quarter, perhaps reflecting supply chain problems as a shortage of electronic chips has slowed manufacturing in its massive auto industry.
The French economy, however, struggled to climb out of a recession, growing 0.9 percent from April to June following zero growth in the first three months. President Emmanuel Macron has been trying to coerce the French into getting vaccinated in a bid to cement a recovery.
Counting the 27 European Union countries, Eurostat said economic output rose 1.9 percent last quarter.
Europe’s revival has helped stoke a mild return of inflation, which rose to 2.2 percent in July following a 1.9 percent rate the previous month. The European Central Bank, which until recently sought to keep inflation below or close to 2 percent, has a new strategy that will tolerate inflation above its target if the price increases are considered transitory.
Keeping economies open is seen as crucial to sustaining Europe’s rebound. Since countries ended lockdowns earlier this year, order books for industrial goods have filled rapidly — so much that some European manufacturers have begun to express worry about keeping up with demand. And unemployment continued to fall, declining to 7.7 percent in euro area in July from 8 percent in June, Eurostat reported.
“Never before has sentiment been so positive among eurozone businesses and consumers,” Bert Colijn, senior eurozone economist at ING Bank, said in a note to clients. “This indicates that the economic rebound is in full swing.”
Since the pandemic arrived in early 2020, Europe’s economy has been rocked by two recessions — a double-dip recession. In the second quarter of 2020 alone, eurozone economic output shrank 12.1 percent.
But in a reflection of the return of economic fervor, many of Europe’s biggest companies reported bumper earnings this week, from a surge in aircraft delivery at Airbus, the world’s largest plane maker, to a consumer splurge in the purchases of expensive scarves and handbags at the luxury retailer Hermes. But the Delta variant, which has caused a jump in coronavirus infections across Europe, has recently caused consumer confidence to tick back down, increasing uncertainty among service sector businesses.
Vaccinations, though, are weakening the link between cases and hospitalizations, meaning the economic consequences of a new wave of coronavirus cases will be far milder than those of previous waves, Rory Fennessy, an economist at Oxford Economics, said in a note.
Nonetheless, depending on how the pandemic evolves, “the potential ramifications of the Delta variant are the main downside risk to the outlook,” he said.
In late 2018, Chelsey Glasson, a researcher at Google who had worked there for four years, moved to a new team. She was pregnant at the time and said she immediately felt she was being discriminated against. Her new boss suggested that her forthcoming maternity leave might “rock the boat,” and she was effectively stripped of her management responsibilities.
When she filed a complaint with human resources, she was offered 10 free sessions with a mental health counselor who was contracted by Google and available on campus.
At the time, she thought, “What a great resource, of course I’m going to take advantage of this.”
More than a year later, when Ms. Glasson filed a pregnancy discrimination lawsuit against Google, her counselor told Ms. Glasson that she was “really nervous and uncomfortable” seeing her after Google had asked for access to records of their sessions, Alisha Haridasani Gupta and Ruchika Tulshyan report for The New York Times. “She was concerned that affiliating with me would compromise her contract with Google,” Ms. Glasson said.
“That was an incredibly low, deflating moment in my experience,” she said. She added that Google had already been using those subpoenaed records to suggest that she was distressed for personal reasons, not because of a potentially toxic work environment or discrimination.
In interviews with The Times, six former and current Google employees recalled that when they spoke up against workplace misconduct, they, too, were offered free short-term counseling — called the Employee Assistance Program (E.A.P.) — or medical leave.
A Google executive, who asked not to be identified because he is not permitted to speak to reporters, said that when employees report difficulties at work with a colleague, Google’s human resources officers are instructed to remind those employees that the company offers up to 20 therapy sessions a year. (Google recently expanded the benefit to 25 sessions.)
Of course, offering counseling isn’t necessarily a bad thing. Nor is this kind of counseling unique to Google.
But counseling can become problematic when it’s used as a stopgap or a quick fix to resolve tense workplace situations that might not legally be considered harassment or bullying but that are nonetheless unacceptable, said Erica Scott, a human resources expert.
Tolerating bad managers while directing employees to a counseling program is a “shocking” way to “shield the employer from accountability,” she said. “These are employee matters that are the employer’s obligation to deal with, not a third party.”
Economists at the University of California, Berkeley, and the University of Chicago this week unveiled a vast discrimination audit of some of the largest U.S. companies. Starting in late 2019, they sent 83,000 fake job applications for entry-level positions at 108 companies — most of them in the top 100 of the Fortune 500 list, and some of their subsidiaries.
Their insights can provide valuable evidence about violations of Black workers’ civil rights, Eduardo Porter reports for The New York Times.
The researchers — Patrick Kline and Christopher Walters of Berkeley and Evan K. Rose of Chicago — are not ready to reveal the names of companies on their list. But they plan to, once they expose the data to more statistical tests.
In the study, applicants’ characteristics — like age, sexual orientation, or work and school experience — varied at random. Names, however, were chosen purposefully to ensure applications came in pairs: one with a more distinctive white name — Jake or Molly, say — and the other with a similar background but a more distinctive Black name, like DeShawn or Imani.
On average, applications from candidates with a “Black name” get fewer callbacks than similar applications bearing a “white name.”
This aligns with a paper published by two economists from the University of Chicago: Respondents to help-wanted ads in Boston and Chicago had much better luck if their name was Emily or Greg than if it was Lakisha or Jamal.
This experimental approach with paired applications, some economists argue, offers a closer representation of racial discrimination in the work force than studies that seek to relate employment and wage gaps to other characteristics — such as educational attainment and skill — and treat discrimination as a residual, or what’s left after other differences are accounted for.
The Berkeley and Chicago researchers found that discrimination isn’t uniform across the corporate landscape. Some companies discriminate little, responding similarly to applications by Molly and Latifa. Others show a measurable bias.
All told, for every 1,000 applications received, the researchers found, white candidates got about 250 responses, compared with about 230 for Black candidates. But among one-fifth of companies, the average gap grew to 50 callbacks. Even allowing that some patterns of discrimination could be random, rather than the result of racism, they concluded that 23 companies from their selection were “very likely to be engaged in systemic discrimination against Black applicants.”
Uber told employees on Thursday that it would require them to be vaccinated, and it postponed a mandate to return to the office, joining a group of tech companies that have delayed reopening and stepped up vaccine requirements in response to the spread of the highly contagious Delta variant of the coronavirus.
On Wednesday, Google postponed its return-to-office plans until October and said employees in its U.S. offices would be required to be vaccinated. Lyft, Uber’s largest U.S. competitor, said it would not require employees to return to the office until February. Twitter shut down its San Francisco and New York offices, and put an indefinite halt to its reopening plans. Last week, Apple postponed its reopening until October.
The changes come as coronavirus cases have surged in the United States. Cases in the country increased 146 percent in the past two weeks, according to a New York Times tally.
Uber will also require employees to be vaccinated in order to work from the office. The mandate will begin with employees in the United States, and the company will assess its requirements for employees in other countries based on vaccine availability, Uber’s chief executive, Dara Khosrowshahi, wrote Thursday in an email to staff seen by The New York Times. Unvaccinated employees will be required to work from home.
Uber had already opened some offices for employees who wanted to return voluntarily, and a spokesman said that employees could continue to come into Uber’s offices if they are vaccinated and wear masks. But the company said it would not require employees to return until Oct. 25, a delay from its initial September return date.
“It’s important to say that this date is a global target, and local circumstances will continue to dictate when it makes sense to bring employees back in a given city,” Mr. Khosrowshahi said. “Rising Covid cases in our communities are a real reminder that we still need to be cautious, look at the data, and listen to experts as we return to offices. Every day, teams across the company are closely monitoring the rapidly changing global situation.”
Uber’s return date could be pushed back further if cases continue to surge, Mr. Khosrowshahi wrote.
Uber has not said whether it will require its drivers or riders to be vaccinated. It does require them to wear masks.
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