Unemployment Soars to 14.7% as America Loses 20.5 Million More Jobs


The U.S. economy lost 20.5 million jobs in April as the devastation from COVID-19 hit new highs Friday in the monthly jobs report from the U.S. Bureau of Labor and Statistics.

The report also shows that
the nation’s unemployment rate soared to highs not seen since the World War II
era, climbing from 4.4% to 14.7%.

Given recent
unemployment filings, my colleagues at The Heritage Foundation estimate that
the unemployment rate actually is at least 18% and quickly approaching
20%.  

Unemployment rates for
major worker groups include 13% for adult men, 15.5% for adult women, 31.9% for
teenagers, 14.2% for whites, 16.7% for African Americans, 14.5% for Asians, and
18.9% for Hispanics.

The jobless rates for
all of these groups, with the exception of African Americans, register record
highs.

In addition, the U-6
unemployment rate, which measures both the unemployed who are looking actively for
a job and those who are unemployed but not actively seeking work, showed a
massive jump from 8.7% to 22.8%. 

The labor force
participation rate decreased by 2.5 percentage points over the month to 60.2%,
the lowest rate in 47 years.

So where did the job
losses happen?  

The largest decline happened in the leisure and hospitality category, which shed a whopping 7.7 million jobs. A total of 5.5 million of those jobs are in the food service and restaurant category. 

Other notable losses
include:

Education and health services: 2.5 million (243,000 of these jobs were in offices of physicians)

Professional and business services: -2.1 million jobs

Retail trade: -2.1 million jobs

Manufacturing: -1.3 million jobs

Construction: -975,000 jobs

Transportation and warehousing: -584,000

In April, average hourly
earnings increased by $1.34 to $30.01, representing a 7.9% increase from this
point last year. The jump in wages is likely because job cuts hit low-wage
workers harder, as higher earners typically are able to work from
home.  

One potential bit of
good news is that out of the 20.5 million jobs lost in April, 18.1 million
of them (88%) came from workers who were temporarily laid off.

So the question remains:
How long will these layoffs remain temporary before moving to permanent
layoffs?  The answer depends on how long we continue to keep large
portions of the economy closed. 

According to a chilling
new survey conducted by the Society for
Human Resource Management, nearly
half of all small-business owners project they can keep their business going
for six months before having to close their doors permanently. 

If we want to stop these
projections from becoming reality, and want to keep temporary layoffs from
becoming permanent, we need a locally driven, data-informed reopening of
society so we can begin getting Americans safely back to work.

To do this, we need to be sure that policymakers create an
atmosphere that encourages work, not incentivizes unemployment.  

We need to fix the portion of the new CARES Act that gives
unemployed Americans an additional $600 per week in unemployment insurance
benefits, which in many cases pays them more to stay at home than going back to
work would.   

To help guide policymakers around the nation on reopening, The
Heritage Foundation assembled the National Coronavirus Recovery Commission. 
The goal:  Save lives, but also livelihoods. The commission so far
has put forward 179 recommendations that strike a prudent balance
between the two.

As we begin to see states move closer to reopening, it is
important we provide business owners with policies and procedures that help
welcome back their employees. 

To see these high unemployment numbers fall, we must immediately
start the balancing act between lives and livelihoods.   





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