SOUTHWEST VIRGINIA – The new U.S. unemployment numbers show the uncertain economic times the country is facing due to the cornavirus.
There were 20.5 million jobs lost in the U.S. in April alone and the unemployment rate spiked to 14.7 percent, which is the highest it’s been since the Great Depression when it hit 24.9 percent.
Roanoke College’s John S. Shannon Professor of Economics Dr. Alice Kassens said the situation is not as bad as people might think.
“It’s a hard number to swallow," said Kassens. "It was slightly lower, the unemployment rate, than what some experts predicted.”
Virginia Tech Professor of Practice in Finance Derek Klock said the outlook could be worse if you include the underemployed, those who haven’t been able to file for unemployment and how the U.S. Bureau of Labor Statistics gathered the data. The unemployment rate would be five percent higher, closer to 20 percent, if it counted workers who aren’t currently job-hunting and are waiting for their jobs to become available again once the pandemic is over.
“At this point, most people just know it’s bad and it’s going to remain bad,” said Klock. "Employers are starting to think this is going to be a little longer road than they had initially thought.”
Kassens added that it’s difficult to compare to the current situation to the Great Depression. Unlike back then, the nation now has economic safety nets like unemployment insurance or Medicaid.
“I suspect our economy will rebound much faster than it usually does in a recession because the fundamentals are there,” said Kassens.
How the country can bounce back is another story. That depends on when things open back up, how cautious companies are to bring back employees they laid off, and if consumers will be afraid to get out and spend money.
Klock and Kassens agreed recovering from this recession won’t take a decade, but it will depend on the reopening and any future COVID-19 outbreaks. Though they said rural parts of Virginia may fare better.
“The timeline is really in the virus’ hands,” Kassens said.
Virginia’s unemployment numbers haven’t come out yet, however, they are usually 1 to 2% less than the national average.