In case there was any doubt just how seriously the coronavirus pandemic is hurting the economy, new data from the Bureau of Labor Statistics shows that the labor force participation rate in the U.S. sunk to a 47-year low of just 60.2 percent in April.
The numbers are even more staggering when you consider that the number of people who aren’t in the labor force skyrocketed by 6,570,000 to a record-breaking 103,415,000. The labor force consists of people who are employed as well as those who are unemployed, and right now a third of the American population is considered not in the labor force; this figure does not count people who have no job but are not looking for one. All told, the labor participation rate has fallen 2.5 percentage points since March to hit the lowest it has dropped since January 1973’s 60.0 percent.
Fortunes have changed dramatically in recent times; the number of employed Americans previously broke 25 records during the Trump administration. In April, more than 23 million Americans were unemployed, which is nearly 16 million more than March’s figure.
Unemployment has now reached an all-time high of 14.7 percent after experiencing its biggest month-to-month increase since the Bureau of Labor Statistics started tracking this data in 1948. Before the coronavirus crisis, the country’s unemployment rate had been hovering at a 50-year-low of 3.5 percent for around six months.
Needless to say, the falling participation rate is extremely concerning. Not only does it show a decline in the relative labor resources available for producing goods and services, but it’s also important to remember that people who participate in the labor force support those who do not, either directly among their households or indirectly via taxes.
The biggest job losses in April were seen in hospitality and leisure; education and health services weren’t far behind. All major worker groups saw climbs in unemployment rates across various ages, genders and ethnicities. Nearly every group saw record highs.
Although these figures are disheartening, President Trump has said that they’re completely expected at this point in time. Speaking on Fox & Friends, he vowed to turn the situation around.
He said: “Those jobs will all be back, and they’ll be back very soon, and next year we’re going to have a phenomenal year. People are ready to go. We’ve got to get it open.”
Reopening too soon could hurt the economy more than it helps
Unfortunately, a full reopening of the economy too soon might have a positive effect in the short term, but it could spell an even bigger disaster over the long run. A new model from researchers at the University of Washington that was previously used by the White House indicates that 134,000 Americans could die by August; this total was revised to account for the expected impact of state openings and is more than double their estimate from last month.
Moreover, an internal report from the CDC shows that the daily death toll in the U.S. is expected to reach around 3,000 by June 1; this is nearly twice the current number and goes against the notion that the worst of this pandemic has already passed.
A recent national poll found that Americans are generally opposed to most reopenings. A little more than half – 56 percent – said they feel comfortable going to the grocery store, but 67 percent said they’d be unconformable shopping at a retail store and 78 percent said they would not be comfortable dining in a sit-down restaurant.
Although the economy is taking a sizeable hit, it’s important to remember why business came to a halt in the first place. The threat is far from over, and history has shown us that a second wave could be even more devastating than the first if we’re not careful.
Sources for this article include: