14.7% unemployment is tragic, and it doesn't even include everyone who's out of work
The American job market whipsawed from historically great to historically terrible in just two months. As businesses closed in response to the coronavirus pandemic, they suddenly laid off and furloughed millions of employees. Layoffs were so severe, they nearly wiped out 10 years of job gains in just two months, and the official US unemployment rate surged to 14.7% in April.
That marks the highest unemployment rate since the US Bureau of Labor Statistics started tracking the monthly data in 1948, and it’s on par with levels of joblessness not seen since the Great Depression in the 1930s, for which the BLS has compiled annual estimates.
But as awful as it is, the high unemployment rate doesn’t show the full extent of the jobs crisis. That’s because millions of jobless Americans are not counted in that number
“While the unemployment rate is a valuable metric, there’s a reason why we put lots of other labor force indicators out there — to give a comprehensive look at what’s happening in the labor force,” said Julie Hatch Maxfield, the BLS associate commissioner overseeing employment and unemployment statistics.
people were counted as unemployed in April.
But what about the millions of workers who lost their jobs and did not search for work? With stay-at-home orders still in place in most states, and all but essential businesses closed, it simply didn’t make sense for most people to start a fresh job hunt in April.
The April unemployment rate doesn’t include:
2.3m people who were “marginally attached” to the labor force. These people looked for a job in last 12 months but not the last four weeks.
10.9m people who worked part-time “for economic reasons.” These people worked reduced hours due to unfavorable business conditions.
Consider all the workers who had steady work before the pandemic, and haven’t fired up a job search in quite some time — maybe even years.
This category — jobless people who “want a job now” but “did not search for work in the previous year” — has hovered around 3 million workers per month for most of the last decade, but it suddenly more than doubled to 6.9 million in April. Because these workers didn’t search for new jobs in the last 12 months, they were not counted in either the unemployment rate or the U6 underemployment rate.
Once you add up all of those people
23.1m + 2.3m + 10.9m + 6.9m
million workers were either out of work or working reduced hours in April.
That’s, by far, one of the worst months for American workers in modern history.
Data: US Bureau of Labor Statistics
Additional work by Mark Oliver and Denis Bouquet