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Workers and the COVID-19 Recession: Trends in UI Claims & Benefits, Jobs, and Unemployment

  • Author(s): Allegretto, Sylvia A.;
  • Liedtke, Bryce
  • et al.
Abstract

The COVID-19 crisis that hit the world and the United States has resulted in profound changes to our way of life. While this paper focuses on workers and economic effects, we note that the crisis is foremost one of a pandemic. The economic situation is a byproduct. There have been significant differences in countries’ policy responses to the pandemic, which in turn have led to important disparate economic outcomes. It is clear the U.S. Federal government’s abdication of responsibility in responding to the crisis has left far too many in peril, both economically and healthwise. The absence of a coherent national strategy has exposed and exacerbated long-standing racial and economic inequalities—again, both economically and healthwise. Fits and starts of economic activity continue to have feedback loops with the evolution of the virus. Public policy and investment will largely determine our rates of sickness, death and economic pain.

It also warrants early emphasis that information contained in this paper of the profound economic devastation wrought by COVID-19 is neither a call for immediate business reopenings nor stimulus spending as traditionally understood. Comparing the current economic crisis with the Great Recession or any other contemporary recession shows that this crisis is categorically different. While attempts to return quickly to “business as usual” may have been desirable in previous downturns, employing such a strategy in the midst of a pandemic is more likely to be marked by mass death than by sustained economic inroads.

Looking back at the economic recovery following the Great Recession, we see a prolonged period of sluggish growth and weak labor markets; it is clear that stimulus efforts did not go far enough as California endured 44 straight months of double-digit unemployment. The ideal approach to the current crisis, however, may ironically be a slow-recovery path—yet one with additional government relief programs that are large, sustained, flexible, and perhaps even radical, reflecting the gravity of the situation. Relief, more akin to economic survival packages, should keep families as close to whole as possible throughout the pandemic. Additionally, for those who remained on the job as well as those returning to work, enforceable mandated safety regulations are warranted, including workplace grievance procedures and safety boards that include worker voice; this is especially critical for the majority of workers who are not represented by unions.

The coronavirus-induced downturn is not a recession per se, but instead is an economy intentionally stunted as a precaution against sickness and death. Maintaining a degree of economic suspended animation is required if we are to gain control of the pandemic to a degree that, in turn, will allow a safer return of the economy. This will require large and ongoing amounts of government spending. The country is struggling with the question of whether the shutdown is worth the economic damage. It is worth asking, however, if avoidable loss of life is an acceptable cost of returning to the status quo—especially in a country with vast wealth and means to avert such suffering. We move to our economic analyses of the workforce with deep acknowledgment and gratitude to all of the workers who have sacrificed, and continue to sacrifice, so much in the face of this crisis.

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