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As Unemployment Grows, So Grows Our Need to Invest in America’s Workers

April 16, 2020

At a Glance

The next stimulus package must fund the U.S. workforce development system, whose specialized services will be more important than ever as the economy recovers from the effects of COVID-19.

As someone involved in workforce policy for more than 35 years, I have witnessed several economic downturns and their destructive impact on American employers and workers. The COVID-19 crisis is different.

The uncertainty around the coronavirus and its long-term consequences for the U.S. economy make it unique and extremely difficult to plan for because there is so much we don’t know. How long will the health and economic disruptions persist? How many more jobs will be lost? How many will come back? The one thing we do know is that millions of Americans are hurting, and we must do something about it—now and in the months to come.

In the past four weeks, about 22 million Americans have filed new claims for unemployment assistance. There were 5.2 million new claims during the week of April 11. If we keep losing jobs at this rate, it won’t take long before we see unemployment rates in double digits. Some economists have predicted the unemployment rate could climb higher than 20 percent later in the year, challenging levels experienced during the Great Depression.

One thing we do know is that millions of Americans are hurting, and we must do something about it—now and in the months to come.

While many of the jobs lost due to COVID-19 will return, many will not. The hardest hit are America’s small businesses and low-wage workers who are least prepared to weather this kind of economic storm.

The McKinsey Global Institute estimates that 86 percent of workers who lost jobs in the immediate aftermath of COVID-19 were people who earned less than $40,000 per year. These are workers with little to no savings, who cannot cover unexpected emergency expenses, and who cannot make ends meet without immediate financial help. These are also workers who tend to have less education and lack formal credentials, making it harder for them to find reemployment on their own, especially if they seek more stable careers.

In response, over the past month, Congress and the Trump administration enacted three critical stimulus packages to address the immediate health and economic consequences of COVID-19. JFF applauds the emergency health, food, and unemployment assistance provisions in these bills, as well as the essential aid for America’s small businesses and education systems.

Invest at Least $15 Billion in Workforce Development

However, these measures do not fully address the economic fallout that will follow us through the summer, into the fall, and likely longer. Even as America’s businesses begin to reopen and hopefully rehire, this disruption will leave millions of people displaced and in need of significant career navigation, reskilling, and reemployment assistance. The U.S. workforce development system specializes in these services and will be more important than ever in helping the country and its workers rebound from this crisis. However, the system is woefully under-resourced. In order to serve all of the individuals in need, the federal government must commit to investing in workforce development.

For this reason, JFF joined with 38 other national organizations as part of the Campaign to Invest in America’s Workforce, urging Congress to invest at least $15 billion in the nation’s workforce development system in any upcoming stimulus legislation.

This funding is critical to meeting the needs not only of the approximately 22 million Americans who have recently lost jobs as a result of COVID-19, but also the tens of millions of young people and adults who were unemployed, underemployed, or working in low-wage jobs before the coronavirus hit. Combined, these people make up the nation’s untapped workforce, and they can play a significant role in filling good jobs that open up as the economy reawakens—as long as they receive the right navigation, skills development, and reemployment assistance.

The U.S. workforce development system is woefully under-resourced. The federal government must commit to investing in it.

Throughout history, opportunities for education and economic advancement have not been shared equitably, and a disproportionate number of the most vulnerable workers tended to be people of color and individuals living in poverty—and that continues to be the case in this downturn. This first out, last in problem has plagued our nation for far too long and must be addressed in our nation’s workforce and economic strategies going forward to ensure that everyone shares equitably in recovery as it comes.

The workforce system can be a leader in helping America reach this goal, but it must be well-funded, nimble, and open to new, evidence-based strategies for delivering vital services so it can reach all individuals in need.

As my colleague Josh Copus recounted recently, the vast network of American Job Centers are the country’s economic emergency rooms, offering access to a wide range of services for jobseekers and workers. They, too, are experiencing the challenges of social distancing, with many “one-stop” centers forced to close their physical doors and expand virtual service offerings. The centers plan to fully reopen as soon as allowed, and when they do, they will be met with unprecedented demand for services from the millions of workers in need of help.

This crisis is different from previous economic disruptions, but one thing remains constant—the need for Congress and federal policymakers to understand the crucial role the nation’s workforce system plays in serving workers and families. A high-quality and adequately funded workforce development system is necessary to serve the millions of Americans who need it. The system will help these people navigate a highly uncertain labor market; ensure they have access to stable, in-demand employment; receive the training they need to be attractive to employers; assist U.S. businesses in finding qualified workers as they struggle to survive in the post-COVID-19 economy; and help regional economies rebound as we move into our new normal.

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