We officially are in the trenches. Friday’s employment report was the worst in modern history: More than 20 million jobs were lost in April; unemployment is at 14.7 percent. With comparisons to the Great Depression being made, it’s time we rethink the government’s role in supporting work.
The unemployment numbers are based on those who lost a job and report actively looking for work. Meanwhile, the U-6, a broader measure of unemployment that includes those who are underemployed with reduced hours and those who have stopped looking for work, reached a mind-boggling 22.8 percent last month, meaning that more than a fifth of the labor force has been compromised. For comparison, the U-6 rate was 7 percent in February 2020 and the peak during the Great Recession was 17.1 percent.
It feels quaint to remember that unemployment was at historic lows mere months ago, with job creation on a 113-month streak. But it took little time for COVID-19 to push the economy off the cliff, and now it feels even more quaint to think that we would get out of the pandemic and its economic ravages by the summer.
The crisis has morphed from stopping the bleeding—with PPP loans and expanded unemployment benefits—to having anything resembling a functioning economy for the foreseeable future with a vaccine not yet in sight. This will take a new set of policy prescriptions than what’s been tried thus far.