(MUNCIE, Ind.) — The coronavirus pandemic has more than tripled the unemployment rate, and an Indiana economist doesn’t see it getting better any time soon.
More than a third of the nation’s 20 million job losses in April are in the leisure and hospitality industries — 5.5 million at restaurants alone. In a perverse way, that’s good news for Indiana. Indiana’s manufacturing-heavy economy usually makes it among the first and hardest-hit states in a recession. Ball State economist Michael Hicks says this time, state-level unemployment numbers will probably show Indiana close to the national jobless rate of 14.7%. It’s tourism-reliant states like Florida and Nevada, or densely populated states like New York, which are likely to feel the harshest impact.
But Hicks warns lifting lockdowns won’t do much to revive the economy — he says the numbers show a cratering of consumer demand that won’t come back until a treatment or vaccine for coronavirus convinces people it’s safe to venture out again. Until that happens, Hicks warns, the effect on the economy will rival the Great Depression.
And Hicks says the record unemployment figures probably don’t show the full picture. He estimates the true jobless rate is probably closer to 21.5%, because it takes two or three weeks for job losses to show up in the numbers.
Hicks sees a sliver of good news in the fact that 85% of the unemployed are described as temporary layoffs, indicating businesses are prepared to hire them back when they can. But he notes the
unemployment numbers also fail to count those who have stopped looking for work. That figure has grown by 7 million compared to last year. Hicks says it’s a byproduct of school closures which have forced parents to stay home to watch their kids.