The economy President-elect Biden is inheriting: 26.8 million workers—15.8% of the workforce—are being directly hurt by the coronavirus crisis
We now have a full year of jobs data for 2020. This is an important moment to take stock of where things stand in the labor market.
The official unemployment rate was 6.7% in December, and the official number of unemployed workers was 10.7 million, according to the Bureau of Labor Statistics (BLS). These official numbers are a vast undercount of the number of workers being harmed by the weak labor market, however. In fact, 26.8 million workers—15.8% of the workforce—are either unemployed, otherwise out of work due to the pandemic, or employed but experiencing a drop in hours and pay. Here are the missing factors:
- Some workers are being misclassified as “employed, not at work” instead of unemployed. BLS has discussed at length that there have been many workers who have been misclassified as “employed, not at work” during this pandemic who should be classified as “temporarily unemployed.” In December, there were 1.0 million such workers, a substantial increase from November. (Wonky aside: Some of these workers may not have had the option of being classified as “temporarily unemployed,” meaning they weren’t technically misclassified, but all of them were out of work because of the virus.) Accounting for these workers, the unemployment rate would be 7.3%.
How to organize in the anti-union South
Amy Waters, RN, CPN, at Mission Hospital in Asheville, NC, detailed her story of a successful union drive as a member of National Nurses United at EPI’s panel discussion, “Rebuilding Collective Bargaining Back Better.”
“We are now the first private hospital in North Carolina with a union and we are the largest newly formed union in the South, since, I believe, the 1970s,” says Waters.
Teaching at the intersection of social-justice activism and education
Jesse Hagopian, teacher and co-adviser of the Black Student Union at Garfield High School in Seattle, WA, spoke about the intersection of social-justice unionism and the Black Lives Matter at School movement at EPI’s book event, “Strike for the Common Good: Fighting for the Future of Public Education.”
“I think the fundamental problem with our education system is this fundamental problem we have with all of our systems and institutions in this country, and that is that they’re a product of an economic and political structure that is built on profit, racism, oppression, and inequality—namely capitalism,” says Hagopian.
What to watch on jobs day: Little to no improvement in December and huge losses over 2020
Jobs day on Friday will not only give us a read on the labor market for December, but it will also give us a sense of the devastating economy of 2020 and the economy President-elect Biden is walking into. Overall job growth for December will likely continue to trend toward zero, with some chance of employment actually falling. At the same time, rising COVID-19 caseloads, hospitalizations, and deaths means our health and economic woes are far from over. President-elect Biden is inheriting an exceedingly troubled economy with millions of families just trying to stay afloat. Over the Trump administration’s term, more jobs were lost than gained—there are 541,000 fewer jobs in the U.S. economy than when he took office in January 2016. And not only does President-elect Biden enter his first term in a disastrous economy, he also inherits a litany of anti-worker policy decisions from his predecessor who squandered the labor market strength he inherited.
The figure below provides a decent picture of the employment situation over the last year. In January and February, we saw solid job growth with gains of 214,000 and 251,000, respectively. After COVID-19 hit, federal legislation expanded unemployment insurance, increasing both eligibility and weekly payments, making it financially viable for millions of workers to safely stay home while public health officials assessed the situation. However, businesses that were shuttered in the interest of public health received insufficient federal economic support to keep paying their workers even as they remained safely at home. The U.S. economy experienced losses in March and April of 1.4 million and 20.8 million jobs, respectively, losses the likes of which we hadn’t experienced in modern history. Millions were on temporary layoff and once states started opening back up, some of those were rehired. We saw a significant bounce back in May and June with 2.7 million and 4.9 million jobs added, respectively. Unfortunately, over the succeeding five months, job growth has rapidly slowed as federal relief expired and the virus surged: 1.8 million in July down to 1.5 million in August then 711,000, 610,000, and a paltry 245,000 in November. December looks to continue the trend with low (or even negative) job growth expected.
First UI claims of 2021 are still higher than the worst of the Great Recession
There was an armed insurrection at the U.S. Capitol yesterday in which the police were complicit in a way that has everything to do with structural racism. Structural racism has also meant that Black and Latinx working people are experiencing a disproportionate health and economic impact of the COVID-19 pandemic. The UI data released this morning show a labor market in turmoil as COVID-19 surges.
Another 948,000 people applied for Unemployment Insurance (UI) benefits last week, including 787,000 people who applied for regular state UI and 161,000 who applied for Pandemic Unemployment Assistance (PUA). The 948,000 who applied for UI last week was a decrease of 152,000 from the prior week. That drop was driven almost entirely by a drop in PUA claims, undoubtedly due to uncertainty over whether PUA would be extended, as Trump delayed signing the relief bill during that week. Now that the program has been extended (more on that below), I expect PUA claims to rise again in coming weeks.
Last week was the 42nd straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were greater than the second-worst week of the Great Recession.)
Unemployment insurance claims continue to climb: Congress must pass a stimulus package to prevent millions of people from being left with nothing
Another 1.3 million people applied for Unemployment Insurance (UI) benefits last week, including 885,000 people who applied for regular state UI and 455,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.3 million who applied for UI last week was an increase of 63,000 from the prior week. This was the second week in a row of increases, and initial claims are now back to their highest point since September. Layoffs are rising as the COVID-19 virus surges and demand weakens. And, last week was the 39th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were greater than the second-worst week of the Great Recession.)
Most states provide 26 weeks (six months) of regular benefits. Given the length of this crisis, many workers have exhausted their regular state UI benefits. In the most recent data, continuing claims for regular state UI dropped by 273,000. For now, after an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI. However, PEUC is not rising as fast as continuing claims for regular state UI are dropping. Why? Many of the roughly 2 million workers who were on UI before the recession began, or who are in states with less than the standard 26 weeks of regular state benefits, are now exhausting PEUC benefits, at the same time others are taking it up. The Department of Labor reports that nearly 2 million workers have exhausted PEUC so far—and that is a vast undercount because many states have not yet reported PEUC exhaustions past October (see column C43 in form ETA 5159 for PEUC here).
In some states, if workers exhaust PEUC, they can get on yet another program, Extended Benefits (EB). However, in the latest data, just 694,000 workers were on EB. That’s likely less than a third of those who have exhausted PEUC. Most are left with nothing.
State attorneys general taking on protection of workers’ rights
State attorneys general (AGs) have been getting more and more involved in defending workers’ rights, including bringing wage theft cases, suing companies such as Uber and Lyft for misclassification, and fighting noncompete and no-poach agreements.
State AGs’ evolving labor-enforcement role was the topic of the “State Attorneys General as Protectors of Workers’ Rights” webinar hosted by the Economic Policy Institute and the Harvard Law School Labor and Worklife Program on December 3, 2020, which included insights from bureau, division, and section chiefs who lead labor rights work in their state attorneys general offices.
The panelists talked about some of their cases and shared thoughts about how state AGs select cases, how they decide whether to proceed civilly or with a criminal prosecution, and how they’ve worked, sometimes behind the scenes, to safeguard workplace safety and health during the pandemic. The webinar followed up on an August report on this topic issued by EPI and the Harvard Labor and Worklife Program.
Top five EPI blog posts of 2020
In 2020, we saw fissures of inequality become chasms, while aging unemployment systems shut workers out. Education was turned upside down—and we gained new respect for teachers.
We also saw unimaginable job losses, and this past spring our blog post predicting tens of millions of workers would be impacted by the pandemic got a lot of reader attention.
Here’s a countdown of the five most-read EPI blog posts in 2020.
The Biden administration can reverse much of Trump’s bad labor policy without Congress
For the last four years, at every turn, the Trump administration systematically promoted the interests of corporations and shareholders over those of working people. Through a series of executive orders and agency regulations, the Trump administration attacked workers’ health and safety, wages, and collective bargaining rights. It is critical that the Biden administration work from day one to reverse these actions and strengthen workers’ rights. Here, we review the Trump administration’s anti-worker executive and regulatory actions and chart a course for the new administration to address these harmful actions.
Top 10 EPI reports of 2020
Staying safe. Educating our children. Having a say in workplace conditions. Fighting for fair wages when systemic racism, consolidated wealth, and corporate power thwart opportunity.
These concerns were top of mind for our readers in 2020, according to our compilation of EPI’s most-read reports.