Unemployment on the Rise
Have you or someone you know lost a job as a result of COVID-19? It should come as no surprise to anyone that the global pandemic has taken a devastating toll on the U.S. economy. But it’s starting to become clear exactly how big a deal this really is. New reports from the Department of Labor and the Federal Reserve Bank paint a grim picture of the economic challenges that many Americans are facing right now. Here, btw takes a closer look at what’s happening, what it means for all of us, and what we can do to help those who are struggling.
Unemployment, By the Numbers
Last week, the Department of Labor released a report showing that an additional 3 million Americans filed for unemployment the week before, bringing the updated total to about 36.5 million new claims in the eight weeks since mid-March. (This doesn’t count people who were already receiving unemployment benefits before the pandemic hit.) In fact, 22.4 percent of the entire American labor force lost their jobs in March. As of last month, the unemployment rate is at its highest level since the Great Depression.
To make matters worse, it’s low-income workers, not CEOs and wealthy executives, who are most affected: the Federal Reserve Bank revealed that nearly 40 percent of low-income workers lost their jobs in March. And out of all fifty states, the hardest hit right now is Kentucky, where 36.2 percent of the state’s entire workforce filed for unemployment benefits in March.
A Silver Lining?
While these numbers are significantly higher than economists predicted, experts say there is still a silver lining. The number of claims being made is decreasing steadily each week, after peaking the last week of March at 6.9 million new claims. Experts are hopeful that this means that the economy is starting to move in the right direction. They are also studying the number of recurring claims to get a sense of whether or not the reopening of the economy is successful in getting people to find new jobs or return to their old ones.
Can Anything Be Done?
Most of what can be done to help the unemployed is in the hands of the government. Some proposals that have been suggested by some lawmakers and experts are: widespread unemployment insurance, establishing a universal guaranteed income, rethinking trade agreements, or providing tax credits for business owners who hire more employees. The government could also consider putting people back to work directly like President Franklin Roosevelt did with his stimulus programs during the Great Depression. Landlords can help by supporting “rent freezes” or “eviction freezes,” so that people who are out of work and struggling won’t find themselves without a place to live.
But everyday people can help out, too. It may seem surprising, but economists have shown that small businesses do much more to drive job creation and stimulate the economy than large companies do. This means that whenever possible, we should try to support small businesses by buying, shopping, and eating locally.