Close To Half Of All Working Age Adults In The United States Do Not Have A Job Right Now
There is a lot of talk about the “unemployment rate” these days, but the way that it is calculated has become so convoluted that it is not really that meaningful anymore. Even during the so-called “good times”, more than 100 million U.S. adults were not working, but we were told that the unemployment rate was the lowest that it had been in decades. Of course now everything has changed. Since this pandemic began, more than 47 million Americans have filed new claims for unemployment benefits, and the mainstream media is going to make sure that fear of COVID-19 continues to paralyze our society for the foreseeable future.
In this article, I would like to discuss the employment-population ratio. According to Wikipedia, the employment-population ratio is “a statistical ratio that measures the proportion of the country’s working age population that is employed”. I believe that it is a far more accurate measurement than the “unemployment rate” is, and we have seen this ratio move quite dramatically over the past couple of months. According to CNBC, the employment-population ratio hit 52.8 percent in May, and that means that 47.2 percent of all working age Americans did not have a job…
Nearly half of the population is still out of a job showing just how far the U.S. labor market has to heal in the wake of the coronavirus.
The employment-population ratio — the number of employed people as a percentage of the U.S. adult population — plunged to 52.8% in May, meaning 47.2% of Americans are jobless, according to Bureau of Labor Statistics. As the coronavirus-induced shutdowns tore through the labor market, the share of population employed dropped sharply from a recent high of 61.2% in January, farther away from a post-war record of 64.7% in 2000.
As you can see on this chart, we are definitely in unchartered territory.
We have never seen a collapse of this magnitude in all of U.S. history, and it has been truly horrifying to watch so many people lose their jobs.
It would be difficult to overstate just how far we have fallen. One analyst has pointed out that it would take 30 million new jobs for the employment-population ratio to return to the peak that we witnessed all the way back in 2000…
“To get the employment-to-population ratio back to where it was at its peak in 2000 we need to create 30 million jobs,” Torsten Slok, Deutsche Bank’s chief economist, said in an email.
Of course before we can start adding jobs we have got to stop the bleeding first, and at this point more than a million Americans continue to file new claims for unemployment benefits each and every week.
And more job losses are coming, because companies are shutting down at a staggering rate. In fact, this week USA Today warned that “experts believe this is just the beginning of a bankruptcy tsunami that will wash over the country’s largest companies this summer”…
Twelve midsize to large corporations – all with more than $10 million in debt – filed for Chapter 11 bankruptcy protection during the third week of June, another consequence of the coronavirus pandemic and continued trouble in America’s oil industry.
The filings represent the highest weekly total of the year, and experts believe this is just the beginning of a bankruptcy tsunami that will wash over the country’s largest companies this summer and then drench both smaller businesses and individuals if government stimulus money dries up.
Those two paragraphs almost sound like something that I could have written.
But at this point it is very difficult for anyone to deny how bad things have become. So many firms are suddenly going bankrupt that it is impossible to keep up with them all, and the energy industry is being hit particularly hard…
At least 24 oil and gas companies filed from April through June – nearly twice as many as during the first three months of the year, according to Haynes and Boone LLP, an international law firm based in Texas. Four of those companies – Texas-based NorthEast Gas Generation, Colorado-based Extraction Oil & Gas, and Chisolm Oil and Gas and Chesapeake Energy, which are both from Oklahoma – filed in the last two weeks of June.
“This trend should continue through the remainder of 2020 and into 2021,” said Charles Beckham, a partner in Haynes and Boone’s restructuring practice.
Of course it isn’t just the U.S. that is experiencing severe economic pain.