Unemployment rate has reduced since March but there is a new aspect of problem that deserves attention- prolonged unemployment.
The unemployment chart was finally beginning to dip. But once again, the figures have skyrocketed with the highest spike in unemployment benefits registration since late August. 898,000 unemployment benefits claims were filed last week in the US due to consistent layoffs. The lack of economic activity has held back recovery for majority of US businesses.
Months after the onset of the pandemic, companies are once again envisaging the roll count of their manpower. Around 7 million unemployment benefits claims were registered in the month of March. The numbers were on decline since then. However, recent reports reveal a spike in numbers once again during the month of September.
In March 2020 the unemployment rate surged to 14. 7 percent which was the highest since the Great Depression. This stood at 8.4 percent for the month of August, lowest since the pandemic.
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A Problem deeper than just unemployment benefits claims
While it should demonstrate that more and more Americans are out of work again, it is not true. The figures don’t represent the additional unemployed people in the country but the extended period for which they have been unemployed. This is because the figures pertain to people registering increasingly for the federal program that provides support to jobless for an extended period and not the regular state programs. Registrations for regular state programs have actually declined from 11.2 million to 10 million during the first week of October. These figures have been declining since summer.
However, this decline also suggests the people are exhausting their payments and have reached the maximum duration limit available under the state program. Consequently, people are registering increasingly for the federal program that was announced by the government earlier this spring. This program provides 13 weeks of extended unemployment benefits. In the week that ended on September 26, around 2.8 million people registered and availed support through the program, signifying that more Americans are extending their dependence on unemployment support due to the prolonged job crisis. This is a problem because the program expires by the end of the year.
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Giant corporations like Walt Disney, Allstate Corp., and Warner Media announced huge layoffs in the preceding few weeks. These numbers are likely to be further added in the list. A House stimulus proposal worth $1.8 trillion was submitted formally on weekend in the White House which is close to the $2.2 trillion coronavirus bill passed by the Democrats earlier on Thursday.
Watch: House Democrats pass $2.2 Trillion Virus Relief Bill
Massive layoffs by giant firms like Walt Disney, Allstate, and Warner Media have contributed to the recent spike in unemployment benefits claims.
Jobs and Joblessness trends — Trump vs Obama
Some of the most golden days of job creation in US history were experienced under the Barack Obama administration between 2014 and 2015. Annual job infusion in the economy was at its highest peak ever during 2015 when 225,000 new jobs were created every month. The Trump administration was also effective enough in maintaining the legacy with a monthly infusion of 193,000 jobs. However, figures state that President Trump inherited an economy robust enough to be run like that. The pandemic ruined the trend.
Unemployment rate in US was on a decline since 2011 and was 4.7 percent when President Trump took office. This went down to 3.5 percent in late 2019. It won’t be wrong to say that former President Barack Obama started a legacy that President Trump continued efficiently. Likewise, the pandemic ruined the unemployment conquest soaring the unemployment rate to 15 percent in April. Surprisingly, the rate of Black unemployment was starkly high under Obama. It was 7.5 percent when President Trump took office and by August 2019, it came down to 5.4 percent. Black employment has been hit the hardest during the pandemic reaching a whopping 13 percent.
