Layoffs thought to be temporary are now permanent for nearly 4 million Americans

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When the initial wave of layoffs due to the coronavirus hit the U.S. economy in April and subsequent lockdowns, many people thought these losses would be temporary phenomenon that would quickly rebound as businesses reopened.

However, the new employment data seems to suggest that these “temporary” job losses have turned permanent for millions of Americans.

Nearly 13 million remain unemployed, which is about 7 million more workers than before the pandemic, CNBC reported.

The coronavirus-induced recession has hit lower-wage workers and minorities harder than other groups.

“The impacts [this] will have on the community are tremendous,” said Behnaz Mansouri, a senior attorney with the Unemployment Law Project.

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At the height of the unemployment crisis few months ago, 4 in 5 workers, representing more than 18 million workers, were on temporary layoff and expected to be recalled.

That number has since fallen to about 4.6 million, or about 37% of the unemployed, as of September — still higher than any period since the 1960s.

At the same time, “permanent” job loss has been increasing. The number of permanent job losses grew by 345,000 to 3.8 million last month, according to the Bureau of Labor Statistics.

This suggests some layoffs once thought temporary have instead become permanent, economists said.

“We’re still at a high level of layoffs in the economy,” said Susan Houseman, VP and research director at the W.E. Upjohn Institute for Employment Research. “The new job losses will, by and large, be perceived as permanent.”

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Long-term unemployment, a period exceeding six months, has increased substantially as this job loss has taken root.

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In September alone, 2.4 million Americans were unemployed for 27 weeks or more — up 781,000 from prior month, according to data by the Bureau of Labor Statistics. These long-term unemployment can have devastating effects.

“The longer you are out [of a job], the more damage it can do,” Heidi Shierholz, director of policy at the Economic Policy Institute, told CNBC.

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