The peak unemployment level of the Great Depression was 24.9% in 1933. The current “civilian labor force” was 163,047,000 in February, according to the Bureau of Labor Statistics (BLS). If the jobless rate reaches what it was in 1933, 40.5 million Americans will be out of work. The number is not farfetched.
Treasury Secretary Steven Mnuchin told Congress that unemployment could reach 20% as the coronavirus spreads. At the time, the figure was considered absurd. Other forecasts are lower. Goldman Sachs put the figure at 15%. The St. Louis Federal Reserve Bank said unemployment could reach 35%.
These forecasts were before jobless claims reached 10 million in two weeks. Many people who are out of work have not yet filed either. While it is impossible to give an exact number of those who have not filed yet, it is certainly into the millions. Real unemployment, as defined by the BLS, could be close to 14 million people. That would put the jobless rate at almost 9% now. And that is before millions of people laid off in the past few days are counted.
The latest mass layoffs have affected millions of more workers. Walt Disney laid off what has to be 100,000 workers. Disney has a total of 350,000 employees. The “furlough” includes most people in its largest divisions.
Oil industry layoffs, driven by lower oil prices and the economic climate, could lead to 50,000 to 75,000 layoffs soon, according to Oilprice.com. If the price of crude drops below $20 a barrel for any amount of time, that number will increase.
The Alliance for Automotive Innovation said 42 of the 44 car assembly plants in the United States are closed. Forecasts put car sales in the United States down by 4 million this year. Between them, Ford and GM have over 400,000 workers. Many of them will have to be laid off it the car sales picture worsens. This does not include other car manufacturers with fewer workers, which in total employ tens of thousands.
Layoffs are not over in retail. J.C. Penney cut most of its 95,000 workforce. All hourly store employees were cut. Some people with administrative jobs and e-commerce positions will remain, but that is a small fraction of the total. Several large retailers that have not made layoffs so far are expected to do so. Layoffs among retailers will top a million, and they could be twice that.
Of course, a very small number of large companies are hiring. Amazon will add as many as 150,000. Some big-box retailers, like Walmart, will add tens of thousands. However, these are by far the exceptions.
What is the number of unemployed people now? Certainly, between 15 million and 20 million. The effects of the virus on health and business are expected to worsen for months. Many have forecast another wave in the fall. The rise in unemployment is not nearly over. The depression-level jobless rate of 24.9% may be closer than people think.
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