Adedapo Adesanya
By Adedapo Adesanya
About 20 million people in the United States lost their jobs in April as the country’s unemployment rate rose to 14.7 percent from just 4.4 percent in March.
Largely caused by the coronavirus pandemic that has affected the global economy, it has triggered what appears to be a financial crisis that has not been seen since the Great Depression.
The US Department of Labour announced on Friday, May 8 that the figure had further erased a 50-year unemployment low of 3.5 percent recorded in February before the US was hit by the virus.
According to reports, a decade’s worth of job gains have now been wiped out in under two months.
The latest jobs losses are the worst monthly figure on record. The closest comparison came in 1933 when unemployment hit an estimated 25 percent but that was before the US government began publishing official statistics.
This now tops a previous peak for unemployment that was at 10.8 percent in 1982 and the largest monthly job loss, close to 2 million came in September 1945 at the end of the second world war, when the country was demobilizing.
April’s job losses also easily outweigh the 800,000 jobs lost in March 2009, during the last global recession.
According to the country’s department of labour, the job losses swept across the economy and all industries suffered as a result. Leisure and hospitality lost 7.7 million jobs as the sector was hit hard by quarantine measures. 2.5 million jobs were also lost in education and health services, where dentist offices shed 503,000 people.
Further, the American retail industry lost 2.1 million jobs and manufacturing employment dropped by 1.3 million.
In a breakdown by race, unemployment for African Americans rose from 6.7 percent in March to 16.7 percent in April while for white Americans unemployment also rose from 4 percent to 14.2 percent.
By calculation, close to 6 million people in the US dropped out of the labour force during the month of April – meaning they stopped looking for work.
The labour force participation rate – which measures the percentage of the population working or looking for work – dropped 2.5 percent over the month to 60.2 percent, recording the lowest rate since January 1973.
Efforts to curb the spread of the pandemic, which has killed more than 70,000 Americans to-date, began in March. States began to introduce social distancing measures and close non-essential businesses and this resulted in more that 33 million Americans filing for first-time unemployment benefits and ended the longest running US economic expansion on record.
Even as hospitals struggled to serve a rising number of patients, health care workers suffered layoffs, too, with outpatient services like physicians and dentists’ offices cutting 1.2 million jobs in April.
