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Unemployment Rates To Remain Above Average Through 2023

Posted by Pat Hanway on Feb 3, 2022 10:00:00 AM

Millions of Americans have been collecting unemployment benefits since late 2019 due to the pandemic hitting the labor force hard. At its peak, back in January 2021, unemployment claims were reaching 849,000 a week. Now, in 2022, the average number has dropped significantly to around 200,00 per week. Benefits have also been exhausted in many ways, leaving many unable to collect even if they need to.

In some ways, the drop in claims is good news and a signal that normalcy is headed our way. In other ways, it’s merely a temporary dip in a continually unpredictable landscape. Though there is obvious improvement in the labor force in the United States, experts are questioning how the rest of 2022 will play out. With COVID seemingly nowhere near over, and the lack of healthcare and benefits for millions of Americans- what is 2022 going to look like for the standard American?

Exhausted Benefits, Tired Americans

Is the dip in unemployment claims a real representation of the U.S labor force? Some would argue no. In response to the COVID-19 pandemic, the U.S Government made benefits available to many citizens who were previously not eligible. The Coronavirus Security Act provided extended insurance payments and an additional $600 a week for those affected by the pandemic. In addition, Americans received multiple stimulus checks to aid in financial difficulties. This provided a significant helping hand in the economic burden of COVID-19. Today, there is still financial aftermath from the past few years, but the option to get help is much smaller.

At this point in time, the extended benefits have been exhausted and can no longer be collected. There is less need, as the labor force seems to be returning to a relatively stable place. A large percentage of Americans have gone back to work or found themselves in a new position after the pandemic layoffs. In December 2021, there were 129 Million full-time workers, which is a big increase from December 2020 where there were 124 Million. But in general, the majority of states are experiencing unemployment rates that are higher than they were pre-pandemic. So while yes, we are seeing a dip in general, we are not where we were or where we want to be.

Unemployment in 2022

An economic discussion in a recent U.S News article noted that “the number of job openings stands at 11 million, just shy of its record, and the ratio of unemployed workers to openings was 0.6 in November, the lowest level since the government started measuring the figure back in 2000. Wages, meanwhile, rose at an annualized rate of 4.8% last month”. These figures presume positive changes for the year ahead, but experts worry the new variants of COVID could lead to another lockdown or an event that once again disrupts the United States labor and economy.

Early January saw record daily highs of 1 Million new COVID cases, according to John Hopkins University. These numbers bear concern in regards to what we thought was an improving pandemic. Last year there were unemployment plans in place for people who couldn’t go to work due to a positive covid result, but that no longer stands true. In fact, there is no coronavirus-related unemployment assistance program as of right now. Workers are forced to discuss the situation with their employer, and potentially face lost wages. For those on regular unemployment benefits, the normal amount may still be collected. However, there is no additional coverage or payment for Covid specifically.

For those who test positive or need to care for someone else who tested positive, sick leave is offered through many employers. Eligible workers can use paid sick leave to cover their days off due to COVID-19. In some cases, workers’ compensation insurance will cover COVID-19 related illnesses, but those are rare and on a case-by-case basis. These options are dependant on the specific individual’s employer and do not fall under the category of unemployment benefits.

Global Recovery

As American officials have looked to other countries and the global landscape when forming predictions on the COVID-19 pandemic, they also look to them when trying to formulate a prediction for their recovery. The United Nations’ International Labor Organization recently warned that job market recovery from the Covid-19 pandemic is expected to slow down in 2022. The press release noted an expectation for the labor market recovery to remain weak through 2023.

There are many reasons to believe these less than ideal predictions, regardless of the positive trends we are witnessing now. Of those reasons are the spread of new variants, the changes in the labor force in response to the pandemic, as well as the downsizing of many operations. Where pre-pandemic unemployment rates in 2019 were closer to 187 million, the UN predicts it to reach 207 million in 2023.

While these statistics are not ideal, they are also not a surprise. To battle the ongoing pressures in the labor force and the unwavering economic challenges, government officials need to devise a plan that helps to improve the economy and provide assistance to those facing hardships. No unemployment plan has been discussed publicly, but there is certainly room for new assistance programs for the millions of Americans still in need.

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