The American Covid Recession

August 30, 2020

New Delhi: The Covid pandemic is not only a health emergency but also an economic one. The economic impacts of Covid-19 has been far and wide hurting virtually every industry and leaving millions of people without pay checks to pay the bills. The need to contain the virus has resulted into stay-at-home orders, closure of non-essential businesses, and reduced demands of products and services, which in turn, has led to many workers losing their jobs. Around 40 million Americans were thrown out of work in the first two months of virus striking the USA. People are applying for unemployment at the rate of 1.5 million per week.1 The National Bureau of Economic Research announced as early as May that the United States is officially in recession.

Economists are labelling the “Covid-Recession” to be worse than the Great Recession of 2008 in America. About 8.6 million jobs were lost during the entirety of the Great Recession while more than 20 million jobs were eliminated only in the month of April due to Covid pandemic.2 Although women make up a smaller percentage of the working population, 55 percent of those who are being laid off are females. The very high percentage of women being laid off might be a result of the fact that the industries that have been hit the hardest include hospitality, leisure, education and healthcare. These industries employ more females then males. Economists have long known that the most vulnerable populations during economic recessions in America are Black and Hispanic Americans. The black unemployment rate has been double that of white unemployment and the Hispanics are catching up with the same kinds of numbers. Job segregation has pushed the blacks and the Hispanics into the low paying, no benefit industries like hospitality.3 

The economists all over the world are hoping that once the novel coronavirus is defeated and all the containment policies are let up, the economy will bounce back. There is an urgent need for the government to address this unemployment issue. Until then, many continue to rely on unemployment benefits that accompany the Coronavirus Aid and the Relief and Economic Security Act that was enacted in March.4

(Nandini Bhatnagar is an Intern with OneWorld Foundation India)

References:

[1] Phil McClausland, (June 2020). NBC News.
https://www.nbcnews.com/specials/generations-americans-unemployed-covid-19/

[1] Sarah Hansen (May 2020). Here’s How The Coronavirus Recession Compares To The Great Recession. Forbes.
https://www.forbes.com/sites/sarahhansen/2020/05/08/heres-how-the-coronavirus-recession-compares-to-the-great-recession/#2e6d24af57a7

[1] Lauren Aratani. (May 2020). Jobless America: the coronavirus unemployment crisis in figures. The Guardian.
https://www.theguardian.com/business/2020/may/28/jobless-america-unemployment-coronavirus-in-figures

[1] Phil McClausland. (June 2020) NBC News.
https://www.nbcnews.com/specials/generations-americans-unemployed-covid-19/