Even when the economy was on track and experts were seeing positive growth for the United States, over 100 millions adults in the country were out of a job. At the time, the mainstream media was still pushing the narrative that the unemployment rate was the lowest it had been in decades. In fact, during the latter part of 2019, the White House reported that the US was in the middle of “the longest economic recovery in its history,” with unemployment dipping to a 50-year low of 3.5 percent in September.
That all changed when the pandemic hit. Since the start of the health crisis, over 47 million Americans have filed for unemployment benefits. For 14 weeks in a row, the number of new claims has topped one million.
In this video, we’re going to give you the real data on out of work Americans and help you understand just how deep the United States’ wounds are.
To understand how many people the pandemic has really affected in terms of job security, the employment-population ratio is a far better measure than the much more commonly used unemployment rate. Wikipedia defines the employment-population ratio as “a statistical ratio that measures the proportion of the country’s working age population that is employed.”
Over the past few months, as the economy faced a sharp downturn, this ratio also changed dramatically. According to CNBC, this May saw an employment-population ratio of 52.8 percent. That means that 47.2 percent–nearly half of all working age Americans–were unemployed at the time. As recently as January of this year, that figure was sitting at a relative high of 61.2 percent, near the record high of 64.7 that was reached in 2000.
According to Torsten Slok, Deutsche Bank’s chief economist, a staggering 30 million jobs would need to be added to the US labor market in order for us to return to that peak.
Even though May saw some recovery, with 2.5 million jobs added in the largest single month increase on record, experts anticipate that such good news will not continue. Economists surveyed by Dow Jones predict nonfarm payroll to increase by 3.15 million in June, which would bring the unemployment rate down an additional 0.9 percent to 12.4 percent.
However, new filings for unemployment benefits continue to come in at higher numbers than experts have been anticipating. Furthermore, there are signs of a further slowdown as reopenings fail to lead to renewed economic activity as hoped and instead have caused dangerous waves of new cases. As a result, many states have reinstated at least partial lockdowns or slowed their processes of reopening stores, restaurants, and other businesses.
This means workers who were laid off temporarily will remain out of work and some job losses may become permanent as the economic stress of lockdowns continues to compound for already struggling businesses. Clearly, recovery will not be as straightforward as it first seemed.
Global trade was already trending downwards as early as 2018, with geopolitical tensions on the rise and tariffs or threats of tariffs disturbing worldwide chains of supply and demand. In April, US exports plunged 30 percent from the same time last year. Ongoing agitation in US-China relations caused American imports from the world’s second largest economy to drop a staggering 24 percent in the first four months of 2020 when compared to the same period of 2019, marking a huge decrease in international cooperation between the two superpowers.
The Commerce Department recently released its advance estimates for May, which indicated even bleaker outlooks for both exports and imports. According to their data, exports dropped 5.7 percent from March to April and collapsed by 35 percent year-over-year. The total value of goods exported by the US declined sharply to just $90.1 billion, the lowest amount seen since August 2009, and down a whopping 37 percent from the peak in 2018.
One thing is growing exceedingly obvious. The next great depression has arrived, and the speedy V-shaped recovery that so many optimists were holding out for is nowhere to be found.
The best we can all do in the interim is to prepare for the difficult times ahead, as we will begin to see things happen that we have never seen before.
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