Why the unemployed in America could face a lost decade

are staggering, even to those hardened by the experience of the global financial crisis. Disney will furlough 100,000 of its hotel and theme-park workers. Uber may slash its staff by a fifth. Fully 26m new claims for unemployment insurance have been filed in America since late March. By April 18th more than a tenth of participants in the labour force were receiving unemployment benefits, the highest rate on record. In March alone American firms shed more than 700,000 jobs, on net.

How severe will the crisis be? America’s unemployment rate rose to around 10% after the global financial crisis and to 25% during the Depression. Recent forecasts, though beset by uncertainty, put the probable peak rate in 2020 somewhere between those figures. Modelling based on recent filings for benefits suggests that the unemployment rate in mid-April may have been around 16%, according to Ernie Tedeschi of Evercore, a consultancy.

The heights that unemployment reaches will depend on the depths that economic activity plumbs. There is no question that the drop in output through the first half of 2020 will be staggering. Figures published on April 29th showed thatprojects that output will fall by about 12% between the first quarter and the second, or an annualised pace of roughly -40% .

Even in the rosiest of scenarios, the outlook for those without a job seems grim. Were unemployment to fall as quickly as it did from 1933 to 1937, a return to pre-pandemic jobless rates would still take half a decade. At the rate of improvement experienced after the financial crisis, by contrast, full recovery could take two decades. All that after the hardship of the 2010s seems nearly unthinkable.

Source: News Formal (newsformal.com)

Lets stay positive ✨

Didn't we just have a lost decade? I wonder why millennials think capitalism is broke?🙄

I have done this twice. And yes it takes a decade to recover. At this point in my working life I don't have another decade.

Paisa sabka nachata hai

Dignity of labour is more important now and the govts should focus on providing better public services

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