The Bureau of Labor Statistics released the January jobs report on Friday.
It’s a bleak view of the economy, but provides important data to support our advocacy for relief. Knowledge is power. This report proves not only is more relief needed, but it must be robust and comprehensive.
As usual, we break it down with help from some of our favorite economists.
Job recovery is abysmally slow.
We lost 22 million jobs when COVID hit in February and March.
The economy has so far recovered:
+4.8 million jobs in June
+1.8 million in July
+1.5 million in August
+661,000 in September
+638,000 in October
+245,000 in November
-227,000 in December (you saw that right, we LOST jobs in December instead of recovering them)
+49,000 in January
While we did return to recovering jobs rather than losing more of them OVERALL, we didn't even recover half of what we lost in December.
There are still 9.9 million fewer jobs than before the pandemic and jobs recovery has slowed remarkably. As Aaron Sojourner, former White House senior economist, notes, "the last steps back are much harder than the first."
We are actually in a jobs deficit of 12 million jobs when you take into account the jobs that should have been added in 2020 were we not in a major recession. (Elise Gould, EPI)
"At this pace it would take 29 years to get back to pre-recession jobs levels."
The Unemployment Rate
The official unemployment rate lowered from 6.7% to 6.3% which is still higher than the unemployment rate ever was in the early 2000s recession.
Jason Furman, at Peterson Institute, notes that "the unemployment rate fell by 0.4% but 400K left the labor force so the employment rate only rose 0.1%."
Heidi Shierholz at EPI notes, though, that "a quick decomposition finds that 56.8% of that drop was for “good reasons” (employment going up) & 43.4% was for “bad reasons” (people dropping out of the labor force)"
The unemployment rate fell by 0.4pp but 400K left the labor force so the employment rate only rose 0.1pp.
We also know the unemployment rate is inaccurate and leaves our millions of workers.
The BLS reports that in January, there were 10.1 million workers who were officially unemployed. But there were also an additional:
800,000 workers who were temporarily unemployed but misclassified as “employed, not at work" instead of unemployed.
5.1 million workers who were out of work as a result of the virus but were counted as having dropped out of the labor force.
At least another 2.7 million are unemployed but are not being counted because of a technicality in the CPS survey nonresponse.
Together, that equals 18.7 million workers who were out of work as a result of the virus in January. That unemployment rate is 11%
(Heidi Shierholz, EPI)
None of this includes underemployment
BLS reports that 6.8 million people who were working in January had been unable to work at some point in the last four weeks because their employer closed or lost business due to the coronavirus pandemic, and they did not receive pay for the hours they didn’t work.
If we add these 6.8M people to the calculations, 25.5 million workers—15% of the workforce—were still being directly hurt by the coronavirus crisis in January 2021. (Heidi Shierholz, EPI)
AND IT'S STILL PROBABLY A LOW ESTIMATE because it doesn’t count all of the people who have cut hours and pay that aren’t reported to BLS and it doesn't count all of the people who lost a job or hours earlier in that pandemic, but are not back to work.
Long Term Unemployment is at an all-t