A new report looks at the rates and the most impacted industries and draws comparisons between the coronavirus pandemic and the recession of 2008-09.
Unemployment rates have reached historic heights in the last few months due to the coronavirus pandemic—for every one person who filed for unemployment claims during the first month of the 2008 recession, almost seven people filed for unemployment in March, according to a report by Eligibility, which helps people find the right government programs.
Eligibility also broke down the unemployment rates by industry to see which industries are seeing the biggest losses due to COVID-19. Not surprisingly, leisure and hospitality and wholesale and retail are among the industries that have seen the greatest losses in the “Great Lockdown.” Other affected industries are business and professional services, education, and healthcare, the Eligibility report said.
This is the second time the US is facing a recession in relatively recent times. The country also faced massive joblessness during the recession of 2008-09. The organization looked at unemployment claims for the first month of both to create a ratio between the two time periods.
“The Great Recession in 2008-2009 saw similar industries taking the largest losses, with the top three including leisure and hospitality, manufacturing, and professional and business services,” the report said.
While job losses in the past few months have been significantly higher than the recession of 2008-09, both recessions show similar patterns, the report said. Other findings:
· The first week of the Great Recession of 2008-09 saw 371,000 unemployment claims, compared to 211,000 during the first week of the coronavirus lockdown, according to the report.
· By week three of the coronavirus lockdown, however, there were more than 3.3 million unemployment claims—eight times the 402,000 filed during the Great Recession.
· In week four of March 2020, unemployment claims more than doubled, to nearly 6.9 million.
· During the Great Recession, the hardest-hit industries were wholesale and retail (16% unemployed), leisure and hospitality (14%), manufacturing (11%), and professional and business services (10%).
· Similarly, the hardest-hit industries in March 2020 were leisure and hospitality (16%), wholesale and retail (14%), business and professional services (12%), and education and healthcare (11%).
· During both recessions, jobs in the information (including publishing, broadcast, telecommunications, motion pictures), mining, and agriculture sectors were the least affected.
“Although there are similarities around which industries see the most unemployment, there are some key differences that could affect the overall unemployment numbers,” the Eligibility report said. For example, “during the Great Recession, unemployment was driven mainly by the market, and numbers rose slowly.”
However, the current recession is driven by both market forces and stay-at-home orders from the government, resulting in millions of layoffs all at once, the report noted. New rules that allow more workers—especially the self-employed and gig workers—to receive unemployment benefits also could be at least partially responsible for the spike in claims during the coronavirus lockdown, the report noted.
But COVID-19 presents unique challenges due to widespread stay-at-home orders, which are a new experience for many people. “Fortunately, the federal government has responded by increasing access to unemployment benefits and supporting businesses that are trying to keep their workers on the payroll,” the report said.
The report makes no predictions about how long this economic downturn will last. “But knowing that American industries have faced high unemployment rates before gives us a reason to hope for a full recovery this time too.”
In the meantime, people can stay up to date on the latest COVID-19 unemployment regulations.