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Unemployment problem deepens
Nearly 15% of American workers don't have a job, new data shows. KTVU's Tom Vacar explores the state of the economy.
April came in like a lion and went out at as a fiery dragon still spewing economic flames.
In fact, 20.5 million American's lost heir jobs in April and the Labor Department says the unemployment rate for American workers stands at 14.7% and rising. That's the highest and fastest unemployment rate since Uncle Sam started tracking job losses in 1939, 81 years ago.
In the last seven weeks, the U.S. has lost two and a half tiimes the number of workers than in the Great Recession; wiping almost all of the job gains regained since then.
But, is the jobless rate just 14.7%?
“Let me assure you, those numbers understate the unemployment rate in this country,” said Gov. Gavin Newsom.
Michael Bernick is a labor lawyer and a former EDD Director who said, “We won't have the state numbers for two weeks but likely to be even higher that 14.7%. “The state of California is north of 20%,” said the Governor.
USA Today listed 5 reasons why people should not freak out. First, jobless claims are trending down. In California, 1 million layoffs in a week in early April are down to 321,000 a week now.
“But, 321,000 job losses is still eight times, eight times the number that we we averaging in the first two months,” said Bernick.
Second, temporarily layoffs may be back to work sooner.
But, Bernick cites a University of Chicago job study that just came out that says 42% of the job losses are not coming back.
However, unemployment could skyrocket again if Washington doesn't replenish state and local governments to pay public employees. “That's a sector that's largely been immune up to now, even it's beginning to get hit by the fiscal dislocations,” said Bernick.
Third, stocks have bounced back. The Dow climbed up 750 points this week.
“Any time you have investor or consumer confidence indicators going up, that helps in terms of, you know, job reconstruction,” said Bernick.
Fourth, spending is starting to recover. "The question is: is the consumer spending going to be increasing enough?” asks Bernick.
Fifth, parts of Asia don't see a resurgence of Covid cases yet, which suggest it can be controlled.
But merely opening up a relative few retailers for curbside business won't help much. “That will have some small, but very, very minor impact,” said Bernick.
Bernick says since the Federal Payroll Protection Plan, which has kept things better than it could have been, expires at the end of June, we should re-open as quickly as possible without resurging infections. Slash business fees and taxes until they recover. Institute targeted post-Depression like public employment programs.