Update On Employment And Virus Outcomes, US vs. Other Rich OECD Countries
Yesterday I published a brief for Brookings (see below) that summarizes how the US has performed during the current pandemic, both in terms of virus caseloads/deaths and also unemployment:
The brief is an update of another that I published in early June.
The results are not encouraging. Virus caseloads and deaths in the US overall since January have averaged 19.11 and .57 per thousand Americans, whereas similar numbers for the average other OECD rich country are 4. 11 and .23 per thousand respectively. Even more discouraging, new cases and deaths (in the past 7 days, measured as of September 9) are .08 per thousand and 1.34 per million respectively, while in the other countries they are .05 per thousand and .26 per million. We do vastly worse than almost every other country on each measure.
And our unemployment numbers have been worse as well. Unemployment in the US rose by about 11 percentage points last spring and peaked in April at almost 15 percent; by July, our rate had fallen to just over 10 percent, still leaving it 6.6 points higher than in January. In contrast, the other OECD countries averaged an increase of just 1.22 percentage points in their unemployment rates. (In August, our unemployment rate by almost another 2 points, to 8.4 percent, but comparable numbers are not yet available for most other countries.)
Why have our unemployment rates risen by so much more than other countries, even after recovering somewhat since the spring? I believe there are two reasons. First, other countries relied much more heavily on supporting employer payrolls when workers are not working, keeping their measured unemployment down. We did some of that in the US, through our Payroll Protection Program, but its use was never very widespread and it has now expired. Second, other countries have been more successful at suppressing the virus and keeping it low, whereas cases in the US began surging again in June as we pulled back too quickly from restrictions on our social activities. So our recovery in the labor market flattened out somewhat, while other countries have experienced more ongoing relief. Indeed, our bad virus outcomes likely drive weakening recovery in unemployment since June.
Our experience during the pandemic as measured by GDP has not been nearly as bad (relative to other countries), but high unemployment right now is very concerning – more layoffs are becoming permanent, and support for unemployed workers (in the form of enhanced Unemployment Insurance benefits) has decreased.
The US needs stronger recovery on both its health and employment dimensions. We’ve had some recovery on each, but there is still a long way to go.