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Record High Unemployment in the US

2020 introduced a new high in unemployment rates, and everyone knows why. The current variation of coronavirus, COVID-19, has made for unprecedented times in our society that no one could have prepared for, but despite what the rate is on paper, plenty of companies are still hiring, and recruiting partners like Hire Up are bridging the gap between industries and the unemployed workforce. 

What Exactly is an Unemployment Rate?

Economists use several methods to determine the health of a country or economy. The unemployment rate, which shows who, out of the active workforce, is unable to land a job, gives economists a clear indication of how the economy is doing. 

The unemployment rate in the US is calculated as the percentage of people out of work, out of those who can work and are actively seeking jobs. The labor force in the US economy only includes those who have been actively applying to jobs or those currently employed in full-time, part-time, or temporary jobs in the last month. 

It’s worth mentioning that this doesn’t take into account those individuals who are not applying to jobs due to believing that they are not qualified for the roles available in the current economy. This group of people within the economy are called “Discouraged Workers.” As a company looking to hire, providing on-the-job training programs could target more of these individuals.

Unsurprisingly, the unemployment rate has varied throughout time; it’s not difficult to determine the reasons for each fluctuation by studying the current affairs of that time in history. What we can determine from each trend is that there are always new roles and new industries being introduced; the unemployed workforce needs to be made aware of them. For example, new technology could render a whole workforce redundant, or the decline in the demand of a certain industry could force companies to layoff workers. 

How COVID-19 has Affected the US Labor Force

With a number of industries unable to operate fully, many workers have been made redundant, seen a reduction of their working hours, or been let go from their jobs. 

January 2020 saw a reduction in the unemployment rate, with only 3.5% of the labor force out of work. By April 2020, the rate had drastically increased to 14.8%, the highest it has been since the Great Depression in the 1930s (accounting for inflation). From February to April, the unemployment rate had quadrupled in less than two months. 

At the beginning of this pandemic, we saw a decline in the travel industry, forcing airlines to shut down and travel agents to layoff staff. The hospitality industry soon followed. Social distancing implementations and the lack of tourism meant that hotels couldn’t operate fully; restaurants, gyms, and bars had to close due to social distancing measures; and companies that aren’t deemed as essential told their employees to work from home, reducing commuters in cities and the need for coffee shops, offices, and venue spaces. In April, over 23 million workers were let go of their jobs. 

A report from the Bureau of Labor Statistics shows that, in December 2020, over 25 million individuals had seen a reduction in pay or hours due to COVID-19, with over 10 million of these individuals now unemployed. 

With industries slowly getting back on their feet and many individuals finding new roles within rising and more stable companies, between November and December, there was only a slight change in the unemployment rate. This could show that the economy is adjusting to the situation, and we are being introduced to a new way of working. Partners like Hire Up Staffing Services can help fill the positions left open during this time of unprecedented unemployment. 

A Brief History of Unemployment Rate

According to the Federal Reserve, all economies have some form of unemployment. A healthy, natural rate sits between 3.5% and 4.5%, accounting for the progression of individuals between jobs or entering the workforce after education, taking sabbaticals, or retiring. Since 1929, the Bureau of Labor Statistics has recorded the rate as it helps economists determine what a healthy economy is. 

If we account for inflation, studies show that people living through the Great Depression in the 1930s experienced the highest recorded rate of unemployment. The rate never went below 14% in that decade, with a high of 24.9% in 1933. In the US, from the 1950s to 2020, the unemployment rate has averaged at 5.77%.  During the Financial Crisis of 2008, the highest recorded unemployment rate was 9.9%. 2020’s unemployment rate reached its peak at 14.8% in April. Between February to April of the past year, the unemployment rate had quadrupled in less than two months.

Other factors that can also alter the unemployment rate include tax increases, implementation of laws such as minimum wage, droughts, and, most notably, wars.

Reasons for an Increased Unemployment Rate

Customer Preference

A lack of interest in a product or service reduces the need for supply and, as a result, forces companies to let go of employees.

E.g. The decrease in the demand for dairy, due to citizens’ interest in their carbon footprint, has led to a decline in sales of milk, cheese, and butter.

Technological Advances

Although advances in technology create plenty of benefits, they can also create an environment in the workspace that no longer requires human presence. 

E.g., The digitalization of news on the internet has meant that sales in newspapers have declined, leading to a 51% reduction in newsroom employment from 2009 to 2019. 

Trade and outsourcing

Globalization has caused many manufacturing jobs to move from high-wage to low-wage countries. With laws to protect American workers, such as the Fair Labor Standards Act of 1938, some companies use other countries to avoid paying their workers overtime, for example.

E.g., Sweatshops in developing countries are used constantly by the fashion industry to drive the cost of fast fashion down and keep up with consumers’ needs.


Churn from moving from one job to another leads to temporary unemployment. This is natural in both healthy and struggling economies and is needed for a country’s development. A very low unemployment rate can actually be worse for the economy, with effects such as rising wage inflation.

E.g. An individual could change industries, leaving a position in their previous company unfilled. 


Most high-wage careers have years of training before an individual is deemed qualified for that role. As a company looking to hire during a high unemployment season, providing on-the-job training helps as a way to broaden the scope of who can apply to each role. Hire Up Staffing Services can help those looking for a job find work in their area of expertise. 

E.g., It takes at least seven years to become a doctor. Although the need for doctors is ever-present, when COVID-19 increased the need for healthcare workers, hospitals cannot just hire individuals without the right credentials.

Re-entering the workforce

Each individual has their own path, which leads to breaks and changes within the workforce as a whole. Again, just like relocation, this is part of a healthy economy.

E.g. New mothers and fathers taking leave to look after their child or someone recovering from an accident or surgery might take an extended leave from the workforce.


Firms lay off more people and go through a hiring freeze during a recession, and these individuals have to spend less as a result. When coming out of recession, firms have a hiring frenzy which lowers the rate of unemployment. 

Natural Disasters

A pandemic isn’t something that can be predicted and has the same effect as a natural disaster. The result of COVID-19’s impact on unemployment has come from a combination of factors, such as industry demands changing as individuals are no longer free to spend money on holidays, restaurants, or leisure. 

How the Unemployment Rate Differs Between States

During 2020, 19 states experienced their lowest unemployment rate and the highest unemployment rate in history. 46 of the 50 states experienced their highest unemployment rate between April 2020 and July 2020, showing just what COVID-19 is capable of in terms of damaging the economy.

Each state has different industries that they specialize in, which impacts the rise and fall of unemployment rates. Infrastructure and educational institutions, housing prices, and innovation are just some of the factors that drive each state’s decisions to develop certain industries. 


Minnesota is home to the Mayo Clinic, a non-profit healthcare organization. It makes sense that Minnesota has the largest number of healthcare employees in the US, employing around 500,000 people. 


The Silver State Nevada’s main attraction is Las Vegas, which employs over 90% of the state’s workforce. Most of these employees are in the service industry, which means, heartbreakingly, Nevada saw the highest state unemployment rate the country has ever seen in April 2020, at 30.1%.

Government and Military 

In New Mexico, government employment outweighs the private sector. They have a number of institutes, including laboratories and air force bases. 


Over 75% of Vermont’s income from agriculture is gained from selling dairy products. The agricultural industry, the state’s highest employer, accounts for more than 64,000 jobs. 


Florida might be seen as the Sunshine State, but tourism isn’t the only industry that Florida is an expert in. The state is among the top ten for manufacturing, with over 18,000 companies hiring around 317,000 employees.


Virginia has many key agricultural industries due to its land diversity. Despite this, Virginia is home to the largest data center market and the second-highest employer of tech workers in the U.S, which is somewhat ironic, considering this career doesn’t tend to require the outdoors. In contrast to Nevada, Virginia’s diversity has meant that it achieved the lowest unemployment rate in the history of the US in November 2000, at 2.1%.

Are Companies Still Hiring?

The short answer is yes. Despite the increased unemployment rate on paper, in reality, a great deal of companies have not only stayed afloat but actually benefited from this pandemic. 

A workforce being made to work in their own homes changes the mindset of a whole society: what can we live without? Family and communication are given a newfound appreciation, increasing the need for better virtual solutions; companies still need to find ways to keep morale and stay productive; the fitness industry had to rethink their marketing strategies from promoting a beach body to emphasizing holistic health, all while their customers of active gym-goers are forced to think bigger than walk from their living room to their bedroom. 

Industries that have benefited from people working from home include remote working solutions like Zoom and team management software like Trello, Notion, and Google Drive. E-Learning has become more accessible, SkillShare and Edmodo have opened up new ways of learning for people who would normally be out for the duration of the day. E-Learning isn’t limited to education either; the fitness industry has benefited from going online, running workout classes, and meditation sessions from the comfort of the living room. 

COVID-19 has illuminated the need for healthcare workers in the US. Even before the effects of a pandemic, it was predicted that there would be a shortage of 1.2 million registered nurses in the US by 2022. Hospitals all around the country need more support from the local community, with on-the-job training and a higher wage offered for unsociable hours (weekends and night shifts). 

Many companies are still hiring during this time. There are a few ways to find out who, such as using platforms like Otto and Hire Up. Another great way to find which companies are still hiring is LinkedIn. The social media platform regularly updates the article “Here who’s hiring right now” to widely advertise the fact that the world is still turning, and roles are still available to apply to. 

What Can Businesses Do When Hiring During the COVID-19 Pandemic?

Having a moderately low unemployment rate benefits the economy as a whole. Employed individuals have more money to spend, supporting the companies that then sell more and, as a result, need to hire more people, creating a cycle of confidence in the market. It’s predicted that by 2022, the unemployment rate still won’t be back to what it was in January 2020. Despite what these statistics show on paper, companies are continuing to hire, and it’s important for the unemployed workforce to be made aware of the vacancies and to be given the confidence to apply to them. To speed up the process of achieving a lower unemployment rate and a healthier economy, companies can continue to hire by using a few tips and tricks. 

Broaden the number of potential employees 

Requiring a certain degree or asking for a minimum number of years in a certain field can limit the number of fast-learning, prospective employees that could be assets to a company. Instead, companies can increase their number of potential applicants by broadening the specificity of what they’re looking for. 

E.g., Instead of requiring a degree in Journalism, a digital news company can hire someone who has had experience managing their old company’s social media. 

Team up with the community

Creating links between educational institutions and companies can shorten the transition time between student and worker for many individuals. 

Collaborating with other companies to create a hub of opportunities for academic institutions can increase the quality of potential employees and increase the likelihood of new graduates applying to these companies. Partnerships between multiple small businesses and institutions will lead to a more cost-effective way of hiring and provide overall advantages for the community.

Use recruitment partners to gain new applications

Unemployed workers looking for jobs can sign up to agencies like Hire Up Staffing Services to help move their employment process along. Hire Up closes the gap between job seekers and employers. Agencies have a large database of potential applicants and can provide the first filter to locate prospects at the caliber a company desires. 

Provide training courses

A company is more appealing if it provides the ability for its employees to learn. This also ensures that the company can tailor the employees’ education to fit the product or service.

E.g. Instead of requiring three years in supply chain management, a business could host a two- week, on-the-job training program for its employees. 

As business owners or companies look to increase their employability, broadening their talent pool by providing training programs, collaborating with their local community, and using staffing partners like Hire Up to close the gap between applicants and employers. It’s crucial for the workforce to be aware of what jobs are still available to apply to, like remote working solutions, supply chain logistics, and healthcare. An inclining unemployment rate can be disheartening for many workers, but the trend that the workforce can be sure of is that the unemployment rate will decrease and average out with time and confidence in the economy.