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Long-term unemployment continues to rise

Economic damage of recession grows
By staff |
November 9, 2020
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San José, CA - On Friday, November 5 the U.S. Department of Labor released its monthly employment report for October, as President Trump faced defeat in the presidential election. The number of long-term unemployed, who have been out of work for more than six months, jumped by more than a million to outpace those recently laid off for the first time. The number of people collecting long-term unemployment under the federal Pandemic Emergency Unemployment Compensation or PEUC, and the state Extended Benefits, rose by almost 500,000 in the week of the unemployment survey alone.

The official unemployment rate fell to 6.9% from 7.9% in September. But this is still double the February unemployment rate of 3.5%. The official report, based on a survey of households, is also far lower than the number of people who are collecting government aid. In the same week that the survey for the unemployment report was taken, October 12-17, there were more than 21.5 million people who collected government aid, almost double the 11.1 million who said that they were unemployed.

As expected, the number of new jobs created continued to slow, with 638,000 new jobs created, down from 672,000 in September. But despite the large number of new jobs, more than 10 million workers remain out of work after having lost their jobs during the economic crisis. The jobs report showed that state and local public colleges and K-12 schools shed almost 160,000 jobs as they continue to cut back because of budget crisis despite the increasing demands that the pandemic has put on schools.

This past three days the pandemic continued to set record highs for new infections. The United States had more than 100,000 new cases for the first time ever on Wednesday, more than 120,000 on Thursday, and then more than 130,000 on Friday. Hospitalizations are also on the rise as are deaths, which have been more than 1000 per day for the first time since August, when the United States was in the midst of its second wave.

More and more state and local governments are re-imposing restrictions to try to contain the virus or slowing or stopping relaxation of restrictions. The combination of COVID-19, the cold weather of winter and growing economic distress are a particular danger to the leisure and hospitality industries including travel, hotels and restaurants. These industries added more than 271,000 jobs in November, or more than 40% of the total job gain. More of the job gains in November were also temporary jobs, which can most easily be cut by businesses.

The end of the year is also the deadline for the federal Pandemic Unemployment Assistance for self-employed and gig workers. If Congress does not act, more than 13 million people could lose their assistance in the last week of December. Forbearance on student loans is also set to end at that time, and more and more tenants will be timed out of the Centers for Disease Control eviction moratorium over the next two months.