In April of this year, at the peak of the pandemic, the unemployment rates hit a historic 14.7%, which was a post WWII high! Since then, the unemployment rate has decreased but that doesn't paint the full picture. In the turn of the year, there were 965,000 claims filed for unemployment insurance. After the new jobs report came out, we learned that 140,000 jobs were lost in the month of December. But economists agree that 2021 will look better.
Disparity in the Details
If we dig deeper into the details, the pandemic also shined a light on the current socio-economic issues that we've already faced. On THC, we've talked a lot about income and wealth inequality. if we look into the unemployment numbers specifically, we see that the most recent number is 6.7% but what that number doesn't tell you is WHO is losing their jobs.
The lowest paid workers are experiencing this unemployment much harder than what you probably think. The servers, waiters, fast-food workers, are losing their jobs at a faster rate. The lowest paid workers, mostly in the leisure and hospitality industry, are having a whopping 20% unemployment. Unsurprisingly, most of the people who have lost their jobs are either African-American or Latino. The black unemployment rate is 9.9%, hispanic rate is 9.3%, and for whites it lies at 6%. Further, women as a group accounted for all the job losses, losing 156,000 jobs, while men as a group gained 16,000. Women are disproportionately represented among the vulnerable workforce as well, accounting for 51% of these workers nationally, versus 46% in industries not at immediate risk.
But there are active efforts on a government level to address these issues.
Federal Reserve Response
Let's go back to the start of the pandemic. In anticipation for the recession to come, the Federal Reserve had taken actions to reduce interest rates (that were already historically low) to near-zero rates. They also went on a bond-buying spree to ensure liquidity in the markets. Some people think this may have averted a greater crisis, due to how the fed reacted in 2008. Another interesting monetary policy change is the choice of the federal reserve to keep rates low until recovery is shared across social classes.
The house also passed the CARES act which covers a few critical areas: Employee Retention Credit, which incentivizes businesses to keep their employees; Payroll Tax Deferral and Payroll Support, which ensures employers have some breathing room from the adjustments they've had to make in COVID; and a Loan program, to help people get through these tough times. Read more about it here.
We've lost around 3.4 million jobs since the pandemic started and there are more jobs at risk until we control COVID-19. According to a recent survey done by WSJ, economists think that the roll-out of vaccine will determine the rate of recovery of any nation. If you think about it, once people are vaccinated, businesses will be more comfortable having a more open economy.
As we look at these figures and learn about who is really suffering during these challenging times, keep in mind that you know who is being greatly affected by this crisis. We hope that this podcast can help you make informed decisions on how to help where it counts!