https://news.yahoo.com/grim-getting-worse-us-set-historic-unemployment-surge-015532438.html
Like a global tsunami, the coronavirus pandemic has caused a huge loss of life and taken a massive economic toll.
In the US economy, skyrocketing unemployment is the most-visible sign of the devastation: almost overnight, at least 30 million workers lost their jobs.
The April employment report, due out Friday, is expected to show the jobless rate soaring into double digits, perhaps as high as 20 percent, far surpassing the worst of the global financial crisis and reaching levels not seen since the Great Depression last century.
The US government and central bank worked at a stunning pace to rush out aid and financing to workers and businesses to try to prevent a complete economic collapse, but there is a growing fear that the temporary shutdowns imposed to contain the spread of the virus will become permanent for many companies.
The coronavirus has infected nearly 1.2 million people in the United States and killed around 70,000, according to a count from Johns Hopkins University, and analysts fear some of the economic damage may be permanent.
“We took the elevator down, but we’re going to need to take the stairs back up,” Tom Barkin, president of the Federal Reserve Bank of Richmond, said in a recent speech.
Despite nearly $3 trillion in financial aid approved by Congress in March alone and trillions more in liquidity provided by the Federal Reserve, the US economy contracted by 4.8 percent in the first three months of the year — a period that included only a couple of weeks of the strict business shutdowns.
The second quarter could see the economy plunge by twice that amount.
– The worst is yet to come –
The data on the jobs market has become so bad so fast that there are no comparisons.
Statisticians in the Labor Department’s Bureau of Labor Statistics (BLS), which produces the monthly unemployment report, are using natural disasters as a point of reference.
“The closest that we have in terms of what was in our playbook has been usually hurricanes, because they tend to be large and impact significant periods of time, or areas,” BLS Associate Commissioner Julie Hatch Maxfield told AFP.
But even devastating events, like Hurricane Katrina in 2005, were regional — not national and certainly not global.
The job losses spread from airlines and hotels to restaurants and factories as states ordered lockdowns and then closed schools, sending initial claims for unemployment insurance surging from mid-March, with 20 million posted in the four weeks of April alone.
But those figures could underestimate the true size of the shock, since many people have not been able to file for benefits, and others do not qualify.
The official unemployment rate in March jumped from a historic low of 3.5 percent to 4.4 percent, with 701,000 jobs lost.
But the monthly data, which are separate from the jobless claims reports, are calculated only during the pay period that includes the 12th day of each month, so they too missed the real picture. BLS said the survey of households likely underestimated the jobless rate, which should have been 5.4 percent.
April will be far worse, with some economists projecting jobs losses at 28 million and a 17 percent unemployment rate. And as more businesses report their data, job losses in March are expected to be revised higher as well.
Employment in the private sector alone collapsed 20.2 million last month, US payroll services firm ADP said Wednesday. But ADP acknowledges the data do not present the complete picture.
“Job losses of this scale are unprecedented. The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession,” said Ahu Yildirmaz, co-head of the ADP Research Institute.
– False rebound, slow comeback –
Job losses during the global financial crisis in 2008 and 2009 totaled 8.6 million and the unemployment rate peaked at 10 percent.
Even among workers who are still employed, many have seen their hours cut.
“It’s now clear the economy was in a downdraft much more rapidly than anyone expected,” Diane Swonk, chief economist at Grant Thornton, told AFP.
The expansive government aid programs mean the US might see a temporary pickup in hiring in May and June, Swonk said.
But if small businesses aren’t fully back to normal by July, which depends on consumers feeling safe enough to go back to restaurants and shops, “they’re going to have to lay them off again,” she said.
HENRY KOTULA 
CAMBRIDGE – Aristotle was right. Humans have never been atomized individuals, but rather social beings whose every decision affects other people. And now the COVID-19 pandemic is driving home this fundamental point: each of us is morally responsible for the infection risks we pose to others through our own behavior.
In fact, this pandemic is just one of many collective-action problems facing humankind, including climate change, catastrophic biodiversity loss, antimicrobial resistance, nuclear tensions fueled by escalating geopolitical uncertainty, and even potential threats such as a collision with an asteroid.
As the pandemic has demonstrated, however, it is not these existential dangers, but rather everyday economic activities, that reveal the collective, connected character of modern life beneath the individualist façade of rights and contracts.
Those of us in white-collar jobs who are able to work from home and swap sourdough tips are more dependent than we perhaps realized on previously invisible essential workers, such as hospital cleaners and medics, supermarket staff, parcel couriers, and telecoms technicians who maintain our connectivity.
Similarly, manufacturers of new essentials such as face masks and chemical reagents depend on imports from the other side of the world. And many people who are ill, self-isolating, or suddenly unemployed depend on the kindness of neighbors, friends, and strangers to get by.
The sudden stop to economic activity underscores a truth about the modern, interconnected economy: what affects some parts substantially affects the whole. This web of linkages is therefore a vulnerability when disrupted. But it is also a strength, because it shows once again how the division of labor makes everyone better off, exactly as Adam Smith pointed out over two centuries ago.
Today’s transformative digital technologies are dramatically increasing such social spillovers, and not only because they underpin sophisticated logistics networks and just-in-time supply chains. The very nature of the digital economy means that each of our individual choices will affect many other people.
Consider the question of data, which has become even more salient today because of the policy debate about whether digital contact-tracing apps can help the economy to emerge from lockdown faster.
This approach will be effective only if a high enough proportion of the population uses the same app and shares the data it gathers. And, as the Ada Lovelace Institute points out in a thoughtful report, that will depend on whether people regard the app as trustworthy and are sure that using it will help them. No app will be effective if people are unwilling to provide “their” data to governments rolling out the system. If I decide to withhold information about my movements and contacts, this would adversely affect everyone.
Yet, while much information certainly should remain private, data about individuals is only rarely “personal,” in the sense that it is only about them. Indeed, very little data with useful information content concerns a single individual; it is the context – whether population data, location, or the activities of others – that gives it value.
Most commentators recognize that privacy and trust must be balanced with the need to fill the huge gaps in our knowledge about COVID-19. But the balance is tipping toward the latter. In the current circumstances, the collective goal outweighs individual preferences.
But the current emergency is only an acute symptom of increasing interdependence. Underlying it is the steady shift from an economy in which the classical assumptions of diminishing or constant returns to scale hold true to one in which there are increasing returns to scale almost everywhere.
In the conventional framework, adding a unit of input (capital and labor) produces a smaller or (at best) the same increment to output. For an economy based on agriculture and manufacturing, this was a reasonable assumption.
But much of today’s economy is characterized by increasing returns, with bigger firms doing ever better. The network effects that drive the growth of digital platforms are one example of this. And because most sectors of the economy have high upfront costs, bigger producers face lower unit costs.
One important source of increasing returns is the extensive experience-based know-how needed in high-value activities such as software design, architecture, and advanced manufacturing. Such returns not only favor incumbents, but also mean that choices by individual producers and consumers have spillover effects on others.
The pervasiveness of increasing returns to scale, and spillovers more generally, has been surprisingly slow to influence policy choices, even though economists have been focusing on the phenomenon for many years now. The COVID-19 pandemic may make it harder to ignore.
Just as a spider’s web crumples when a few strands are broken, so the pandemic has highlighted the risks arising from our economic interdependence. And now California and Georgia, Germany and Italy, and China and the United States need each other to recover and rebuild. No one should waste time yearning for an unsustainable fantasy.