Although the unemployment rate fell modestly and the number of those employed rose slightly — notably in the leisure and hospitality sector — the June employment numbers from the Bureau of Labor Statistics again missed expectations.
Unemployment remains well above its level prior to February 2020, when COVID-19 restrictions began.
Here’s a money quote from the BLS report:
A goodly chunk of the population is simply not working. Here’s a graph from Calculated Risk:
Those drops at the far right side are unprecedented. Unlike the Coyote running off a cliff holding an anvil while the Roadrunner meep-meeps from safety, employment has not bounced back from the impact of COVID-19 restrictions.
A number of factors may be enabling or encouraging prime-age workers to continue to sit at home:
- overly generous government unemployment benefits that make taking government money more sensible financially than working for low wages;
- non-traditional living arrangements (younger workers moving back home with parents, for instance);
- “side hustles” bringing in money but not being reported.
Some of these workers may not be idle but they aren’t showing in the employment numbers. For instance, they may be volunteering, hence working without pay.
Whatever the underlying reasons, workers need to return to productive and gainful employment to prevent a worse economic crash. Government needs to stop being “helpful” and just get out of the way.