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Job

COVID-19: Unemployment Is Skyrocketing Like Never Before

The uncertainty faced by the world during COVID 19 is not new. The outbreak due to the virus has resulted in the increase of unemployment rate. It is tangled in the ugly swirl which is leading to an unimaginable economic slowdown. With the companies shutting down and the retrenchment going on a large scale, the highest unemployment rate in the world can be witnessed in the year 2020.

The rise in the values of the essential goods linked with the fall in the employment rate has hit badly to all the economies around the world. For over the last decade, COVID 19 has proven to be the most vicious pandemics that has created a havoc worldwide.

With the widespread uncertainties about the spread of disease and medicine discovery, the risk of an increase in the natural rate of employment is also high. On the one hand, where the fight to stay in the job and business is booming, inflation and unemployment are soaring high.

The Enormous Unemployment Outbreak – A COVID Consequence

The rise in the natural unemployment during COVID-19 is relatively more significant than the rate during the Great Recession in 2009. The figure of unemployed people rose by 8.8 million from 2007 to the beginning of 2010. As per the Pew Research Center analysis of government data, the Great Recession that lasted from December 2007 to June 2009, the unemployment rate peaked 10.6% during January 2010.

Compared to the same, the USA’s unemployment rate is at 11.1% as of June 2020 as per the data published by the Bureau of Labor Statistics. Although there is an improvement compared to the unemployment rate of April, which was 14.7%. After all this, the figure is soaring high, and the damage it has made to the economy is really daunting.

With the unemployment crisis reaching its worst scenario, the natural unemployment rate is between 4.1 to 4.5 percent, as per the US Federal Reserve Economist analysis. As per the expected rate of 4 percent in June, the rate is still high, and the policies adopted are pointing towards a long-lasting impact.

With the highest record ever witnessed in the last 90 years, April 2020, the outbreak of COVID19 is one of the worst phases with 14.7% of unemployment rate. Additionally, the number of Americans who have filed for the unemployment benefits for the period between April to July is four times more than one witnessed in history. The data issued by the Labour Department of the USA reflects 2.3 million new claimants registering in the sixteen weeks of COVID 19.

Job Losses- A concern

The on-going, as well as the new startups, are facing the issue of layoffs. With the ever-increasing struggle to keep pace with the changing trends and adverse health situations, inflation and unemployment are rising. The recent job losses that the world is facing are far more concerning than the earlier recession figures.

As the USA government allowed the companies to fire the employees, the natural rate of unemployment rose too. Although the companies decided to assist the employees with the traditional unemployment benefits with particular grants, the lifestyle and way of living has degraded.

Some Facts to Consider

Unemployment is really not a new problem that the world is facing. With the boom in the population, the number of people searching for jobs has also risen and that is an issue. The skill gap, pay expectation, personal constraints, change in demand, and technological up-gradation are some of the reasons that give rise to unemployment.

Some of the crucial facts that the PEW Research Center USA displayed concerning the COVID 19 and the unemployment are:

  • The 14.7% unemployment in April 2020 is the 90 year high witnessed by the USA.
  • The unemployment rate of women in May was 14.3%, that was slightly higher than men, which were 11.9%.
  • Compared to other women in the COVID 19 downturn, the unemployment rate faced by Hispanic women is much steeper. It is 19.5% compared to 11.9% in May.
  • The unemployment rate for immigrants is 15.7% against 12.4% for locals.
  • The outbreak is fatal for the young aspirants who witnessed large scale unemployment of 25.3% in May.
  • The lower class labor has witnessed an 18.5% unemployment rate compared to 7.2% for the skilled in May.

Due to the mixed responses, the natural rate of unemployment is rising, which has taken the world economy to depression to some extent.

To Wind Up

Unemployment is not an easy nut. It is vast and widespread. The International Labor Organization (ILO) estimates that more than 25 million jobs are threatened at the world level due to the spread of novel coronavirus. The rise in inflation and unemployment have a disastrous impact on life and economies of both the developed and the developing economies.

With the government’s pressure to curb the rising unemployment and take measures to bring back the economies to track, the need to reduce natural unemployment is a must. With the generation of new opportunities and upskilling the existing skill-set, the chances to fulfill the target of better employment, even in COVID 19 is possible.