After a rugged and seemingly endless 2020, we are beginning to see the light at the end of the COVID-19 tunnel. We are not done yet, but with vaccination programs ongoing and the disease and effective treatments better understood, we should be able to establish a new normal at some point in 2021. There are myriad challenges, but the path is beginning to emerge.
One key issue for 2021 is the millions who are unemployed. While employment has rebounded substantially from the bottom in April 2020, a full recovery to pre-pandemic levels will take a couple of years. As expected, the pace of recovery slowed through the fall following large early gains as businesses reopened in the summer. The recent surge in cases has further stymied the comeback.
U.S. unemployment levels decreased to 6.7% in November from the high of 14.7% in April but remain well above the 3.6% rate where we started 2020. About 10.7 million people are officially jobless, including 3.9 million without work for 27 weeks or more. About 6.7 million people were working part-time for economic reasons and would have preferred full-time jobs. Yet another 7.1 million wanted to work but were not officially in the workforce. Dealing with these dislocations will be a critical imperative in 2021.
One source of relief is the belated stimulus package. The $900 billion pandemic relief bill was finally enacted after months of delay and weeks of debate. It includes an additional $600 in payments to individuals, including children, and extends the enhanced unemployment benefit, though the amount is lowered to $300 per week. The bill also reopens the Paycheck Protection Program for a second round of small business loans and offers support for schools, child care, renters and additional food benefits. In addition, the bill provides funds for vaccine doses and distribution and continued assistance for testing.
This infusion of resources will help keep the structure of the economy intact and disseminate much-needed relief for individuals and families. The initial CARES Act was designed to provide aid for only a few months, and as the initial timeline draws to a close, the new stimulus bill will help to bridge the gap until vaccinations are widely completed. It is not sufficient, but it is necessary.
All signs point to robust future expansion in an economy which was basically sound before the crisis began. As the pandemic recedes, growth potential increases. While the recovery will no doubt be somewhat uneven and many changes lie ahead, 2021 is shaping up to be a year of transition and adjustment, but — hopefully — one that brings much needed and welcomed calm from the unprecedented storms of the recent past.
Economist Ray Perryman is president and CEO of the Perryman Group, an economic research group and analysis firm based in Waco.