The economists’ most pessimistic estimate are uncomfortably close to the 8.6 million permanent unemployed seen after the Great Recession. Permanent unemployment and its cousin, long-term unemployment, are tremendous drags on an economic recovery. The longer workers are unemployed, the harder it is for them to claw their way back into the workforce.
“We know that as people spend more time unemployed, their labor market skills atrophy, their connections to the employers weaken and many start getting discouraged and ultimately leave the workforce,” said University of Chicago economist Marianne Bertrand, a leading expert on the pandemic’s labor market.
The first workers sidelined in the covid-19 crisis are now closing in on 26 weeks without work, a significant milestone after which the Labor Department considers them long-term unemployed. The ranks of the long-term unemployed could swell from 1.5 million now to between 4.0 million and 5.8 million by early next year, according to Chodorow-Reich and Coglianese.