Employment under covid-19

This is Joseph

While we are all quarantined, it may be time to start thinking about long term economic impacts as well. Look at this amazing chart:

This is a very atypical recession. There is no moral hazard involved as these people are losing their job to a pure external shock. But the risk that this will blossom into something worse is worth considering, especially if the epidemic lasts for a while. Schools and universities (and daycares!) are currently closed for months. This will impact hiring and employment. It is hard to job search while you are social distancing and economic activity is down. These numbers are unimaginable when compared to normal times:

Government of Canada has received 500,000 applications for Employment Insurance this week, PM Justin Trudeau says. That compares to 27,000 for the same week last year.

The time to be considering these consequences, and how to mitigate them, is now. We are so far outside the range of previous data that we should be thinking carefully about heroic measures and not hoping that normal measures will work.