PERSONAL FINANCE Unemployment was supposed to be temporary. Now, it’s permanent for almost 4 million

Millions of Americans have headed back to work since the depths of the coronavirus-induced recession in the spring.

But nearly 13 million remain unemployed — about 7 million more workers than pre-pandemic levels.

And there are worrying trends emerging among this group. Namely, a growing share of job loss is permanent (rather than temporary) and is longer-term in nature, stretching out beyond six months.

These trends carry negative financial effects for the unemployed and their families, including lost income, reduced likelihood of finding a job and lower earnings when (and if) they get one, according to economists.

Chart showing total persons who are unemployed on temporary layoff and who are permanent job losers monthly in 2020.

The recession has hit lower-wage workers and minorities — who are less likely to be able to withstand these financial shocks — harder than other groups.

“The impacts [this] will have on the community are tremendous,” Behnaz Mansouri, a senior attorney with the Unemployment Law Project, said of the associated financial repercussions.

Permanent layoffs

The mass unemployment that hit in April was overwhelmingly thought to be a temporary phenomenon that would quickly rebound as businesses reopened, Mansouri said.

Nearly 4 in 5 unemployed workers — representing more than 18 million people — were on temporary layoff at the height of the unemployment crisis and expected to be recalled to work.

That number has since fallen to about 4.6 million, or about 37% of the unemployed, as of September — still higher than any period since modern record keeping began in the 1960s.

Source: CNBC

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