Millions of jobs lost to coronavirus pandemic could take years to return

The damage inflicted to the jobs market is expected to persist for years, IRS projections show

Millions of American jobs lost during the coronavirus pandemic could take years to return, according to new projections released by the Internal Revenue Service, underscoring the depth of the damage inflicted by the crisis on the nation's labor market.

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The IRS forecasts there will be about 229.3 million employee-classified jobs in the U.S. in 2021 — a drop of roughly 38.9 million from the previous year, before the virus hit, the projections show. The data is an estimate of how many W-2 tax forms the agency expects to receive that year.

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The damage inflicted to the jobs market is expected to persist for years, the data shows, with W-2 filings still nowhere close to their pre-pandemic levels even in 2028. The IRS expects to see about 255.5 million that year.

Since the pandemic triggered an unprecedented shutdown of the nation's economy in mid-March, about 57 million Americans have filed for unemployment benefits.

The unemployment rate is officially at 10.2% after the economy added 1.8 million jobs last month, according to the Labor Department's July jobs report. The report marked the third consecutive month of job growth in the millions, the economy has so far added back less than half – about 42 percent – of the 22 million jobs it lost during the pandemic.

Nearly half of Americans whose families experienced a layoff during the coronavirus pandemic think the job loss will be permanent, which could mean that roughly 10 million workers need to find a new employer, according to a recent poll from the Associated Press-NORC Center for Public Affairs Research.

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The poll showed that 47 percent of households with a job loss think it's permanent or probably not coming back. Comparatively, in April 78 percent of households with a job loss thought it would be temporary.

The findings come after a surprise jump in jobless claims.

Last week, more than 1.1 million laid-off workers filed for unemployment aid, reigniting concerns that the labor market's early recovery was already plateauing. It marked the biggest one-week increase in claims since mid-March.

"The lack of meaningful improvement suggests the recent positive momentum is running out of steam," said Scott Murray, an economist with Nationwide.

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