As spring approaches its end, we find ourselves in an unfamiliar environment. Employers and employees alike are waking up every morning with an unsure picture of what the future holds. These are not unprecedented times per se, as this nation has faced pandemics and recessions in the past. However, with so much uncertainty surrounding the vaccine and our eventual return to normality, there is ample time to analyze the economic outlook for both our state and the country.
The novel coronavirus has impeded the world’s ability to conduct trade, carry out business, and spur growth. Economics has never been a more viral topic than now. Exorbidant sums of stimulus money are procured for businesses while most working families struggle to tread water. Meanwhile, our institutions are trying to reassess the situation with expediency. Notwithstanding the losses of human capital, data will show you that our circumstances are looking historically unhopeful for workers and their firms. This is not to say that we are in the dark without a flashlight, but these unemployment statistics will make you wonder about the daunting days ahead.
Earlier this week, I was once again afforded the privilege to sit-down and speak (via Zoom) with Bellevue College’s professor of economics, Tyler Saxon. He provided an expert’s opinion on these hotly-contested matters. “An unemployed person is not just somebody who doesn’t have a job. It’s somebody who doesn’t have a job and is actively looking for one,” explained Saxon. “The Bureau of Labor Statistics keeps track of this stuff.” National unemployment figures for April came out on May 8, and numbers are now resembling those of the Great Depression, when roughly one quarter of Americans lost their jobs.
The primary metric to understand national unemployment can be found on the U.S. Bureau of Labor Statistics’ website. Saxon made sense of the data tables and their different formulations. “[Unemployment] went up a little bit in March, but the pandemic really had not taken hold in this country. It wouldn’t have been until April that we see it skyrocket, and it will likely continue going up—we’ll see what happens this month and the next.” The labor data shows that from March to April, total unemployed U.S. workers increased drastically, “This is a huge spike, going up 10% in one month. One out of seven people who wants a job doesn’t have one.”
So, it’s nice work if you can get it. But there are unforseen side effects to lulls in household income: “When unemployment is high, it also means workers don’t have jobs, they don’t have incomes, then the shoppers and consumers don’t have money to spend,” said Saxon, presenting the conundrum of a downward spiral. “We put the economy on pause, so people become unemployed, and lose their money—but if people become unemployed, they lose their income, and their income to spend, and of course that’s why the government gave $1200 to all these people so they money to spend—that is meant to fix some of the demand issues which is caused by high unemployment.” The figures for Washington State are not as recent, the latest state posting being for March. The Employment Security Department of Washington State has collected data which shows that state unemployment could be well above 5%. By this week, our state could expect over 1,000,000 citizens to be without work.
If you total all unemployed groups in the United States, the number comes to roughly 25%, a staggering estimate—rivaling the fallout from the Great Depression. We have been kept socially distant, out-of-work, and without money to support ourselves. Moreover, the non-essential employers cannot afford to compete in a risky market only to gamble lives for profits. Their supply-chains face surpluses and demand-side scarcites as we the consumers can barely afford to participate in our own economy. On the other hand, suppliers themselves cannot carry out their conventional business practices, hindering output and once again depriving workers of their labor. It seems that businessses which are prepared to operate want nothing more than a swift reopening. Shareholders have nothing to lose but their share-value, whereas workers have everything to lose if they contract the virus. This conflict of interest is exacerbating the political divide among public figures. Employers don’t want to pay unemployment, and workers need money.
These are the makings of a prolonged global recession. One silver-lining is that American markets have never looked more appealing—the developing world is left to fend for itself in the wake of this crisis. Nonetheless, our country is growing restless, ready to restart the economy. Citizens want assurance of public safety, peace of mind, but most importantly the ability to work. Without that, families are without income, health insurance, and other employment benefits that have typically supported the average American household. It would be wise to ask ourselves: How do we pay for these recessions? What went wrong? Can we prevent it from happening again?