Home Business Coronavirus Raises Unemployment in the United States

Coronavirus Raises Unemployment in the United States

by drbyos

This is the first number to reflect the brutality of the shock to the American economy. During the week of March 15-21, 3.3 million people registered unemployed in the United States. The previous week, the number of new claimants for unemployment benefits was 282,000. The workforce in the United States is 160 million.

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Containment measures related to the coronavirus epidemic have resulted in the closure of many restaurants and businesses, which has resulted in mass layoffs. The federal department of work which published this figure Thursday March 26 specifies that the new registered with unemployment come from the sector of hotel trade, restoration, but also health care, entertainment, industries of transport and logistics.

Half of the population is confined

A number of states and major cities, such as California and New York, have adopted containment measures, so that half of the American population is now subject to them.

The coronavirus epidemic has already claimed more than 1,000 lives in the United States, and nearly 70,000 people have tested positive. This makes the United States the third most affected country, behind China and Italy, according to the Johns-Hopkins University count which references.

The United States was in full employment before the epidemic, with an unemployment rate historically low at 3.5%. Now, forecasts point to unemployment that could affect 20-30% of the workforce within a few weeks, bringing back memories of the great 1930s crisis in the United States.

U.S. GDP Could Fall 10% in 2020

The effects of the epidemic will be very noticeable on American growth: We believe that the contraction in US GDP in the second quarter will be at least as great as that experienced at the height of the financial crisis more than a decade ago. Our estimate is an 8.6% annualized decline in GDP in the second quarter of the current year “, wrote the ING bank in a note.

Economist Véronique Riches-Flores calculates that US GDP could fall by 10 to 11% in 2020, with a decline of 25% in the second quarter of the year alone.

An extensive support plan

The US Senate adopted a plan to support the economy on Wednesday evening. It provides for measures in favor of individuals: each adult, below a certain level of income, will receive $ 1,200 (€ 1,100), plus $ 500 per dependent child (€ 460). In addition, each person who has lost their job will receive 600 dollars per week (550 €), for the next 4 months, in addition to their unemployment. In addition, the right to unemployment benefit has been extended to self-employed or part-time workers, as well as to sick and quarantined people.

Trump wants to “make a check” to every American

This plan also provides aid to businesses to enable them to keep their employees. It relates to an amount of 2,000 billion dollars (1,823 billion euros).

Too much money for big business?

This plan has yet to be voted on by the House of Representatives, but is not yet unanimous. A hundred economics professors from major American universities signed a joint letter Wednesday (March 25th) to deplore the fact that this plan is spending too much money on bailouting big business, and not enough on those who need it most.

“The government is writing a check to big companies, like United Airlines, but these sums could be better directed by going to the precarious workers of the Internet economy and the salaried health workers”says Paul Pfleiderer, professor of economics at Stanford University in California.

The signatories of this letter propose that the big American companies be put under the mode of the bankruptcy, which would not prevent them from operating but would freeze their debts, while the federal money would go to the small companies particularly affected by this crisis. .

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