UNIDENTIFIED PERSON, BYLINE: NPR.
(SOUNDBITE OF MUSIC)
CARDIFF GARCIA, HOST:
Hey, everyone. It's Cardiff. And before we start today's show, I want to ask for a favor. If you can go to npr.org/podcastsurvey, there you're going to find a survey where you can tell us how often you're listening to THE INDICATOR, what you like about it and, just in general, how you are using podcasts. It's short. It's anonymous. It really does help the show. And I'm not even asking for money. It's free. It's a free way to help the show, and we'd really appreciate it. Thanks so much. And now on with today's show.
(SOUNDBITE OF MUSIC)
GARCIA: Hey, everyone. Stacey and Cardiff here. This is THE INDICATOR FROM PLANET MONEY. And today is Jobs Friday, but we are holding the air horn until a future Jobs Friday when we have something to celebrate because today's report is not that.
STACEY VANEK SMITH, HOST:
It is definitely not that. The jobs report for the month of April was released this morning by the Bureau of Labor Statistics, the BLS. It is the first jobs report that begins - just begins - to capture the scale of the devastation in the U.S. labor market.
GARCIA: According to the report, 20 1/2 million jobs were lost in April. It means that in just the last couple of months, the economy has wiped out nearly all of the jobs gained in the entire last decade.
VANEK SMITH: And the unemployment rate also is just shocking. Last month, it was 14.7%. That is the highest unemployment rate since the Great Depression. I mean, just in February, just a few months ago, the unemployment rate was at 3.5%, which was the lowest in half a century, and now it's at 14.7%.
GARCIA: By the way, almost unbelievably, this jobs report still understates how bad things are. The data for this report were collected three weeks ago, and we know that things have only gotten worse since then.
VANEK SMITH: If you do want, like, the tiniest silver lining, there is one, and it might be that almost 4 out of 5 people who are unemployed are in the category of temporary unemployment. They expect to return to their jobs once the pandemic is over. But of course, the longer they are unemployed, the more likely it is that the temporary unemployment becomes permanent unemployment because the longer these businesses are closed and not bringing in any money, the more likely it is that they won't be able to reopen, and their workers will be left without jobs.
GARCIA: But beyond those big headline numbers that we just talked about, there's a lot more that we can learn from this report. It's a hugely detailed report, and there's important stuff in those details. So to help guide us through it, we've assembled a crack team of three economists. They've all been on the show before. They're kind of like our go-to ninja squad but for labor market data.
MARTHA GIMBEL: My name is Martha Gimbel. I'm the manager of economic research at schmidtfutures.com.
OLUGBENGA AJILORE: My name is Benga Ajilore (ph), and I'm a senior economist at the Center for American Progress.
NICK BUNKER: I'm Nick Bunker, and I'm the economic research director for North America at the Indeed Hiring Lab.
VANEK SMITH: Martha, Benga and Nick each looked over the jobs report and let us know, like, one big thing that they think matters in the report and sheds a little more light on what is happening right now to the labor market. First up, Martha Gimbel of Schmidt Futures.
GIMBEL: The measure that I wanted to discuss was the diffusion index. It's not an index that we usually pay that much attention to. It measures how widespread job losses or gains are.
GARCIA: The diffusion index - so the index goes from zero to 100, and the closer it gets to zero, the more industries are losing jobs. In other words, as the diffusion index approaches zero, the more widespread, or diffuse, are the job losses across the economy. And...
GIMBEL: In April, it reached 4.8.
GARCIA: In February, the index was still above 50. Now it's at 4.8.
GIMBEL: And that reflects that in this environment, almost no industries are able to add jobs right now.
GARCIA: One big exception to this trend, an industry that did add jobs in April, was general merchandise stores. So these are stores like Costco or Walmart, which sell basic household goods alongside groceries - so basically, the stuff that people are stocking up on to stay at home. The only other industries adding jobs - the Federal Reserve, the federal government, computer and peripheral equipment, couriers and messengers, the Postal Service and other information services.
VANEK SMITH: And that's it. Those are the bright spots. Out of 258 total industries included in the diffusion index, those seven are the only ones that added jobs last month.
GIMBEL: And so the fact that we were only able to add jobs in so few of them really speaks to how widespread this economic nightmare has become.
VANEK SMITH: After a quick break, we'll hear from Benga Ajilore and Nick Bunker about two more indicators they noticed in the jobs report.
(SOUNDBITE OF MUSIC)
GARCIA: Benga Ajilore is a senior economist at the Center for American Progress, and the indicator from the jobs report that he chose to highlight is the ratio of the unemployment rate for black workers to the unemployment rate for white workers. Now, historically, before the pandemic, in both good times and bad, that ratio has been hovering at about 2 to 1. So black workers have been about twice as likely to be unemployed as white workers.
AJILORE: The reason this matters is that this gap should not exist, but it has been consistently and persistently large for over 50 years, showing the structural barriers in the labor market that create these unequal outcomes - mass incarceration, employment discrimination and occupational segregation, where people are steered into lower-paying occupations.
VANEK SMITH: And here is what happened to this indicator in April.
AJILORE: The black unemployment rate is 16.7% and the white unemployment rate is 14.2%, meaning that the black rate is 1.2 times the white rate.
GARCIA: This is interesting because it means that the black-white unemployment ratio actually shrank in April. In normal times, before the pandemic, that might have been good news. It might have reflected a shift towards equality. Benga says that is probably not what is happening now. He says the reason the unemployment rate for black workers did not go up by more than it did is probably because black workers are more likely than white workers to be in jobs considered essential.
AJILORE: These jobs have low earnings and elevated risks of contracting the virus. Black workers are in these jobs because of the structural barriers like occupational segregation and may end up suffering the most harm from this pandemic.
VANEK SMITH: It's so interesting that essential jobs are low-earning jobs.
GARCIA: I agree.
VANEK SMITH: It's a strange...
GARCIA: Yeah. One of the sort of tragic realizations of this crisis. Yeah.
VANEK SMITH: Yeah. And there already is, actually, evidence to support Benga's argument. According to estimates from the Brookings Institution, black workers are more likely to be essential workers in the kinds of jobs that cannot be done from home. And in cities like New York and Chicago, African Americans are dying from coronavirus at much higher rates than the overall population.
GARCIA: And finally, our third contribution comes from Nick Bunker of the Indeed Hiring Lab.
BUNKER: What I want to highlight from today's jobs report is the employment to population ratio for people ages 25 to 54, my favorite measure of the health and labor market.
VANEK SMITH: This indicator is also called the prime age employment to population ratio. Basically, you take all the people in the country in their prime working years - that's age 25 to 54 - and you look at what share of that section of the population has a job. And we just learned that, in April, that share collapsed from almost 80% percent - like, 80% of 25-to-54-year-olds had a job down - to 69.7%.
BUNKER: The drop in April is more than twice the total drop we saw during the last recession and its aftermath. That's the drop in one month. The Great Recession lasted 18 months.
VANEK SMITH: So the reason to focus on this number instead of on the overall unemployment rate is that the unemployment rate only takes into account people who are both not working and also say they are actively looking for a job. But in April, a lot of people who lost their jobs did not respond that they were now actively looking for work. Maybe they're discouraged from looking for work. Maybe they're waiting out the pandemic until it's safer. Or they're staying home now to care for kids or elderly parents or relatives.
GARCIA: Yeah. The point is, these people who are losing their jobs are not being captured by that unemployment rate, but they are captured by Nick's indicator.
BUNKER: Keeping an eye on the prime age employment to population ratio would be one of the best ways to total the damage.
GARCIA: So that's it. Honestly, it was just a tough jobs report that came out this morning and a jobs report that actually still does not even fully reflect just how bad things have gotten. What the report does reflect is that almost no part of the economy has been spared. And remember - this recession, it started as a health crisis, and it was always obvious that it would have big, damaging effects.
But it was also hoped that those effects would be specific to the businesses that were directly threatened by the virus, like restaurants and theaters and other businesses that required crowds or a lot of person-to-person interaction. What the report shows is that the effects are actually quite general now. They're everywhere. The economic damage has spread like a virus.
(SOUNDBITE OF MUSIC)
VANEK SMITH: This episode of THE INDICATOR was produced by Darius Rafieyan and fact-checked by Brittany Cronin. THE INDICATOR's editor is Paddy Hirsch. And THE INDICATOR is a production of NPR.
(SOUNDBITE OF MUSIC)
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.