42 Million and Counting
42 million Americans have filed for Unemployment Insurance (UI), including just under 2 million in the past week. https://www.theguardian.com/business/2020/jun/04/us-unemployment-claims-top-4xm-despite-rate-of-increase-slowing That’s 42 million Americans who have lost their jobs and have been facing severe economic distress paying rent, utilities, food and medicine.
States have only processed a fraction of the numbers of claims, leaving too many Americans with no money coming in. https://www.cnbc.com/2020/05/15/44percent-of-us-unemployment-applicants-have-been-denied-or-are-waiting.html Florida has been among the worst performing states in processing UI claims. https://www.nbcmiami.com/news/local/6-of-florida-unemployment-claims-have-been-paid-out/2222313/ But it is hardly the only one.
There are three elements to UI: regular UI which is a fraction of your paycheck, the $600 weekly bump, and the extension to the gig workforce and the self-employed; the latter two are 100% federally financed. The fraction of your paycheck covered by UI is decided by the state you work in, and in many states it is very low.
Senate Majority Leader McConnell and Senate Republicans want the $600 a week bump in UI benefits to end at the end of June. They contend that workers won’t go back to their jobs if they can still get the $600 weekly bump. Speaker Pelosi and House Democrats want to extend it to the end of the calendar year. They expect that the recovery will be slow for many impacted businesses, and the $600 bump is crucial to families paying for the necessities of food, shelter and medical care. There is some discussion from Republicans about tying it to a return to work. That is an interesting idea as a theory to re-stimulate the economy, but how do you do this, if there is no work. For example if tourists aren’t coming, if people aren’t going out to restaurants or flying in airplanes due to very legitimate fears about contracting the Coronavirus, those leisure and hospitality jobs are not going to be restored by ending the $600 weekly bump and turning it into a return to work bonus.
The economy is starting to slowly recover; construction and manufacturing jobs may be in the first wave of recovery; however service sector jobs in the travel, tourism, restaurant and retail sectors are going to be very slow to recover. https://www.bloomberg.com/graphics/recovery-tracker/ CBO projects the recovery will take several years, but the employment bounce back will be pronounced beginning in the third quarter of this year. https://www.cbo.gov/publication/56368 The early evidence on jobs recovery in May is promising. There are big disagreements about whether our recession and recovery will be short and V shaped or long and U shaped, or W shaped or L shaped. https://www.nytimes.com/2020/05/29/business/economy/economy-recovery-forecast-coronavirus.html The stock markets are assuming a short V shaped recovery. A sharp increase in Covid 19 illnesses would almost certainly result in a W shape. We are at the unknowable intersection of the progression of an unknown disease and the uncertain economy. This recovery is further confounded by the protests sweeping the nation in the wake of the Minneapolis killing of George Floyd who may have been trying to buy some groceries with a counterfeit $20.
Prepared by: Lucien Wulsin
Dated: 6/4/20