Widespread Job Cuts Continue 8 Weeks After 1st Stay-At-Home Orders Were Imposed
MARY LOUISE KELLY, HOST:
Even as states across the country emerge from lockdown, the economy continues to crater. The Labor Department says nearly 3 million more Americans filed for unemployment last week. Some 36 million have filed claims since the pandemic triggered widespread lockdowns back in the middle of March. NPR chief economics correspondent Scott Horsley joins me for more. Hi, Scott.
SCOTT HORSLEY, BYLINE: Hi, Mary Louise.
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KELLY: It sounds like your phone is wearing in there.
KELLY: I mean, you know, we might have thought - we might have hoped the job market would have hit bottom by now but still another 3 million filing for unemployment. What is happening here?
HORSLEY: Yeah. The pace of job cuts has been slowing down but not by much. Forecasters expected to see a sharper drop in unemployment claims last week. That figure you mentioned, almost 3 million, was down only a little bit from the week before. And the previous week's figures were actually revised upwards a little bit. So we continue to see really widespread job cuts eight full weeks after those stay-at-home orders took effect.
KELLY: As we know, filing for unemployment benefits and actually getting unemployment benefits are not the same thing. Are people still getting busy signals and all these error messages when they go onto government websites?
HORSLEY: There are certainly still challenges for people seeking benefits, but the additional money authorized by Congress is starting to find its way into people's pocketbooks. Remember, lawmakers OK'd an extra $600 a week in unemployment benefits. All 50 states started making those payments by the end of last month. But even now there are some states that have not started making payments to gig workers and the self-employed and others who were newly eligible for unemployment benefits. So there is still a ways to go here. In April, unemployment benefits replaced just a little over half the pay that unemployed workers had lost. That's a lot better than we were seeing in March. But it obviously leaves a big hole in a lot of people's household budgets.
KELLY: And what more are we learning about who is affected, what kind of jobs are being lost?
HORSLEY: The effects are really widespread. But, unfortunately, the people who've been hit hardest are the ones who can least afford it. Today, the Federal Reserve released the results of a survey they did early last month, which showed 40% of workers in households earning less than $40,000 a year lost their jobs in March. Now, Fed Chairman Jerome Powell says that's all the more jarring because before this happened, we had enjoyed many years of economic growth, and those lower wage workers had finally started to enjoy the gains of what was a really strong job market.
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JEROME POWELL: Two months ago, we were looking ahead at more of that and thinking further healing and further addressing of these issues. So it's particularly painful to see all of that put aside at least temporarily. And the numbers show clearly that it's more recent hires in lower paid people who are bearing the brunt of this. Although people are suffering all across the income spectrum.
HORSLEY: That Fed survey also shows many of the people who kept their jobs have the kind of work you can do from home. More than 40% say they're working entirely from home.
KELLY: Just a few seconds left, but give me a sense of how this is affecting families, their actual budgets.
HORSLEY: You know, it's been a blow. In addition to the people who've been laid off, a lot of people are losing hours. Last fall, the Fed did a survey and three-quarters of Americans said they were doing OK financially; by last month, less than half of the people were saying that. Even when times were good, 3 out of 10 Americans said they didn't have enough savings to get them through three months if they lost their job. So that suggests even after a decade of growth, a lot of people were ill-prepared for the calamity that hit this spring.
KELLY: NPR's Scott Horsley. Thanks, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.