U.S economy gains 1.8 million jobs as labor market recovery flags
Bureau of Labor Statistics’ monthly report released on Friday August 7, 2020, has shown that in July last month, the U.S. economy added 1.76 million jobs from down from 4.8 million jobs added in June.
With the figures that temporarily shows beyond-expectation decline in unemployment rate now at 10.2 percent from the previous 11.1 percent, economists are beginning to nurse fears that labor market recovery is getting weaker as the pandemic ceaselessly gnaw at the country’s economy.
Speaking about the precarious economic crisis, Daniel Zhao, a Glassdoor’s senior economist said, “We are seeing evidence that the economic recovery is losing steam. It’s not reversing, but it looks like growth is flattening out.”
“It seems like the recovery has slowed down and appears to be getting stuck in the doldrums,” added Daniel.
Another fear that have tenaciously grasped the country is the growing numbers of millions of Americans being laid off their jobs and many more who still remain out of jobs. Many feared the situation could become permanent.
Casey Mason, an event manager at a Wilmington’s yacht club who was hired in March but got laid off shortly after narrated her experience.
“I started only to be shut down and then be laid off twice,” she said.
Mason further said that she at the moment had only two weeks off her unemployment. She said she wasn’t willing to get a job elsewhere because her wages at the club were more than what she could earn somewhere else.
“Regular minimum wage is $2.13 for servers,” she said. “When I came to college here and started bartending, the pay was $2.13 an hour. And that was 30 years ago.
“So unless you have customers, you can’t live,” Mason said.
Similarly, about 57 percent of people in California who filed for unemployment since the onset of the pandemic has either again lost their jobs or have their work hours axed, according California Policy Lab’s analysis.
According to Till von Wachter, an economics professor at the University of California, Los Angeles, a co-writer of the analysis, leisure and hospitality, retail and health care and social services have been the hardest-hit sections by the second waves of layoffs.
“That also tells us about who’s being affected by these repeated layoffs,” Wachter said
“These sectors predominantly hire women, younger workers, lower educated workers, Hispanic and Black workers. Many of these workers have very low earnings and very low benefits,” he added.
“We broke it out by race and it’s clear that those expectations are always lower for Blacks.
“They either don’t expect to be recalled or they work for businesses that are less likely to be reopened or that are generally less likely to recall workers,” said Wachter, speaking about a resultant financial crisis awaiting those whose chance of being recalled looks slim especially with the $600 weekly unemployment benefits expiring soon.
“We broke it out by race and it’s clear that those expectations are always lower for Blacks. They either don’t expect to be recalled or they work for businesses that are less likely to be reopened or that are generally less likely to recall workers,” said Wachter.
Another fear that the economy faces is drying up aid to small businesses.
Expressing a concern about the condition, Eric Groves, the CEO of Alignable, a small tech firm, said, “We found about 12 percent of businesses that had been closed and reopened had been asked to reclose. It’s not a small number,” he said.
He also expressed fear that the situation might get worse for small businesses as aid fund gradually ceases especially Paycheck Protection Program and others.
“In late June, we found that the number of people who reported they were going to be out of cash within a month was going to be close to 50 percent,” said Eric.
“Among the ones who didn’t receive PPP funds, it was closer to 69 percent,” he added.