America Disrupted: Unemployment skyrockets amid coronavirus crisis

Over the past 10 weeks, more than 40 million Americans have filed for unemployment at the hands of the coronavirus pandemic. Yahoo Finance’s Akiko Fujita speaks with Americans about their current financial standings, and with Former U.S. Treasury Secretary Larry Summers about unemployment outlook.

Video Transcript

BRIAN SOZZI: 2.1 million people filed for unemployment insurance, according to new data this morning from the Labor Department. Over the past 10 weeks, more than 40 million folks have filed for unemployment at the hands of the pandemic. Clearly, a number of Americans continue to face a harsh new economic reality. Yahoo Finance's Akiko Fujita joins us now. Akiko, what have you been hearing from people regarding their financial standing?

AKIKO FUJITA: Yeah, Brian, for this particular story, we set out to focus on a demographic that has been especially hit hard by this pandemic. And those women, they've accounted for 55% of the 21 roughly million jobs that were lost in April. And that pushed the unemployment rate for women from 3.1% in February to 15%. So you see the scale of that impact. Those numbers are even worse for women of color.

VANESSA MORALES: Oh, my god. This is the [SPANISH]. This is the stress for getting [SPANISH]. I have three girls. [SPANISH] It's difficult.

AKIKO FUJITA: It's been three months since Vanessa Morales received a paycheck. Like tens of millions of other Americans, she lost her job at the start of this pandemic. She's a nail technician and a mother of three, part of the workforce that's being hit the hardest in this crisis, minority women. How long can you go like this?

VANESSA MORALES: [SPEAKING SPANISH]

AKIKO FUJITA: With unemployment and the $600 check from the federal government, we've already spent all of our savings, she says. My husband and I have gone three months without work now. We've managed to pay our rent and utilities on time. We've paid with our savings.

How far along are we in understanding the full impact of this pandemic on the economy?

LARRY SUMMERS: I think in general, unemployment goes up the escalator and goes down the staircase. So it will take some real time for us to recover from this. And my guess is that we still have not hit bottom.

AKIKO FUJITA: 40% of workers making less than $40,000 a year have lost their jobs. But for four million new college graduates, the scale of this crisis brings different challenges. Analisa Caso started Marist College when the US economy was booming. Four years later, she's facing the worst labor market since the Great Depression.

ANALISA CASO: I'm not going to lie. It's very frustrating. It's really frustrating to have, like, just a lot of things taken away from you that, in past years, people have not had to deal with. I graduated college hoping to get ahead, but it turns out we're all just very behind.

AKIKO FUJITA: Desperate to catch up, she spends her days on LinkedIn looking for work. She has enough savings to pay down her student debt, but doesn't qualify for additional government aid.

ANALISA CASO: My goal right now is to at least have something by the end of the year. Worst case scenario, I'm in a lot of debt.

AKIKO FUJITA: Should we be looking at this as a momentary disruption, or is there a fundamental change you think that will happen coming out of this?

LARRY SUMMERS: I think it's a mixture. I think this is also going to mark a fairly profound structural change, and we're going to have very substantial increases in inequality and a very substantial reduction in any sense of solidarity in our society unless government steps up and meets this challenge.

AKIKO FUJITA: Morales knows what challenges look like. Two years ago, Hurricane Maria destroyed her home in Puerto Rico, forcing the move to New Jersey. Now her family faces another economic shock and more uncertainty.

How do the experiences compare for you?

VANESSA MORALES: Oh my god. [SPANISH]

AKIKO FUJITA: She tells me the experiences are similar. During Maria, we had no food and water or electricity. We have that now, she says, but there are concerns about infecting others. During the hurricane, you could at least hug people and comfort them.

Vanessa Morales there certainly says that she is hoping to get back to work. She's been told by her boss that she's eventually going to be hired back, although the question is when that nail salon she works at is going to reopen.

You know, one more thing to note here. You heard from Analisa Caso there, a college student or graduate that's been hit by this. And for students, you know, when you look at the historical numbers, the climb out of unemployment is going to be even more significant. You look at what happened during the financial crisis. The unemployment rate for all workers peaked at 10% for workers between 16 and 24. That peak was at 19.2%.

So it's not just about not having jobs. It's also about not getting health insurance and all the other benefits that come with the job. And for the class of 2020, that pain is especially going to be felt for the months to come.

ALEXIS CHRISTOFOROUS: Akiko, thanks so much for bringing us their stories. I think a lot of people can relate to what they just saw. I want to share a devastating statistic with everyone right now. According to the census, 55% of households with a child under the age of 18 had at least one adult lose a job during this pandemic. When you were talking to these people, did they feel like the government was doing enough to help them right now?

AKIKO FUJITA: You know, I'm not sure they feel like the government needs to do more as it is they're just sort of dealing with the day-to-day reality. You heard from Vanessa there saying her husband lost his job. She lost her job. She's got four kids. She's gone through her savings. But you know, she said, look, we're trying to make our payments on time, and that's our priority right now.

Obviously, the unemployment checks they've been getting from the federal government's going to run out over the summer, so she's really going to have to reconsider things on that front. But I think for a lot of these people who are unemployed, it's really about the day to day, and the government check they're getting is really just an extra on top of the pain they're already feeling.

BRIAN SOZZI: Akiko, switching gears a bit here, you have another chapter coming in your Climate Crisis series. What did you cover?

AKIKO FUJITA: Yes. So we've spent the last three weeks, obviously, bringing you this climate change series. Next week, we're going to be looking at the toll that all of the data that we collect is taking on the environment. And this is something that I think a lot of us don't think about. Just think about the last time you cleared out your inbox of photos, emails, all the people who are now at home gaming. That's taking a toll on all the data centers, which use up a lot of energy.

And so we're going to be actually taking you out to a data center in Las Vegas that is going 100% carbon neutral, just one of many things the big tech names like Microsoft, as well as Amazon, are considering.