The halting of all nonessential production means that the number of unemployed will rapidly reach levels that will equal and possibly exceed those of the Great Depression of the 1930s, which peaked at 25 percent. This means large sections of the working class and middle class, and the poor are threatened with the loss of their income and the ability to buy food and essentials and cover their weekly and monthly expenses.
The situation has drastically worsened in a short period of weeks and is projected to get worse. The St. Louis Federal Reserve warns that 32.1 percent unemployment is possible by the end of June 2020 or 47 million unemployed. The Federal Reserve research concludes that 66.8 million workers in "occupations with high risk of layoff," including sales, production, food preparation and services, will be impacted.
The initial seven-week unemployment numbers have surpassed an Oxford Economics projection that 27.9 million jobs would be lost during the pandemic, including 7 to 10 million in industries beyond those ordered to close. Brookings reported that more than 24.2 million workers are employed in high-risk industries and face significant virus-related work disruptions.
According to the Labor Department, nearly 4 million Americans became newly unemployed in mid-March alone. A record 6.6 million additional unemployment claims were filed the last week of March. As of the May 14th report, the total has skyrocketed to 36.5 million Americans unemployed over the two-month period since the beginning of statewide lockdowns in response to the COVID-19 pandemic. As unemployment continues to escalate, it is pushing up the unemployment rate in the double digits to as high as 21 percent! That exceeds the 2007-2008 18-month peak 15 million unemployed during the Great Recession, and exceeds the 22.4 million new jobs created since November 2009 at the end of that recession. Further, hundreds of thousands more employed Americans have seen their hours significantly reduced. Then there are the hundreds of thousands of people who have no job at all, or too few wage hours, and must struggle to find other ways to survive.
A survey published on April 28 by the Economic Policy Institute (EPI) shows that the unemployment filings significantly underestimates the actual number of people who have lost their jobs since March 15. The EPI survey reveals that for every 10 people who have successfully applied for unemployment benefits during the pandemic, three or four more tried to apply but could not get through to make a claim. An additional two people did not try to apply at all because the process was so onerous.
With respect to unemployment, a lot of people will fall through the cracks in the short term, resulting in tens of millions of Americans potentially unable to produce and consume. To be counted among the unemployed, a worker must be looking actively for work, something many people aren't doing because of the pandemic. Once out of the labor force for four weeks the unemployed will be re-classified as out of the labor force and the unemployment rate will no longer capture those workers. Thus, the unemployment rate will drastically understate the problem.
Further, a prolonged period of stagnation and joblessness will obsolete workers' skills and experience.
Unable to produce, whether with one's labor or one's capital tools, one cannot consume. Money that is injected into the economy to boost consumption and demand, that is not backed by production and new productive capital assets, has nothing behind it but the ability of the government to tax people. Taxation will become increasingly difficult if people are not able to become productive and start earning real income again.
Unemployment is measured in terms only of people who are looking for a job, and since many people will not look for a job under quarantine -- and many businesses and organizations will not be hiring under quarantine -- the percentage of Americans who become unemployed is likely to continue to jump drastically, as the pandemic widens. People will suffer trauma not knowing whether they will be rehired when the crisis ends. And as unemployment dramatically expands, this could trigger appreciable alarm and further worsen the downward spiral throughout the economy. Further, not included in the unemployment stats are the 96 million Americans not in the workforce prior to the halting of all nonessential production. Unemployment is compounded by the fact that most Americans have no savings and live paycheck-to-paycheck.
Fear And Panic
As the crisis widens, Americans are on the edge of panic and are stocking up on groceries, medicines, diapers, toilet paper and other essentials, because we do not know for certain that our systems will take care of us. While goods and services that can be consumed at home will spike in demand, non-essential goods and services will be worst affected.
By closing businesses and organizations and making workers unemployed (their only source of earning income), people are having their electricity turned off, defaulting on their home mortgages and rents, defaulting on their credit card debt, defaulting on their car loans, defaulting on their student loan debt and experiencing other defaults. With personal and household debt at an all-time high and far too many people in debt of more than a year's wages, the impact of joblessness will be devastating for persons and lenders.
Households short of income are skimping on food. Without viable earnings, a whole lot of people will no longer have homes. In a country where a majority has little or no savings and lives from paycheck to paycheck, the pandemic is a social catastrophe even for those who are not infected by the virus.
Two other factors that exacerbates the pandemic are the lack of affordable housing and a homelessness crisis, with a half-million Americans homeless.
In a pandemic, there's a huge difference between having healthcare and not having it, between getting paid sick time off work and not, and having access to clean water and housing and lacking it. Unfortunately, these needs aren't being met for millions of people. And that failure is putting all of us at risk.
The three groups in our communities who face the greatest threat from the pandemic are the elderly, the homeless and families, particularly with school-age children, struggling to make ends meet.
Next Page 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
