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Last week was another bloodbath for the U.S. labor market: New figures released Thursday by the Labor Department revealed that another 5.25 million Americans filed for unemployment benefits in the week ending April 14.
That brings total claims over the four weeks ended April 11 to nearly 22 million workers, erasing the entirety of labor market gains since the 2008 financial crisis, a stunning sign of the colossal economic damage inflicted by the virus outbreak. Before the pandemic, the largest number of Americans to seek jobless aid in a four-week stretch was 2.7 million in the fall of 1982.
With a labor force that totals about 162 million people, that means the unemployment rate is close to 13 percent, meaning that about 1 in 7 Americans has lost their job.
But millions more may be impacted by the massive job losses caused by the coronavirus pandemic, which has shut down broad swaths of the economy.
US ECONOMIC OUTPUT PLUNGES BY 29% AS VIRUS FORCES WIDESPREAD SHUTDOWNS
In 2019, the average American household consisted of 2.52 people, according to the U.S. Census Bureau. Extrapolating that and assuming that each of the 22 million individuals who lost their jobs over the past four weeks lives with 2.52 people, unemployment numbers could have a direct effect on up to 57 million Americans.
According to a paper published by the Urban Institute in 2012 analyzing the impact of unemployment during the 2008 financial crisis on families, poverty nearly tripled among families, increasing from 12.0 to 35.3 percent, where parents were unemployed for more than six months.
“Despite the lack of clear-cut solutions to reduce or prevent long-term joblessness, the devastating effects of long-term unemployment on families demand policy innovation in addition to a strong safety net,” the paper said.
In 2018, of the nation’s 82.5 million families, about 80.8 percent had at least one employed member, according to Labor Department data. That would mean there are at least 66 million families with an employed member. Assuming 13 percent of families lost their jobs over the past four weeks, that would mean about 8.6 million families in the U.S. have lost at least one paycheck.
Still, there are more expansive safety nets in place now: At the end of March, President Trump signed the $2.2 trillion CARES Act into law, which widened unemployment benefits by $600 per week and included cash checks of up to $1,200 for individuals who earn less than $99,000.
Unemployment did not begin surging in the U.S. until the latter half of March, when a majority of states imposed strict stay-at-home mandates and shuttered businesses deemed nonessential.
HERE’S HOW EXPANDED UNEMPLOYMENT BENEFITS WORK
The first wave of layoffs largely hit workers at restaurants, malls, hotels and other places that closed their doors to mitigate the spread of the virus. But as the shutdown has pervaded, higher-skilled work, which often can be done remotely, has also become at-risk.
“In the most affected states and services sectors we are literally running out of jobs to terminate,” said Dan Alpert, co-creator of the U.S. Private Sector Job Quality Index. “Outside of those front-line services sectors, we are looking at the crisis digging deeper into the goods producing sectors. Next week, if funds are still not moving to employers, will see a spike in claims by white-collar service employees.”
A new analysis by the National Bureau of Economic Research found a strong correlation between the ability to work remotely and high-wage positions. Jobs in finance, corporate management and professional and scientific services could be done remotely, while very few jobs in agriculture, hotels and restaurants, or retail could be.
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