The Bureau of Labor Statistics (BLS) report for April showed shattered records and forced lawmakers to face some hard questions.
According to the report, the unemployment rate has skyrocketed to 14.7 percent and touched almost every sector of the labor market. Lawmakers must now decide if they should continue pumping the economy with trillions of dollars in stimulus money or hope that the gradual reopening of states across the country will help jump-start an economic recovery.
The numbers are truly record-breaking, with the 20.5 million jobs lost in April alone easily surpassing the 8.7 million of the last recession, when unemployment peaked at 10 percent in October 2009. The acute decline is the steepest and most sudden ever seen since the government began tracking employment levels in 1939. April’s losses follow considerable job cuts in March, when employers slashed 870,000 jobs. These numbers are even more disheartening when held up against the state of the economy before the pandemic reached American shores: February’s unemployment rate was just 3.5 percent, the lowest it’s been anytime during the last half-century.
This setback is particularly discouraging for those who weathered the Great Recession of 2008. In the decade following the recession, U.S. employers added 22.8 million jobs to the economy. Now, it appears as if close to 10 years of job growth was wiped out in just two months.
By the government’s definition, the “unemployed,” generally includes individuals who are actively seeking work and does not reflect the millions of Americans who have had their hours cut along with losing their paychecks.
While the numbers are bleak, some comfort can be taken in knowing this was a necessary sacrifice for the greater good. When stay-at-home orders were issued across the nation, beginning in late March, thousands of businesses in multiple sectors were forced to shut their doors. Many of them were forced to lay off workers as well. Experts estimate that hundreds of thousands of lives may have been saved by the lockdowns.
Unfortunately, though, the job losses were a direct consequence of these closures. The job report shows a loss of 7.7 million jobs in the leisure and hospitality sector, another 2.1 million losses in retail and 1.2 million vanished jobs among health care workers employed in outpatient services like physicians’ and dentists’ offices. Food and beverage stores, considered essential during the lockdowns, have lost a collective 42,000 jobs.
There is some good news despite the doom and gloom: A full 18 million Americans counted by the BLS as “unemployed,” are on “temporary layoff” and expect to be rehired within the next six months.
On the flip side, though, the count did not include jobless workers who were not actively seeking work in April. These individuals are categorized as having dropped out of the workforce instead of being part of the unemployed.
Financial experts are hopeful that many people will find work again as the economy gradually opens up, but they caution that it will likely take years before the labor market makes a full recovery. This is especially true for the leisure and recreation sector, as many Americans likely won’t be comfortable sitting in a packed restaurant or a crowded theater until a vaccine or approved drug is available for COVID-19.
For now, Americans should support local businesses as much as they are realistically able and have a mindset of knowing better days are ahead.
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