The COVID-19 pandemic and rising unemployment have become inexorably linked. Private employers have been forced to pay off millions of employers in response to the novel coronavirus outbreak.
In April alone, private employers laid off 20.236 million workers, a record number that indicates the historic downfall of the U.S labor market since March.
Unemployment Surges to Neary 15% in April
The US Bureau of Labor Statistics reported a 14.7% unemployment rate in April, a staggering statistic that’s unheard of outside of the Great Depression. Layoffs occurred across small, medium, and large enterprises alike, though the leisure and hospitality industry was hit hardest, accounting for more than 40% of private sector job losses.
To make matters worse, the ADP noted that April’s jobless report “does not reflect the full impact of COVID-19 on the overall unemployment situation.”
The graphs and charts depicting job loss in response to the coronavirus are startling and unbelievable. A graph showing total unemployment in the U.S, for example, climbs steadily between 2010 and 2020, from 110 million to 130 million. As soon as the graph reaches March 2020, the line plummets back in a straight downward line, reaching the lowest levels witnessed during the 2009 Recession.
Many states are slowly reopening, providing a faint light at the end of the tunnel, but despite these measures the U.S still recorded 3 million new unemployment claims in the first full week of May. That comes to a total of 36 million people filing first-time unemployment claims since mid-March. Put another way, that’s equivalent to nearly one out of every five workers losing their job in a single month.
As explained by Chris Rupkey, chief economist at MUFG in New York, “One thing for sure is that this pandemic health crisis has produced depression-magnitude job losses which means this recovery is going to take longer than many are thinking.”
Will Another Coronavirus Relief Package Address Unemployment?
On Friday, May 15, the House of Representatives passed a bill known as the HEROES Act. According to a fact sheet from the House Appropriations Committee, the HEROES Act would give American families and workers a wide range of benefits, including a second direct stimulus payment.
The HEROES Act isn’t yet official since the bill still needs to make its way through the Senate. However, if the Senate does vote to approve the HEROES Act without any significant changes, unemployment benefits would receive a bg boost. The bill seeks to extend the enhanced unemployment benefit of $600 per week, on top of normal unemployment payouts, until January 2021.