The ongoing economic crisis sparked by the coronavirus pandemic will leave over 17 million workers without a job to return to once the outbreak is over, according to a new analysis from the Economic Policy Institute's Heidi Shierholz, who also predicts without sustained and continued federal action 10 million or more jobs could be lost in the next year.
"Of the 32.5 million workers who are either officially unemployed or otherwise out of work because of the virus, only 14.8 million workers (or 45.6%) can reasonably expect to be called back to a prior job, which means 17.6 million (or 54.4%) cannot," Shierholz writes.
Even if that number holds, Bloomberg's Noah Smith tweeted, it's s best-case scenario that would keep the economy at Great Recession levels of unemployment.
The 10.7% number represents the hard floor that we'll bump up against when the virus vanishes, leaving us in a Great Recession level unemployment situation. https://t.co/nP1ZPZssQy
— "Rabbits are easy to litter-train" Smith (@Noahpinion) June 29, 2020
The institute's senior economist and director of policy, Shierholz has been tracking the real unemployment numbers since the beginning of the crisis as the pandemic has decimated the labor market. More sunny than expected unemployment news in May gave the wrong impression about the ongoing catastrophe, she explains in her analysis Monday.
"Some are saying that because rehiring took place in May and the unemployment rate improved, perhaps more aid from Congress isn't needed because workers will just return to their old jobs," writes Shierholz. "This logic could not be more misguided."
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— Economic Policy Institute (@EconomicPolicy) June 29, 2020
In addition to the jobs that are lost and not returning, Shierholz warns that without continued—and increased—federal intervention in the economy, another more than 10 million jobs will disappear through next year.
As Shierholz details:
It is important to note that the prospect of even those who can reasonably expect to be called back to a prior job actually getting called back will require Congress to act. For example, if Congress doesn't extend the extra $600 in weekly unemployment insurance payments, that will cost us 5.1 million jobs over the next year, and if it doesn't provide fiscal aid to state and local governments to fill in their budget shortfalls, it will cost another 5.3 million jobs by the end of 2021.
Bottom line, writes Shierholz, the federal government must continue its involvement in ensuring the unemployment levels stay as low as possible.
"We can't turn off federal relief too early," she writes.