North America’s Unemployment Rates May Hit Record Highs

By: Jag Dhatt

No one wanted to believe the initial predictions that employment rates may decrease due to Covid-19; this wasn’t supposed to become a pandemic that would cripple most of the world. In people’s minds, the coronavirus was just something minor that would pass in a few weeks.

Last Friday, unemployment rates were released by both Canada and the USA, and the numbers do not look promising for the next few months.

For Canada, there are estimates that the average unemployment rates are about 20%, but that was only until what was reported until March 15, 2020. The rate is probably higher, and according to economists, going to increase still for at least another month or so.

But it also depends on regions and professions. For example, the area of Banff has an unemployment rate of almost 85%, a staggering number from any perspective. Economists suggest being cautious because areas like Banff are tourist areas, and thus, when a pandemic hits, these are the areas hit the hardest.

Charles St.-Arnaud, chief economist with Alberta Central states that once emergency measures are relaxed and more businesses open, people will go back to work and the numbers will become normal again; the caveat is that there is no real time-frame as to when unemployment numbers will drop, or if the potential second wave of the pandemic will cause more havoc.

In the USA, unemployment rates hit 14.7%, the highest ever seen since the Great Depression that started in 1929. Estimates are that the USA lost nearly 20.5 million jobs since the pandemic began. Again, the numbers will decrease once hotels, resorts, restaurants, and other services open.

Harvard economist Raj Chetty says that the key point is how comfortable people will be once restrictions are lowered or lifted. If people begin to feel safe, business will increase, more people will return to work and unemployment numbers will lower; but he estimates that the numbers may remain in the double digits until 2021.

The same story is felt around the world; no one country was safe, except those that took drastic measures to control the pandemic once it was first identified. They are just ahead of the game in reopening of businesses and services.

New businesses will be hit the hardest as they never had the opportunity to establish themselves. Let’s just hope that owners of new businesses who had hopes and dreams of being successful don’t lose hope and their life savings.