6 months into recession, an 11.5 million jobs disappeared

September’s jobs report from the Bureau of Labor Statistics (BLS) gives a status on the labor market six months into the recession caused by the coronavirus pandemic.

When the pandemic hit, government officials urged businesses across the country to shut their doors to mitigate the spread of the coronavirus.

As a result, over 22 million jobs were lost and unprecedented numbers of workers filed for unemployment insurance.

The jobs losses were sharp and deep, disproportionately hitting women, Latinx workers, and certain low wage sectors of the economy, notably leisure and hospitality.

The effects were particularly devastating for Black workers and their families who were less able to weather job losses.

With the expiration of the extra $600 unemployment insurance benefit, millions of workers across the country are facing eviction and hunger and the resulting loss in demand will undoubtedly slow the recovery.

As the economy began reopening, jobs have started to return. The BLS reports an increase of 1.4 million jobs in August.

In normal times, this would be an enormous jump, but it represents a noted slowdown from last month’s increase of 1.7 million and June’s increase of 4.8 million.

At this point, the U.S. economy is still down 11.5 million jobs from where it was in February, before the pandemic hit.

With this kind of slowing in job growth, it will take years to return to the pre-pandemic labor market. And, without the $600 boost to unemployment insurance, jobs will return even more slowly than had policymakers stepped up and continued that vital support to workers and the economy.

Overall job growth was bolstered by a temporary gain in government employment for Census workers; without it, the jobs deficit would be 11.8 million. Public sector employment is still 831,000 below its pre-pandemic level in February.

Federal policymakers need to step up and provide more fiscal relief to state and local governments so they can continue to provide necessary services and prevent unnecessary cuts to their budgets as their revenue falls in the face of the historically large shutdown in economic activity.

In fact, they could do one better and increase public-sector employment through the hiring of additional public health workers and contact tracers.

Further, the current challenges to schools require more, not less, education staff in coming months. As in the Great Recession, the pursuit of austerity will stifle a quick and full recovery.

In the private sector, job growth occurred in retail trade, profession and business services, and leisure and hospitality. However, leisure and hospitality still has 4.1 million fewer jobs than in February. Education and health services has 1.5 million fewer jobs in August than in February.

Professional and business services are 1.5 million down from February. Retail trade has 655,400 fewer jobs in August than in February. The U.S. economy is still facing a huge jobs deficit. Even in manufacturing, which saw gains of 29,000 in August, there are 720,000 fewer jobs than in the pre-pandemic economy.

Turning the household survey, there was a significantly decline in the overall unemployment rate from 10.2% down to 8.4%.

This happened for the “right” reasons—more workers getting jobs rather than an exodus from the labor force. After continuing to falter as white workers recovered faster, Black unemployment finally has started improving.

The white unemployment rate hit 7.3% in August, declining 1.9 percentage points. The Black unemployment rate fell 1.6 percentage points to 13.0% in August. The Hispanic unemployment rate fell 2.4 percentage points to 10.5% while the Asian unemployment rate fell 1.3 percentage points to 10.7%.

While the improvements are welcome, it is clear that white workers continue to have a swifter recovery.

It’s important to remember that the overall unemployment rate of 8.4% is still higher than the unemployment rate ever got in either the early 1990s or the early 2000s recessions. And, the unemployment rate is not counting all coronavirus-related job losses.

In August, there were 13.6 million workers who were officially unemployed. But there were an additional 1.1 million workers who were temporarily unemployed but who were being misclassified as “employed not a work.”

There were also 4.3 million workers who were out of work as a result of the virus but who were being counted as having dropped out of the labor force because they weren’t actively seeking work. Altogether, that is 19.0 million workers who were either officially unemployed or otherwise out of work as a result of the virus in August. If all these workers were taken into account, the unemployment rate would have been 11.5% in August.

Furthermore, August saw an increase of over half a million in permanent job losses. It is clear that the pain is nowhere near over for millions of workers and their families across the country.

On Labor Day, we heard a lot of rhetoric from policymakers about helping workers, but it is important that they take real action that will help working people in this recovery.


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