A new report from Ball State University indicates mass layoffs and social distancing will cause unemployment to top 10.5% nationally and 10% in Indiana within 45 days. The report suggests within 90 days, the recession will cause unemployment to rise to 14.5% in Indiana.
“These are likely very conservative estimates, yet it argues that job losses in March, April, May, and June may be the four largest in U.S. history, topping the 1.9 million jobs lost in the weeks following V-J Day in September 1945,” said Center for Business and Economic Research director Michael Hicks. “This level of job losses does not consider the effect of school closures on labor supply by households. This study does not assess the impact of supply chain disruptions on manufacturing, nor does it include the extreme shock to household wealth caused by stock market declines.”
The analysis finds the 45-day social distancing will reduce GDP down .5 nationally and .4 in Indiana, which could push job loss numbers to nearly 121,000 in Indiana and over 10.5 in the U.S. The authors found in their analysis that 90 days of social distancing could cause 241,000 Indiana workers to be unemployed and 21 million nationally.
“Moreover, this estimate extends only 90 days and does not include much broader impacts of longer social distancing,” he said. “We urgently need state policies to speed resources to displaced workers, and we need policies such as workshare and relief from job search, job tenure, and earnings requirements.”
The full report can be found here.