The coronavirus pandemic has undoubtedly affected many aspects of life – including employment. In the U.S., state unemployment insurance systems are “ill-equipped to handle the expected deluge of claims from workers who are getting laid off at an unprecedented pace as the coronavirus pandemic ravages the U.S. economy,” as reported by Fox Business.
According to early estimates, at least a million workers could lose their jobs in March. This is a dramatic turnaround from February – when employers added 273,000 jobs and unemployment dipped to 3.5 percent.
Fox Business reported that states “rely on employer taxes that they use to finance their insurance programs. But despite the historically long, 11-year economic expansion, 22 states’ unemployment trust funds are unprepared to pay out enough in unemployment benefits in the case of a recession, according to Labor Department data.”
— Miketedian (@miketeda104) March 19, 2020
“The trust funds need to have enough to pay benefits for a full year in order to be considered recession-ready,” added the report.
Josh Bivens, director of research at Economic Policy Institute, wrote in a blog post that “a coronavirus recession is inevitable.” He estimated that at least 3 million jobs will be lost by summer.
“If this response includes enough fiscal stimulus that is well-targeted and sustained so long as the economy remains weak, job loss will be substantially reduced relative to any scenario where policymakers drag their feet. Even with moderate fiscal stimulus, we’re likely to see 3 million jobs lost by summertime. Keeping this number down and allowing any job loss to be quickly recouped after the crisis ends should spur policymakers to act,” Bivens said.
“We have no real idea how quickly the economy might recover from the coronavirus shock, even with an optimal policy response. We shouldn’t guess. Instead, we should make sure the economy gets the support it needs so long as spending remains weak,” he wrote.