Fed chairman says 40% of Americans earning less than $40,000 a year were laid off in March – By Meteor Blades (Daily Kos) / May 13 2020
Economic analysts are forecasting that on Thursday we’ll see that another 2.7 million Americans filed new claims for unemployment insurance last week. If they’re right, it would mean 36.3 million Americans have filed for unemployment benefits in the nine weeks ending May 9. Even if those millions were the only Americans to have lost jobs as a consequence of the economic response to the coronavirus pandemic, it would put the unemployment rate at 22%. Although reliable job statistics weren’t gathered until 1939, the Bureau of Labor Statistics calculated decades after the fact that the worst unemployment of the Great Depression hit 24.9% in 1933. But those tens of millions of filers aren’t the only Americans out of work. Millions more have been laid off who aren’t eligible for jobless benefits or haven’t yet managed to navigate the benefits system.
While many lay-offs are certain to be short term—some people are already going back to work—Federal Reserve Chairman Jerome Powell made a grim assessment Wednesday in a webinar at the Peterson Institute for International Economics: “A Fed survey being released tomorrow reflects findings similar to many others: Among people who were working in February, almost 40% of those in households making less than $40,000 a year had lost a job in March. […] This reversal of economic fortune has caused a level of pain that is hard to capture in words, as lives are upended amid great uncertainty about the future.”
Many of these lower-wage Americans work in the service industry where, even if they are receiving the enhanced unemployment benefits Congress has passed, they are less likely than other workers to have paid sick leave or to be able to work from home. And many of those lucky enough to have employer-backed health insurance—an ever-smaller percentage of the U.S. workforce—have lost or are at risk of losing that coverage. It should be no surprise that those hurt most are African Americans and Latinos.
As we learned during the Great Recession, the residual impacts of an economic downturn can last for a very long time. During the recession, people ate up their savings, including retirement nest eggs, lost their homes, delayed going to college, took similar or even the same jobs for less pay and lower benefits, and saw their careers damaged. As The New York Times reported in 2018, “The Great Recession Knocked Them Down. Only Some Got Up Again.” Experts noted that many of the young adults graduating during that recession would be hurt for decades. When the economy began improving, recession graduates found themselves fighting for entry-level positions with new graduates. Says Powell:
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