State economists predict a much faster recovery from the coronavirus recession than seen with prior economic downturns, according to The Oregonian. The unemployment rate dropped from 14.9% in April to 6.9% this past month.
However, the economist cited possible “permanent damage” from long-term unemployment. The number of Oregonians who have been out of work for at least six months reached nearly 55,000 in October – four times the number who were out of work that long before COVID-19.
“The longer a spell of unemployment lasts, the lower the probability of finding a job and the higher probability of dropping out of the labor force entirely. This reduces the productive capacity of the economy as fewer people are available for work,” state economists wrote in Wednesday’s forecast.
Unemployment benefits were extended in March from the standard 26 weeks to 39 weeks, coming to $189 million in extra payouts since then, according to The Oregonian. The extension expires before the year’s end, and Congress has failed to make any traction on another one. Without federal support, state economists expect the pandemic recession to leave linger effects.
The Oregonian reported that some workers may be eligible for other extended benefits, but the Oregon Employment Department estimates as many as 70,000 people could lose benefits when they expire the day after Christmas.
By Cody Mann