Amidst Devastating Job Loss, There Is Hope It Is Just Temporary

April job loss numbers in the United States revealed a staggering level of economic devastation in the wake of the coronavirus pandemic, but there is a ray of hope that came along with the news that America lost over 20 million private-sector jobs just in the last month. Of the job losses, 2 million were permanent while 18.1 million unemployed persons reported being temporarily laid-off.

The 2 million permanent job losses increased from the previous reported number of 544,000, while the temporary job losses increased tenfold. This news comes on the heels of polling from Washington Post-Ipsos indicating that nearly 80% of laid-off workers are optimistic they will return to their jobs.

Gallup released their own polling on consumer spending this week, highlighting how there are more people now saying they are spending less money than they measured during the Great Recession in 2009-2010, with 47% believing that their depressed economic activity is temporary.

The speed of the economic collapse has been shocking, and it likely factors into the general sense of optimism among the workforce that this economic crisis is temporary. Two months ago, America was enjoying the lowest unemployment rate in 50 years, and now the country is experiencing the highest unemployment rate in 80 years.

Justin Wolfers, an economist who teaches at the University of Michigan, said that the news of mostly temporary job loss “is an important nugget of good news. If most of these job losses really are temporary layoffs—and if we can maintain and later restore the connective tissue between workers & their jobs—then the economy could bounce back much more strongly than usual.”

Many economists are skeptical that the temporary job losses will remain so, as in any economic environment, the longer people remain temporarily laid-off, the likelier that reality becomes permanent. A report from the Becker Friedman Institute at the University of Chicago predicts 42% of recent layoffs due to the pandemic will become permanent, while the Congressional Budget Office predicts that America will still be stuck at 9% unemployment by the end of 2021.