Not since 1949 during the postwar recession have so many workers dropped out of the labor force as they have in 2020/21 during the Covid pandemic. It’s interesting to look at the numbers alongside other dramatic events in the economic life of the US economy.
The highest unemployment in our history was 25% at the height of the Great Depression (1933). As factories retooled and produced goods in 1941 to support the European war, only 10% of workers were idle. In the ensuing years of our participation in World War II, the massive numbers of American men and women working on the war effort reduced unemployment to between 1-2% for three years, and as low (1944) as 1.2%!
Although inching higher, unemployment numbers generally stayed out of the news until the ’70s when they quietly began to rise. In 1974, after OPEC demanded higher oil prices (the minimum wage was $2.00) unemployment jumped to 7.2%.
The ’80s saw the recession-inspired unemployment rate of 10.8% decline after President Ronald Reagan signed the Garn-St Germain Depository Institutions Act of 1982 (a mouthful for the Act of Congress that deregulated savings and loan associations and allowed banks to offer adjustable-rate mortgage loans). This decade will be remembered for October 1987’s Black Monday when the Dow dropped 508 points, and millions lost their jobs.
During the ’90s with Desert Storm, welfare reform, and NAFTA the U.S. created 23,672,000 jobs, and hourly wages increased 10%. Unemployment rates sandwiched between a low of 4% and high of 7.4% and the economy grew — but so did interest rates.
The year 2000 saw the NASDAQ reach record highs, but then the World Trade Center was attacked in 2001. The War on Terror raised unemployment and the 2008 minimum wage was raised to $6.55, and a year later to $7.25. The 2010 Republican tax cuts did little to curb unemployment until Trump won the Presidency in 2016 and the economy rebounded.
in 2019 COVID reared its ugly head worldwide. In the US, employers were forced to let workers go as government-enforced emergency rules dictated which businesses could remain open and which must close — rules were imposed at both Federal and State levels to reduce transmission of the worldwide pandemic. Even though the unemployment rate in 2021 hovers around 6%, 2020 will be remembered by most as “the year that wasn’t.”
We Americans are a resilient people. The Congressional Budget Office projects an economic expansion to return to pre-2020 levels and perhaps surpass expectations.
See the CBO Overlook 2021 to 2031.
The Ohio Chamber of Commerce is optimistic, and projects that housing will lead the way.
We are watching the unemployment numbers and other economic news, especially for Cincinnati and surrounds and are well prepared to serve those small businesses bravely leading the charge to prosperity. Call us at (513) 322-1036 or email email@example.com