How bad was the job loss in the United States depends on your starting and ending points. If we take March 2020 as the last “normal” or pre-COVID month, with August as our latest data point, then national job losses just exceeded ten million.
Yet, just three states (California, New York, and Texas) account for one third of that ten million. Indiana is among the 38 states in the bottom third of that distribution. Indiana accounted for 91,100 (2.9%) of that 10 million job loss.
While 10 million jobs nationally were a 6.6% drop in wage and salary jobs from March, Indiana’s 91,100 loss was only 2.9% of our March jobs. That’s the basis for the Hoosier Happy Hour at the Statehouse: Indiana ranked 47th behind Hawaii in percent of jobs lost due to the virus. Only Utah, Mississippi and Idaho were more fortunate than we.
Manufacturing led all sectors in that 91,100 Hoosier jobs decline with 26,800, 5.1% of the March level. That was about the experience in Kentucky (5.9%), Ohio (5.4%), and Wisconsin (5.0%). In contrast, Michigan lost 9.1% of its manufacturing jobs with Illinois down only 2.7%.
The sector that led the downward slide in Illinois, Michigan, Ohio and Wisconsin was Leisure and Hospitality, which was nearly a third of all job losses in each of those states. In Kentucky, jobs providing Professional and Business Services were the biggest loser with a 27,000 loss, a 12.3% decline, more than a quarter of all job losses.
These data confirm a serious economic dislocation as a result of the COVID pandemic. They complement the official unemployment numbers which show 214,000 unemployed Hoosiers in August.
The number of unemployed rose from 100,000 persons in March. Thus, the unemployment associated with the virus was 114,000. This is a reasonable number to go with the 91,100 jobs lost. More people look for jobs when another member of the household becomes unemployed or must accept reduced income.
Note: No one was concerned about 100,000 unemployed Hoosiers in March when the unemployment rate for Indiana was 3.0%. It was high-fives all around. That’s an issue for another column.
The true crisis is not limited to the unemployed without a steady income flow. It involves all those working for greatly reduced incomes. These are not only employees let go, but those who remain, along with small business proprietors in firms where discretionary spending is vital: restaurants, home improvements, travel services, elective medical procedures, movies, and a host of other spending options.
When the money is not flowing through these severely impacted sectors, it reduces the flow to other more vital sectors. With reduced income, utility bills, rents, charitable contributions, and tax revenues are all negatively affected.
This virus is teaching us how necessary the unnecessary is to our economy.