Workforce confidence levels have been improving in many states by the end of June compared to the beginning of March; and to name a few: Ohio, New York, Illinois and Pennsylvania. Many small and medium sized businesses are slowly getting back up and bustling. For the most part, these states have been reopening cautiously.
However, due to the rapid reopening of some states such as Texas, California and Florida – their employment recovery has been shifting backwards recently. Their workforce confidence levels have dropped significantly due to the sudden spikes of COVID-19 cases in June.
Below, you will find a more specific chart illustrated by George Anders from his LinkedIn article to show the confidence levels across the U.S. that are heavily affected by this pandemic.
Table of 12 large states, showing their June COVID-19 cases as well as the workplace confidence levels of residents in those states
Once the workforce confidence level has been exhausted, this can trigger setbacks in causing rollbacks of the reopening plans – delaying the economy and businesses as well as weakening our consumer spending.
While there are still huge spikes in confirmed cases, the unemployment rate in many states are still continuing to rise slowly if not rapidly.
Many Americans are still unemployed, however more are slowly becoming employed again as the unemployment rate has decreased from 14.7% on April 2020 to 11.1% on June 2020. Due to economic reasons, over 9 million are employed as part-time workers or working with significantly reduced hours.
According to the U.S. Private Sector Job Quality Index (JQI), over 37 million jobs in the U.S. are more susceptible to layoffs in the short-term. These jobs are the hardest hit by this economic and health crisis, which include the following that are in the service sector: those in retail, hospitality, food service, real estate, education, etc. It is stated that “most of these were front-line, customer-facing jobs that offer both low hourly wages and a limited number of hours of work per week.“
These low-wage workers are hit in multiple fronts since many of them do not have health insurance from their employers, many of them are underrepresented and underpaid, some of them are in debt, and some do not have enough money in their savings to secure their living expenses. In addition, some of them are ineligible to claim unemployment insurance because there are also those who work off the books and do not pay taxes.
It is also becoming more transparent that many who were supposedly temporary layoffs, are becoming permanent layoffs. This means that there will be a longer extension period of unemployment benefits and we will soon – see a significant increase in new filing claims, surpassing 30 million unemployed Americans as of the week ending July 4th.
With the expansion of unemployment benefits, in addition to the new federal funding of the $600 Pandemic Unemployment Assistance during this recession – many find that it creates a disincentive for the unemployed to return to work, since it is argued that these individuals earn more from unemployment benefits than they did from employment.
However, these unemployment benefits are actually a good thing since it helps keep the economy running. With the coverage and payouts, this will permit individuals to continue paying their rent, groceries, utilities, Internet, other insurance and consuming goods while the economy is still playing its role. While some states are shifting back to their normality, not all of them are confident enough to financially support their citizens, residents as well as businesses. After all, the federal government has the power to generate resources and twist things around to inhibit this exacerbation.
While the $600 Pandemic Emergency Unemployment Compensation is running out and is set to expire on July 26, 2020, all 49 states except for South Dakota are offering an extra 20 weeks of regular extended unemployment insurance benefits until December 31, 2020. In addition, our second stimulus bill which was approved by the House of Representatives – offers an extension of $600 Pandemic Unemployment Benefits until 2021, however it has not been passed by the Senate yet.
Based on the chart above, this depicts where the 50 states are currently standing as of June 2020 over a 12-month period since June 2019. It is affirmed that “Massachusetts had the highest unemployment rate in June, 17.4 percent, followed by New Jersey, 16.6 percent, and New York, 15.7 percent.“
Due to the prolonged joblessness, it is necessary that these unemployment benefits continue even if the economy picks up. Right now, supporting those low wage workers who are now jobless, will be obligatory in ensuring a resilient economy once there is a solution to this public health crisis.
Once everything normalizes, this will be the approach to economic recovery as we will continue to see that there are more available job seekers than job openings.