Blog | Economic Policy Institute http://www.28sanzai.cn Research and Ideas for Shared Prosperity Wed, 16 Sep 2020 20:00:16 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.7 What to watch for in the 2019 Census data on earnings, incomes, and poverty http://www.28sanzai.cn/blog/what-to-watch-for-in-the-2019-census-data-on-earnings-incomes-and-poverty/ Thu, 10 Sep 2020 19:47:42 +0000 http://www.28sanzai.cn/?post_type=blog&p=208519 On Tuesday, the Census Bureau will release its annual data on earnings, incomes, poverty, and health insurance coverage for 2019. There are a number of important things to know about this data release, including:

  • These data report household incomes from 2019, not 2020. In short, this data will be silent on what has happened since the pandemic and ensuing recession hit the United States and resulted in widespread job loss and health devastation. It will, however, provide some insights into the labor market as we entered the current recession, which magnified deeply entrenched economic inequalities and racial and ethnic?disparities.
  • The data on incomes in 2019 was collected in February, March, and April of 2020. Its collection was likely extremely hampered by the COVID-19 pandemic. This could make it less reliable than previous year’s releases, and biases could be particularly large for low-income households.
  • The data will give us insight into how evenly (or unevenly) economic growth has been distributed across U.S. households in 2019. Other data sources that are released more than once a year too often provide only averages or aggregates into what is happening in a particular month—but next week’s Census release gives a comprehensive picture of how the U.S. economy was working for typical households over the full year, including individual, family, and household level data on annual earnings and incomes.
  • The data is likely to show strong, relatively widespread income growth in 2019. Policymakers should take heed of this, as the roots of this growth was a labor market approaching full employment, with the unemployment rate below 4% for the entire year.

This year’s income data will almost surely be lower quality than usual, despite heroic efforts by the Bureau of Labor Statistics (BLS) and the Census Bureau to maintain quality in the face of a global pandemic. Although the data release includes information about 2019 only, the data was collected between February and April of this year, right as the pandemic began to spread rapidly and most of the country was locked down. This almost surely caused serious issues with data collection, which will likely impact estimates for 2019. In March and April, there was a precipitous drop off in household response rates. This was due, in part, to the Census suspending in-person interviews for health reasons. But even among those households who wouldn’t usually receive in-person visits, for instance, in subsequent months after their initial entry into the survey, there were significant reductions in response rates.

If the drop-off in response rates was random, estimates would be unbiased. However, there’s good reason to believe that the drop-off in response rates was not random. It seems plausible that households facing job losses or health events would be less likely to respond to the survey. My own preliminary analysis of the drop-off in survey responses suggests that’s the case, with a sharper drop for Black and Hispanic?workers—who have disproportionately faced economic and health insecurity from COVID-19—and workers with lower levels of education. If that’s the case, then the estimates generated from the remaining respondents may overstate the strength of the labor market in 2019 or, at the very least, rely on fewer numbers of those workers to generate estimates, thereby increasing their uncertainty and widening their confidence intervals.

At the same time, those households that did respond and saw dramatic changes in their employment and/or earnings status between 2019 and the survey date may have let their current situation influence their answers. Although they will have been instructed to provide information about the prior year, some respondents may exhibit recency bias, where they favor their current situation over their past situation. Since the change in employment and/or earnings is more likely to be negative given the downturn of the labor market, this may give a downward bias to their responses for 2019.

Additionally, the extended individual tax filing deadline in 2020 (also caused by the COVID-19 shock) likely will adversely affect data quality. Traditionally, the Census data is collected around March each year precisely because of tax season, when people tend to be more familiar with their previous year’s income as they prepare their taxes. Many people, however, were not preparing their taxes during the data collection window this year. The allowance of non-penalized deferred tax filings may mean that households relied on recall rather than recently compiled income information when answering questions. Taken together, there is some uncertainty about the presence or direction of any bias in the reported data, stemming from lowered response rates coupled with dramatic changes in the labor market and an extended tax filing deadline in the spring.

While out of date for measuring today’s economy, the latest data from 2019 will give us a useful glimpse of what a stronger economy means for working people. In 2019, the unemployment rate averaged 3.7% and wages continued to grow between 2018 and 2019, albeit slowly and unequally. Furthermore, the tightening labor market combined with state-level minimum wage increases translated into some stronger growth for low-wage workers. In next week’s release, we will see how well increases in labor force participation and wages translated into faster annual earnings growth, higher incomes, and lower poverty. Approaching genuine full employment should mean that the benefits of the stronger economy accrue not only to high-wage workers, but also and particularly to middle- and low-wage workers. The benefits should mean faster wage growth as well as an increased ability for workers to secure enough work hours, which, taken together, should translate into increases in household incomes. As a result, I hope we will finally see non-elderly households incomes return to their peak in 2000.

Broad-based growth should also mean the narrowing of racial earnings and income gaps. As of 2018, racial and ethnic income gaps persisted as household incomes experienced uneven growth. The figure below shows real median household income by race and ethnicity from 2000 to 2018. In 2018, the median Black household earned just 59 cents for every dollar of income the median white household earned, while the median Hispanic household earned 73 cents for every median white household income dollar.

Figure A
Figure A

Also of note in the figure above are the dotted lines, which represent an imputation of historical values due to changes in the Census’ data processing system. When corrected for the break in the series, it is clear that Black households have failed to regain the incomes lost during the slow early 2000s recovery and expansion as well as during the Great Recession’s prolonged recovery. Since white households have seen faster growth—though not fast by most benchmarks—the Blackwhite gap in household incomes has actually widened over time. We will look to the latest Census data to see if any progress has been made in closing those gaps as well as achieving decent earnings and income growth across all demographic groups. The growing economy along with a significant drop in inflation in 2019 (1.8% in 2019 as compared to 2.4% in 2018) makes real widespread growth in living standards more likely.

A widespread increase in living standards in 2019 would be promising and should highlight how valuable truly tight labor markets are to most families. There was nothing about the 2019 labor market that was unsustainable economically—core inflation was tame. Federal Reserve Chair Jerome Powell recently affirmed this view, noting that the full-employment economy of the late 1990s did not lead to spiraling inflation as he stressed the importance of allowing the recovery to fully develop to achieve better outcomes for those too often left behind. Next week’s data release will hopefully inform policymakers how to get us back on the road to full employment sooner rather than later.

]]>
UI claims rising as jobs remain scarce: Senate Republicans must stop blocking the restoration of UI benefits http://www.28sanzai.cn/blog/ui-claims-rising-as-jobs-remain-scarce-senate-republicans-must-stop-blocking-the-restoration-of-ui-benefits/ Thu, 10 Sep 2020 14:11:04 +0000 http://www.28sanzai.cn/?post_type=blog&p=208464 Last week, total initial unemployment insurance (UI) claims rose for the fourth straight week, from 1.6 million to 1.7 million. Of last week’s 1.7 million, 884,000 applied for regular state UI and 839,000 applied for Pandemic Unemployment Assistance (PUA). A reminder: Pandemic Unemployment Assistance (PUA) is the federal program for workers who are not eligible for regular unemployment insurance, like gig workers. It provides up to 39 weeks of benefits and expires at the end of this year.

Last week was the 25th week in a row total initial claims were far greater than the worst week of the Great Recession. If you restrict to regular state claims (because we didn’t have PUA in the Great Recession), claims are still greater than the 2nd-worst week of the Great Recession. (Remember when looking back farther than two weeks, you must compare not-seasonally-adjusted data, because DOL changed—improved—the way they do seasonal adjustments starting with last week’s release, but they unfortunately didn’t correct the earlier data.)

Most states provide 26 weeks of regular state benefits. After an individual exhausts those benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of state UI benefits that is available only to people who were on regular state UI. Given that continuing claims for regular state benefits have been elevated since the third week in March, we should begin to see PEUC spike up dramatically soon (starting around the week ending September 19th—however, because of reporting delays for PEUC, we won’t actually get PEUC data from September 19th until October 8th). It is also important to remember that people haven’t just lost their jobs. An estimated 12 million workers and their family members have lost employer-provided health insurance due to COVID-19.

Figure A combines the most recent data on both continuing claims and initial claims to get a measure of the total number of people “on” unemployment benefits as of September 5th. DOL numbers indicate that right now, 32.4 million workers are either on unemployment benefits, have been approved and are waiting for benefits, or have applied recently and are waiting to get approved. But importantly, Figure A is an overestimate of the number of people “on” UI, for two reasons: (1) Some individuals are being counted twice. Regular state UI and PUA claims should be non-overlapping—that is how DOL has directed state agencies to report them—but some individuals are erroneously being counted as being in both programs; (2) Some states are including some back weeks in their continuing PUA claims, which would also lead to double counting (the discussion around Figure 3 in this paper covers this issue well).

Figure A
Figure A

Figure B shows continuing claims in all programs over time (the latest data are for August 22). Continuing claims are more than 28 million above where they were a year ago. However, the above caveat about potential double counting applies here too, which means the trends over time should be interpreted with caution.

Figure B
Figure B

I have received many questions about how to square the UI numbers with the monthly jobs numbers. This thread from Jobs Day last Friday explains it (in particular, tweets six–eight show how the number of officially unemployed is “undercounted,” and tweets 20–24 show how UI claims are overcounted).

Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire at the end of July. Last week was the sixth week of unemployment in this pandemic for which recipients did not get the extra $600. That means most people on UI are now are forced to get by on the meager benefits that are in place without the extra payment, benefits which are typically around 40% of their pre-virus earnings. It goes without saying that most folks can’t exist on 40% of prior earnings without experiencing a sharp drop in living standards and enormous pain.

In early August, President Trump issued a mockery of an executive memorandum. It was supposed to give recipients an additional $300 or $400 in benefits per week. But in reality, even this drastically reduced benefit will be extremely delayed for most workers, is only available for a few weeks, and is not available at all for many. This chart from The Century Foundation shows how much less in benefits people are getting under Trump’s executive memorandum than they did under the CARES Act. The executive memorandum’s main impact was to divert attention from the desperate need for the real relief that can only come through legislation. Congress must act, but Republicans in the Senate are blocking progress.

Blocking the $600 is terrible on both humanitarian and economic grounds. The extra $600 was supporting a huge amount of spending by people who now have to make drastic cuts. The spending made possible by the $600 was supporting 5.1 million jobs. Cutting that $600 means cutting those jobs—it means the workers who were providing the goods and services that UI recipients were spending that $600 on lose their jobs. The map in Figure B of this blog post shows many jobs will be lost by state now that the $600 unemployment benefit has been allowed to expire. The labor market is still 11.5 million jobs below where we were before the virus hit. Now is not the time to cut benefits that support jobs.

But what about the supposed work disincentive effect of the $600? Rigorous empirical studies show that any theoretical work disincentive effect of the $600 was so minor that it cannot even be detected. For example, a study by Yale economists found no evidence that recipients of more generous benefits were less likely to return to work, which is what we would expect to see if the extra payments really were a disincentive to work. And a case in point: in May/June/July—with the $600 in place—9.2 million people went back to work, and a large share of likely UI recipients who returned to work were making more on UI than their prior wage. The extra benefits did not stop them from going back. A job offer is too important at a time like this to be traded for a temporary increase in benefits, and when commentators ignore that, they are ignoring the realities of the lives of working people. Further, there are 8.5 million more unemployed workers than job openings, meaning millions will remain jobless no matter what they do. Dropping the $600 cannot incentivize people to get jobs that are not there. And, as Figure B shows, total continued claims in the most recent data are higher than they were when the $600 expired. It simply wasn’t the $600 that was keeping people on UI, it was the fact that they can’t find work.

Dropping the $600 is also exacerbating racial inequality. Due to the impact of historic and current systemic racism, Black and brown communities have seen more job loss in this recession, and have less wealth to fall back on. They are taking a much bigger hit with the expiration of the $600. This is particularly true for Black and brown women and their families, because in this recession, these women have seen the largest job losses of all. The Senate must extend the UI provisions of the CARES Act, both to provide relief to the jobless and to the bolster the broader economy.

]]>
Different economic crisis, same mistake: The Fed cannot make up for the Republican Senate’s inaction http://www.28sanzai.cn/blog/different-economic-crisis-same-mistake-the-fed-cannot-make-up-for-the-republican-senates-inaction/ Wed, 09 Sep 2020 12:00:48 +0000 http://www.28sanzai.cn/?post_type=blog&p=208287

Key takeaways:

  • Following the Great Recession of 2008-2009, Congress did little to help recovery, and we relied almost exclusively on actions from the Federal Reserve to spur recovery. That was a mistake.
  • It is Congress that has the tools that could end the economic crisis, and the Senate Republican caucus that is the roadblock to using these tools should be the focus of policy attention today.
  • While the Fed has shown better judgement than Congress in the last economic crises, the tools they currently have are too weak to spur the needed recovery. In the end, there is no good substitute for a dysfunctional Congress—and today’s dysfunction is caused by Senate Republicans who refuse to act.

The economic shock of the coronavirus is very different from the housing bubble shock that caused the Great Recession of 2008-2009. Yet six months into the current crisis, we are in danger of repeating a same key mistake: leaning too hard on the Federal Reserve to navigate the crisis while ignoring the much more important role of a bloc in Congress that is blocking needed aid. While it is true that the Fed has shown better judgement over the course of this crisis, the tools it currently has available to address it are weak. The tools Congress has are strong, but their actions have been stymied by the mystifyingly bad judgement of Senate Republicans.

The Fed is an enormously powerful institution in many ways, but their policy tools are actually quite limited for boosting the economy out of a recession or even increasing the rate of growth during recoveries. The Fed can decisively slow economic expansions, and too often in the past they have done this explicitly to weaken workers’ bargaining position and keep wage-driven pressure on prices from forming. In short, the Fed has a powerful brake but a very weak accelerator, and their use of this brake has merited much criticism in the past.

If the Fed is relatively weak in its ability to end recessions, why do its actions get so much attention during times of economic crisis? Mostly because the actions of Congress (dominated for the past decade by the Republican caucus in the Senate) have been either too weak or outright damaging during these crises. For example, in the weak recovery from the Great Recession of 2008-2009, austerity imposed by a Republican-led Congress throttled growth, even as historically aggressive actions by the Fed tried (only partly successful) to counter this fiscal drag. During this period, every new Fed decision about interest rate changes or quantitative easing (QE) sparked long and loud controversy, even while having a minimal economic effect. Yet the enormous cumulative damage of fiscal austerity stemming from Congressional actions like the Budget Control Act (BCA) of 2011 merited just a tiny fraction of this debate. Yet the damage done by the BCA utterly dwarfed the small (if admirable) attempts by the Fed to push the economy back to recovery.

In the current moment, there has been plenty of debate about what the Fed should do differently to ease the economic crisis. But again, it is Congress—hamstrung by Senate Republicans’ refusal to act—which has all the power to end this crisis. And “end this crisis” is not an overstatement. The playbook for dealing with the current economic crisis is pretty obvious: provide relief for families with workers put out of work by the shock for as long as labor markets remain damaged, direct resources to state and local governments whose revenues have been savaged by the shock just as spending demands have risen, and spend every last dollar that would be useful for getting the virus under control. If the federal government is currently too dysfunctional to figure out how to spend these dollars to control the virus, then this means the aid to state and local governments should be that much greater.

Congress provided genuinely transformative relief to families in the CARES Act passed in March, but they cut off the aid far too early, assuming unrealistically that the virus would be under control in a matter of weeks. But for three months, the United States had a relatively generous and protective welfare state. There is no reason why Congress should not have continued this aid to families and provided generous and open-ended aid to state and local governments as well.

Some have argued that transferring resources to state and local governments is a power the Fed actually does have today, and that the Fed should take the lead on this. Some of these arguments are transparently cynical and meant only to justify congressional inaction. Others are more serious, and the Fed does have some scope here, but, again, the weaknesses of the Fed’s tools are too often underappreciated. Essentially, the Fed has the power to make loans, not grants. Their current program that makes loans to state and local governments—the municipal liquidity facility (MLF)—charges these governments more than market interest rates for debt. From an economic point of view, this is clearly dumb—the Fed should try to make these loan terms as generous as possible.

But, it is telling that state and local government debt even outside the MLF does not seem to be growing very fast even with interest rates in these markets very low (after some hiccups in those markets in March and April, which were largely tamped down by the Fed’s promised interventions). This was also true during the recovery from the Great Recession—very low municipal bond interest rates did not lead to a burst of state and local borrowing to support spending. What this should tell us is that the level of interest rates is not the real constraint here. Instead, it is state accounting and budget rules (set by law or in state constitutions) that provide a large hurdle for states thinking of taking on debt, whether market-based debt or debt through loans provided by the MLF. There is also ideology: The Republican electoral wave in 2010 led to governors and legislatures that were not going to spend more money regardless of how low interest rates on municipal bonds were.

If the Fed made radically large changes in how generous the terms of the MLF were (way beyond tweaking interest rates), would policymakers start quickly rewriting these state and local budgeting rules and begin piling on debt? For example, if the Fed charged negative interest rates on the loans and said that governments had 100 years to pay them back? From an economic viewpoint, this would indeed provide substantial relief to state and local governments. But, there are federal laws governing the loans the Fed can make, and it is far from clear that this would pass legal muster. While I wish it would pass muster—and I’m not that worried about the legality of this from a moral perspective—I worry that the Fed effectively usurping authority from Congress could spur Congress to respond with legislation that affirmatively reduced the future scope for the Fed to intervene during crises. Senate Republicans have made it very clear in the current moment that they do not want aid transferred to state and local governments. If the Fed declared it had the power to effectively transfer this aid and bypass Congress, would these Senators really sit idly by? This is a real potential cost to be reckoned with by those arguing for the Fed to test their legal limits super aggressively.

It’s obvious why many focus on the Fed and wish it would be more transformative in helping the economy out of crises—the Fed has cleared the very low bar of showing some level of competence and judgement in recent crises, while Congress has completely stumbled. But it’s Congress that has the tools needed to end the crisis, and it can use them anytime it wants. They—and the Senate Republican caucus that is the roadblock to using these tools—should be the focus of policy attention today. They shouldn’t be let off the hook simply because we presume they’re too incompetent (or malevolent) to be expected to act responsibly.

If a better Congress doesn’t appear, it may well be the case that we need to think hard about giving the Fed more effective tools to fight recessions in the future. It’s not impossible economically—we could give the Fed the legal right and administrative tools to transfer resources directly to people. But giving the Fed these expanded tools would require Congress to affirmatively grant them. In the end, there is no end-around a Congress that refuses to do what’s right for U.S. families.

]]>
Total initial UI claims have risen in each of the last four weeks: Congress must act http://www.28sanzai.cn/blog/total-initial-ui-claims-have-risen-in-each-of-the-last-four-weeks-congress-must-act/ Thu, 03 Sep 2020 14:15:13 +0000 http://www.28sanzai.cn/?post_type=blog&p=207879 Last week 1.6 million workers applied for unemployment insurance (UI) benefits. Breaking that down: 881,000 applied for regular state unemployment insurance, and 759,000 applied for Pandemic Unemployment Assistance (PUA).

This is the fourth week in a row that total initial claims have risen. Further, last week was the 24th week in a row total initial claims were far greater than the worst week of the Great Recession. If you restrict to regular state claims (because we didn’t have PUA in the Great Recession), claims are still greater than the 2nd-worst week of the Great Recession. And remember this: people haven’t just lost their jobs. An estimated 12 million workers and their family members have lost employer-provided health insurance due to COVID-19.

There was a (mostly) positive methodological development with the release of the UI data this week—DOL changed their seasonal adjustment methodology. The way they had been doing seasonal adjustments was causing major distortions during this recession, and the change is a big improvement. One big problem, however, is that they didn’t revise prior seasonally adjusted data, which means you cannot compare seasonally adjusted numbers over time. So, remember this: It’s okay to use the seasonally-adjusted numbers, but if you want to compare UI data over time, use not-seasonally-adjusted numbers.

An example of how to do it wrong: some are saying regular state UI claims dropped by 130,000 last week (from 1.01 million to 881,000). That’s wrong because it’s comparing two seasonally adjusted numbers that were calculated using two different methods (the old way and the new way). Regular state UI claims actually ticked up by 7,600 last week, from 825,800 to 833,400 (using not seasonally adjusted data). Including initial PUA claims, total initial claims rose 159,000 last week, from 1.43 million to 1.59 million.

Figure A combines the most recent data on both continuing claims and initial claims to get a measure of the total number of people “on” unemployment benefits as of August 29. DOL numbers indicate that right now, 30.9 million workers are either on unemployment benefits, have been approved and are waiting for benefits, or have applied recently and are waiting to get approved. But importantly, Figure A is an overestimate of the number of people “on” UI, for two reasons: (1) Some individuals are being counted twice. Regular state UI and PUA claims should be non-overlapping—that is how DOL has directed state agencies to report them—but some individuals are erroneously being counted as being in both programs; (2) Some states are including some back weeks in their continuing PUA claims, which would also lead to double counting (the discussion around Figure 3 in this paper covers this issue well).

Figure A
Figure A

Figure B shows continuing claims in all programs over time (the latest data are for August 15). Continuing claims are more than 27 million above where they were a year ago. However, the above caveat about potential double counting applies here too, which means the trends over time should be interpreted with caution. Further, the large jump in PUA claims was driven almost entirely by an increase in California from 3.1 million August 8 to 5.4 million August 15th. This is a 76% increase, which is such a large jump that I assume it is being caused by an administrative issue.

Figure B
Figure B

Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire at the end of July. Last week was the fifth week of unemployment in this pandemic for which recipients did not get the extra $600. That means most people on UI are now are forced to get by on the meager benefits that are in place without the extra payment, benefits which are typically around 40% of their pre-virus earnings. It goes without saying that most folks can’t exist on 40% of prior earnings without experiencing a sharp drop in living standards and enormous pain.

Earlier this month, President Trump issued a mockery of an executive memorandum. It was supposed to give recipients an additional $300 or $400 in benefits per week. But in reality, even this drastically reduced benefit will be extremely delayed for most workers, is only available for a few weeks, and is not available at all for many. The executive memorandum’s main impact was to divert attention from the desperate need for the real relief that can only come through legislation. Congress must act, but Republicans in the Senate are blocking progress.

Blocking the $600 is terrible on both humanitarian and economic grounds. The extra $600 was supporting a huge amount of spending by people who now have to make drastic cuts. The spending made possible by the $600 was supporting 5.1 million jobs. Cutting that $600 means cutting those jobs—it means the workers who were providing the goods and services that UI recipients were spending that $600 on lose their jobs. The map in Figure B of this blog post shows many jobs will be lost by state now that the $600 unemployment benefit has been allowed to expire. We will get August jobs numbers tomorrow morning, but as of July, we were 12.9 million jobs below where we were before the coronavirus hit, and the unemployment rate is higher than it ever was during the Great Recession. Now isn’t the time to cut benefits that support jobs.

But what about the supposed work disincentive effect of the $600? Rigorous empirical studies show that any theoretical work disincentive effect of the $600 was so minor that it could not even be detected. For example, a study by Yale economists found no evidence that recipients of more generous benefits were less likely to return to work, which is what we would expect to see if the extra payments really were a disincentive to work. And a case in point: in May/June/July—with the $600 in place—9.3 million people went back to work, and a large share of likely UI recipients who returned to work were making more on UI than their prior wage. The extra benefits did not stop them from going back. A job offer is too important at a time like this to be traded for a temporary increase in benefits, and when commentators ignore that, they are ignoring the realities of the lives of working people. Further, there are 11.2 million more unemployed workers than job openings, meaning millions will remain jobless no matter what they do. Dropping the $600 cannot incentivize people to get jobs that are not there.

Dropping the $600 is also exacerbating racial inequality. Due to the impact of historic and current systemic racism, Black and brown communities have seen more job loss in this recession, and have less wealth to fall back on. They are taking a much bigger hit with the expiration of the $600. This is particularly true for Black and brown women and their families, because in this recession, these women have seen the largest job losses of all. The Senate must come back from vacation and extend the UI provisions of the CARES Act, both to provide relief to the jobless and to the bolster the broader economy.

]]>
What to Watch on Jobs Day: Widespread economic pain continues in August http://www.28sanzai.cn/blog/what-to-watch-on-jobs-day-widespread-economic-pain-continues-in-august/ Wed, 02 Sep 2020 14:57:55 +0000 http://www.28sanzai.cn/?post_type=blog&p=207667 Rent was due again this week and millions of unemployed workers have now gone five weeks without the enhanced $600 unemployment insurance benefit. This benefit was a vital lifeline and families across the country now face eviction and hunger in its absence. The drop in benefits will also make it far harder in coming months to claw back the jobs lost during the pandemic. As of the latest data, the labor market remains 12.9 million jobs below where it was in February, before the pandemic spread. And, the job gains we saw this summer slowed down remarkably in July, as a resurgence of the coronavirus re-shuttered part of the country. On Friday, the latest jobs data will tell us about the state of the labor market for August and how workers continue to fare in these difficult times.

Time and time again we learn how the recession has magnified the economic disparities many face in the U.S. labor market, whether it be by race, ethnicity, gender, age, education, or class. Women workers were disproportionately affected at the beginning of the recession with job losses in excess of their share of the workforce. In particular, Latina workers saw their unemployment rates skyrocket, exceeding 20% in March. Black workers also experienced devastating job losses, which they were less able to weather because of historical inequalities in employment, wages, and incomes, and, in particular, lower levels of liquid savings to fall back on. Black workers are also more likely to be unemployed. Historically, Black workers have been less likely to receive unemployment benefits after losing a job. However, the expanded eligibility criteria included in the CARES Act has been a great equalizer in the current downturn—though these expanded criteria will cut off at the end of this year. Further, as shown in the figure below, Black men have yet to see much in the way of job gains in the recovery thus far. Young workers are also experiencing unprecedented levels of unemployment, and will likely face significant aftershocks from starting their careers at such a difficult time (more on this in a forthcoming EPI report).

The economic disparities were laid bare as we saw how millions of workers were faced with the impossible choice to leave their jobs or risk their health. How millions of workers lack the basic labor standard to take paid sick days to care for themselves and protect the health of their coworkers and customers. How many workers have been forced to work without necessary protective gear. During the pandemic, unionized workers have been much more able to secure enhanced safety measures, additional premium pay, paid sick time, and a say in the terms of furloughs or work-share arrangements to save jobs. Unfortunately, most workers in the U.S. have not had the benefit of such a mechanism to collectively bargain because policymakers and employers have made it more and more difficult for workers to unionize, despite the fact that there’s widespread interest in a union among nonunion workers.

While we must rely on public health officials to determine when it’s safe to re-open, policymakers can take many actions to relieve the economic pain workers and their families are facing across the country. Obviously, it should be a priority for Congress to reinstate the $600 enhanced UI benefit. This isn’t only vital for workers, but also will help bolster the economy and create jobs. Federal policymakers also need to provide fiscal relief to state and local governments so they can continue to provide necessary services and prevent unnecessary cuts to their budgets as their revenue falls in the face of the historically large shutdown in economic activity. In fact, they could do one better and increase public-sector employment through the hiring of additional public health workers and contact tracers. Further, the current challenges to schools require more, not less, education staff in coming months.

On Friday, we will get a better picture of what happened for workers across the country in August. I’m particularly interested to see whether the recovery has gained any traction, particularly for historically disadvantaged groups. Next month, we will dive deeper into what’s happened as school resumed—in person or virtually—and what that has meant for teacher employment as well as parents struggling to make ends meet with financial and time constraints.

]]>
Calling out anti-Blackness in our response to police violence and economic inequality http://www.28sanzai.cn/blog/calling-out-anti-blackness-in-our-response-to-police-violence-and-economic-inequality/ Wed, 02 Sep 2020 13:52:11 +0000 http://www.28sanzai.cn/?post_type=blog&p=207608 The Black community has faced a long history of racial exclusion, discrimination, and inequality in the United States, causing these families to shoulder unequal economic and health burdens.

We must address anti-Blackness in our society and center Black women and their communities in our policies.

That was the resounding message from a panel of Black and brown women—leading economic and social justice experts—on creating lasting change. These women spoke in June at the Economic Policy Institute’s webinar, Rebuilding the House That Anti-Blackness Built in Our COVID Response, after the police murder of George Floyd.

Their words resonate today, as the nation continues to grapple with its history of systemic racism, inequities, and injustice, following the police shooting of Jacob Blake in Kenosha, Wisconsin.

The panel, moderated by EPI Director of EARN Naomi Walker, included:

  • Anne Price, Insight Center
  • Jaribu Hill, Mississippi Workers’ Center for Human Rights
  • Jhumpa Bhattacharya, Insight Center
  • Julianne Malveaux, Economic Education
  • Rhonda Sharpe, Women’s Institute for Science, Equity, and Race
  • Valerie Wilson, Economic Policy Institute

Here are some key moments from the discussion:

Naomi Walker: “Black people in this country face physical and economic violence every day, and all of this is taking place in the midst of a stunning—though not surprising—lack of leadership from the highest office in the land.”

Why should we address anti-Blackness in our society, in our research, and in our advocacy?


Julianne Malveaux: “These murders are consistent with murders that have happened as long as we’ve been here in this country. You don’t have to go to 2020. You can start at 1892, when Ida B. Wells documented a lynching of her friend, who had the nerve to start a grocery store on the same block that a white man had one. The long end of that short story was the white man was able to acquire the Black man’s store for eight cents on the dollar. Eight cents on the dollar. And we can talk about Wilmington, North Carolina, in 1898, when the anecdotal evidence was that ‘the river ran red.’ They said there were 60 or 70 dead people. Now, they’re finding it was 600 or 700. And then, of course, there’s Tulsa. Why is this all connected? It’s connected because in our psyches there is a block in terms of how we participate, how we manage, [and] what we do.”

Why is it important to talk about Black people when discussing the economic and health impact of both the pandemic and economic crisis?


Jaribu Hill: “Language is important. Over the last few days, we have heard some outlandish descriptions of what’s happening to our people, from ‘senseless rioting’ [and] ‘destroying things,’ but no one talked about the lynching by the knee. No one talked about how, with impunity, agents of the state who hide behind tin badges always, always, always get away with murdering Black people. You add that to—you match that up with—those who are dying in COVID beds disproportionately to those who have been dying in the streets since we were dragged over here as a result of a felony kidnapping, and it just makes you know that you’ve got to keep your rage. You’ve got to keep your rage. You can never let your rage down. I don’t even say ‘guard down.’ I say, ‘Never let your rage down.’”

What is the importance of language when discussing systemic racism?


Anne Price: “What we’re really talking about is the devaluation and disposability of Black lives. That’s what brings these all together—the convergence of police brutality, of policing Black bodies, and the negligence that we’ve seen in terms of COVID and Black people.”

What does “anti-Blackness” mean, in terms of the current health, economic, and political crises?


Rhonda Sharpe: “When you center on Black women—the most vulnerable—and you create policies that are focused on the most vulnerable, i.e., Black women, then you will get policies that lift everyone.”

Why is it important to focus on Black women when discussing anti-Blackness?


Jhumpa Bhattacharya: “There is something very specific about anti-Blackness. There is something very definitive about anti-Blackness that I think needs to be named. We’re seeing that now, in particular with what’s happening in our country. As women of color, if we don’t acknowledge the specificity of anti-Blackness, we’re actually doing a disservice and we’re contributing to it. One [step] is to really pause and examine the way in which our own communities are perpetuating anti-Blackness. The second thing is to center Black people in our policies, in our institutions, and our decision-making.”

How can other women of color address anti-Blackness and support Black women?


Valerie Wilson: “The laws that we have in place—and have for decades—there’s a real problem with enforcement there. This, again, gets to this issue related to power and representation and someone’s ability to really stand up and try to enact or call in the rights that on the books are ours, but in practice, we don’t see. That’s a lot of what’s behind the uprisings that we’re seeing in the streets. People keep saying, ‘Go through the system, follow the system, file this complaint. Do this, do that,’ and nothing happens. That’s because we have things on the books, but the way that they actually play out and actually work in real life, there’s very little teeth behind that, at all. We really need to change the way that we structure policy and the way that we enforce those laws and policies.”

What role does policy play in perpetuating anti-Blackness?

These videos are excerpts from the event. To see the full video, click here.

]]>
The Milwaukee Bucks’ strike shows what’s possible when workers band together http://www.28sanzai.cn/blog/the-milwaukee-bucks-strike-shows-whats-possible-when-workers-band-together/ Mon, 31 Aug 2020 17:45:47 +0000 http://www.28sanzai.cn/?post_type=blog&p=207521 Typically, workers strike over pay or benefits, or to protest their employer’s violation of labor law. But last week, NBA players for the Milwaukee Bucks refused to take part in a playoff game against the Orlando Magic to protest the police shooting in Kenosha, Wisconsin of Jacob Blake, an unarmed Black man who was shot multiple times in front of his children and was handcuffed to his hospital bed. The Milwaukee Bucks players’ actions sparked a movement within the NBA and larger sports community, with athletes from the WNBA, Major League Baseball, and Major League Soccer following suit in solidarity, causing games to be postponed in their respective leagues. On an unprecedented day in sports history, these athletes showed the power of workers’ collective voice in the workplace.

Professional athletes aren’t the only workers who have banded together to make their voices heard. During the coronavirus pandemic, thousands of essential workers have utilized their right to engage in concerted activity by protesting unsafe working conditions. This was most evident by the walkouts organized by Amazon, Instacart, and Target workers as well as the dozens of strikes organized by fast food and delivery workers earlier this spring. Even before the pandemic, data from the Bureau of Labor Statistics showed an upsurge in major strike activity in 2018 and 2019, marking a 35-year high for the number of workers involved in a major work stoppage over a two-year period. The resurgence of strike activity in recent years has given over a million workers an active role in demanding improvements in their pay and working conditions.

Figure A
Figure A

The Milwaukee Bucks showed that when workers organize and use their collective power, they can create change in their workplace, their industry, and society. However, the erosion of workers’ rights over the last several decades have made it difficult for workers to come together and engage in collective action. When workers are able to join together in a union, they are able to tackle some of the biggest problems that plague our economy, including growing economic inequality and racial and gender inequities. Policymakers must enact reforms that promote workers’ collective power, which in turn can create a more just economy and democracy.

]]>
Updated state unemployment data: Congress has failed to act as jobless claims remain high and workers scrape by on inadequate unemployment benefits http://www.28sanzai.cn/blog/updated-state-unemployment-data-congress-has-failed-to-act-as-jobless-claims-remain-high-and-workers-scrape-by-on-inadequate-unemployment-benefits/ Fri, 28 Aug 2020 12:00:45 +0000 http://www.28sanzai.cn/?post_type=blog&p=207319 The?most recent unemployment insurance (UI) claims data?released on Thursday show that another?1.4 million people?filed for UI benefits?last week.?For the past four weeks, workers have?gone without the?extra?$600 in weekly UI?benefits—which Senate Republicans allowed to expire—and are instead?typically receiving around 40% of their pre-virus earnings. This is?far too?meager to sustain workers and their families through?lengthy periods of joblessness.

In a largely unserious stunt, the?Trump administration has?issued?an executive order?that,?at best,?will?slash the benefit in half?to $300.?On its own,?this cut?will?cause such a huge drop in spending that it will?cost 2.6 million jobs?over the next year. In addition to being woefully insufficient,?this aid?will?take many weeks?to reach?jobless workers,?exclude low-wage?workers, and only last through September?with its current funding.?Furthermore, it is distracting from the dire need for?Congressional action to strengthen UI benefits.

To give a sense of how many workers the Trump administration and Republicans in?Congress?are leaving behind,?Figure A?shows the share of workers in each state who either made it through at least the first round of state UI processing (these are known as “continued” claims) or filed initial UI claims in the following weeks. The map includes separate totals for regular UI and Pandemic Unemployment Assistance (PUA), the new program for workers who aren’t eligible for regular UI, such as gig workers.

The map also includes an estimated “grand total,” which includes other programs such as Pandemic Emergency Unemployment Compensation (PEUC), Extended Benefits (EB), and Short-Time Compensation (STC). The vast majority of states are reporting that more than one in 10 workers are claiming UI. Ten states and the District of Columbia report that more than one in five of their pre-pandemic labor force is now claiming UI under any of these programs. The components of this total are listed in?Table 1.1

Three states had more than 1 million workers either receiving regular UI benefits or waiting for their claim to be approved: California (3.1?million), New York (1.5 million), and Texas (1.2?million).?Three?additional states had more than half a million workers receiving or awaiting benefits: Pennsylvania, Illinois, and Georgia.

Figure A also displays the numbers of workers in each state who are receiving or waiting for regular UI benefits as a share of the pre-pandemic labor force in February 2020. In four states and the District of Columbia, more than one in seven workers are receiving regular UI benefits or waiting on their claim to be approved: Hawaii (18.3%), the District of Columbia (16.4%), California (15.8%), New York (15.8%), and Nevada (14.8%).

Nine states reported that more than one in 10 workers are currently claiming PUA:?California (18.0%), Rhode Island (17.6%), Kansas (16.8%), Hawaii (15.1%),?Pennsylvania (15.1%), Michigan (14.5%), New York (14.3%), Massachusetts (13.4%),?and?Arkansas (10.9%).?This?underscores?the importance of extending benefits to those who would otherwise not have been eligible, including self-employed?and?low-wage?workers and people who are looking for part-time work.

Figure A
Figure A

With the pandemic and economic crisis persisting through the summer, workers have been experiencing long-term unemployment. As a result, workers are increasingly relying on PEUC, the 13 additional weeks of benefits available to workers who have exhausted the 26 weeks of regular benefits. However, even the cumulative 39 weeks of benefits have not been enough for some workers, so policymakers should extend the valuable PEUC program.?During the week?ending August 8,?PEUC claims increased by more than 100,000 nationwide, as did claims under the?Extend Benefits?program, which provides another 13 weeks of benefits to workers?(after PEUC is exhausted)?in states that meet a threshold of high unemployment. Currently, the requirements for this program have been triggered in every state, meaning that workers who have exhausted PEUC can turn to the Extended Benefits program. There are now?203,188?workers claiming Extended Benefits, the highest number so far this recession.

As we look at the aggregate measures of economic harm, it is also important to remember that this recession is deepening racial inequalities. Black communities are suffering more from this pandemic—both physically and economically—as a result of, and in addition to, systemic racism and violence. Both Black and?Latinx?workers are more likely than white workers to be?worried about exposure?to the coronavirus at work and bringing it home to their families, and?Latinx?workers face higher death rates?from?COVID-19?than white workers. Cutting off the $600 UI benefit will deepen existing racial inequalities, since Black and?Latinx?workers have?higher unemployment rates?than white workers.

In addition to extending the additional weekly $600 benefit that they have allowed to expire, Congress should provide?substantial aid?to state and local governments, where some?workers?have already?lost their jobs. Without this aid, a?prolonged depression is inevitable, especially if state and local governments make the same?budget?and?employment?cuts that slowed the recovery after the Great Recession. More than 5 million workers would likely lose their jobs by the end of 2021, harming?women and Black workers?in particular since they are disproportionately likely to work for state and local governments.

Where policymakers have?failed,?workers have demonstrated their power to come together?and advocate for the common good, whether they are?ensuring that essential workers?receive the proper protective equipment?or?going on strike?to?protest the police shooting of Jacob Blake.?Unions allow workers to better their working conditions and strengthen their collective political voice,?but?many essential jobs are not unionized and these workers are at an even greater risk. Congress should?pass policies that bolster unions?in?both the public and private sector.?And?in the long term, they must?strengthen the institutions that allow us, collectively, to promote the general welfare, including unemployment insurance,?public health insurance, and unions.

Table 1
Table 1

Notes

1. That total is more of an upper bound, and you should exercise caution when interpreting it for three reasons: (1) It includes initial claims, which represent people who have not yet made it through the first round of processing; (2) Some individuals may be being counted twice. Regular state UI and PUA claims should not be overlapping—that is how the Department of Labor (DOL) has directed state agencies to report them—but some states may be misreporting; (3) Some states are likely including some back weeks in their continuing PUA claims, which would also lead to double counting (the discussion around Figure 3 in?this paper?covers this issue well). Those limitations are the reason that we have so far hesitated to publish this estimate of total claims by state. DOL has worked to overcome misreporting issues and has had enough success that we are now comfortable enough to report the totals here. However, it is clear that there is still some misreporting. Unless otherwise noted, all numbers are as reported by DOL.

Enjoyed this post??Sign up for the Economic Policy Institute’s newsletter?so you never miss our research and insights on ways to make the economy work better for everyone.

]]>
UI claims remain historically high and the president’s executive memorandum is doing more harm than good: Congress must reinstate the extra $600 http://www.28sanzai.cn/blog/ui-claims-remain-historically-high-and-the-presidents-executive-memorandum-is-doing-more-harm-than-good-congress-must-reinstate-the-extra-600/ Thu, 27 Aug 2020 14:00:13 +0000 http://www.28sanzai.cn/?post_type=blog&p=207252 Last week 1.4 million workers applied for unemployment insurance (UI) benefits. Breaking that down: 822,000 applied for regular state unemployment insurance (not seasonally adjusted), and 608,000 applied for Pandemic Unemployment Assistance (PUA). Some headlines this morning are saying there were 1.0 million UI claims last week, but that’s not the right number to use. For one thing, it ignores PUA, the federal program that is serving millions of workers who are not eligible for regular UI, like the self-employed. It also uses seasonally adjusted data, which is distorted right now because of the way Department of Labor (DOL) does seasonal adjustments. One bit of good news is that with today’s release, DOL announced that starting next week, they will be changing the way they do seasonal adjustments. The change should address the issues that have plagued seasonally adjustments during this pandemic.

Republicans in the Senate allowed the across-the-board $600 increase in weekly UI benefits to expire. Last week was the fourth week of unemployment in this pandemic for which recipients did not get the extra $600. That means people on UI are now are forced to get by on the meager benefits that are in place without the extra payment, benefits which are typically around 40% of their pre-virus earnings. It goes without saying that most folks can’t exist on 40% of prior earnings without experiencing a sharp drop in living standards and enormous pain.

Earlier this month, President Trump issued a joke of an executive memorandum. It was supposed to give recipients an additional $300 or $400 in benefits per week. But in reality, even this drastically reduced benefit will be extremely delayed, is only available for a few weeks, and is not available at all for many. The executive memorandum is a false promise that actually does more harm than good because it diverts attention from the desperate need for the real relief that can only come through legislation.

This is cruel, and terrible economics. The extra $600 was supporting a huge amount of spending by people who now have to make drastic cuts. The spending made possible by the $600 was supporting 5.1 million jobs. Cutting that $600 means cutting those jobs—it means the workers who were providing the goods and services that UI recipients were spending that $600 on lose their jobs. The map in Figure B of this blog post shows many jobs will be lost by state now that the $600 unemployment benefit has been allowed to expire. We remain 12.9 million jobs below where we were before the virus hit, and the unemployment rate is higher than it ever was during the Great Recession. Now isn’t the time to cut benefits that support jobs.

Last week was the 23rd week in a row that initial unemployment claims were far greater than the worst week of the Great Recession. If you restrict this comparison just to regular state claims—because we didn’t have PUA in the Great Recession—last week was the 23rd week in a row that initial claims have been greater than the third-worst week of the Great Recession. And initial claims (including both regular state benefits and PUA) have risen in the last two weeks. This is not the direction we want to be seeing 23 weeks into this crisis.

Though initial claims have risen the last 2 weeks, they’re below where they were when the $600 expired. Some are wondering if that decline was a result of the $600 running out. The answer to that is an emphatic no. Initial claims remain historically high, but they have been fairly steadily dropping since their peak in early April, and what has happened since the $600 expired is just a continuation of those trends.

In other words, the $600 was not the reason people were applying for unemployment insurance and it is not what was keeping people out of work. In fact, rigorous empirical studies show that any theoretical work disincentive effect of the $600 was so minor that it could not even be detected. For example, a study by Yale economists found no evidence that recipients of more generous benefits were less likely to return to work, which is what we would expect to see if the extra payments really were a disincentive to work. And a case in point: in May/June/July—with the $600 in place—9.3 million people went back to work, and a large share of likely UI recipients who returned to work were making more on UI than their prior wage. The extra benefits did not stop them from going back. A job offer is too important at a time like this to be traded for a temporary increase in benefits, and when commentators ignore that, they are ignoring the realities of the lives of working people. Further, there are 11.2 million more unemployed workers than job openings, meaning millions will remain jobless no matter what they do. Dropping the $600 cannot incentivize people to get jobs that are not there. Even further, many people are simply unable to take a job right now because it’s not safe for them or their family, or because they have care responsibilities as a result of the virus. Dropping the $600 cannot incentivize them to get jobs, it is just causing hardship.

Dropping the $600 is also exacerbating racial inequality. Due to the impact of historic and current systemic racism, Black and brown communities have seen more job loss in this recession, and have less wealth to fall back on. They are taking a much bigger hit with the expiration of the $600. This is particularly true for Black and brown women and their families, because in this recession, these women have seen the largest job losses of all.

Figure A combines the most recent data on both continuing claims and initial claims to get a measure of the total number of people “on” unemployment benefits as of August 22. DOL numbers indicate that right now, 28.8 million workers are either on unemployment benefits, have been approved and are waiting for benefits, or have applied recently and are waiting to get approved. But importantly, Figure A provides an upper bound on the number of people “on” UI, for two reasons: (1) Some individuals may be being counted twice. Regular state UI and PUA claims should be non-overlapping—that is how DOL has directed state agencies to report them— but some individuals may be erroneously counted as being in both programs; (2) Some states are likely including some back weeks in their continuing PUA claims, which would also lead to double counting (the discussion around Figure 3 in this paper covers this issue well).

Figure A
Figure A

Figure B shows continuing claims in all programs over time (the latest data are for August 8). Continuing claims are more than 25 million above where they were a year ago. However, the above caveat about potential double counting applies here too, which means the trends over time should be interpreted with caution.

Figure B
Figure B
]]>
The Way Out Through State and Local Aid: Bipartisan group of economists breaks down why local governments need aid now http://www.28sanzai.cn/blog/state-and-local-aid-bipartisan-economists-video/ Tue, 25 Aug 2020 15:56:35 +0000 http://www.28sanzai.cn/?post_type=blog&p=206988 If a bipartisan group of the nation’s top economists were trapped in an elevator with Republican members of Congress, what would they tell them about the need for state and local aid?

Towns across the country are already hemorrhaging red ink, and substantial federal aid is needed now in order to derail the worsening economic shock brought on by the pandemic.

That was the consensus among economists the Economic Policy Institute brought together recently to discuss the urgent need for state and local aid.

The panel included:

  • Gbenga Ajilore, Senior Economist, Center for American Progress
  • Glenn Hubbard, Dean Emeritus and Russell L. Carson Professor of Finance and Economics, Columbia University
  • Jason Furman, Professor of the Practice of Economic Policy, Harvard Kennedy School and Harvard University Economics Department
  • Josh Bivens, Director of Research, Economic Policy Institute
  • Mark Zandi, Chief Economist, Moody’s Analytics

Heather Long, Economics Correspondent at the Washington Post, was the moderator and she asked each economist: “if you had 30 seconds in an elevator with a Republican lawmaker to try to convince them why we need state and local aid now, what would you say?”

Here’s what they said.

Gbenga Ajilore’s elevator pitch: “I’m going to start with a meme. I’m going to say that the best time to pass state and local aid was three months ago, when we saw millions of jobs being lost. The second best time is right now. And the reason why is that there was $150 billion given to states, $30 billion given to localities, in the CARES Act, but a lot of that was restricted.

“And the other thing was that rural areas were left out of it. The $30 billion only went to places that have 500,000 people or more. And so for rural areas, we need state and local aid now so that they get the money, especially given what’s coming up in the fall between schools and further cases.”

How important is it to specify what the aid would be used for?


Glenn Hubbard’s elevator pitch: “I actually do spend time with Republican lawmakers, not on an elevator anymore, but on Zoom, about this issue, and I make three points. One, we should have learned from the Great Recession, from the financial crisis, the very large cost of failing to come through enough for state and local governments.

“Second is about payroll. There’s recent research suggesting that every dollar of additional state aid would support at least $0.30 more payroll from state and local workers, including essential workers.

“And the third is, [in order] to get from here to there—meaning to where the economy is going to be after the pandemic—we need to focus on education and training, and a lot of that is done in public universities and community colleges. This is not the time to be cutting support for those organizations. All in, I think support of at least $500 billion in a block grant is needed.”

What if significant aid for states and local governments doesn’t materialize?


Jason Furman’s elevator pitch: “So I would just say listen to Glenn. That’s two seconds. For every dollar we spend on state and local assistance, it adds probably $1.70 to the size of the overall economy. There’s nothing that economists have studied better and more carefully when it comes to fiscal policy multipliers, probably, than state and local assistance.

“And finally, if we want to have an economy, we need to have the best shot at doing the best we can with schools. That’s going to cost money. You don’t spend that money, you don’t have kids in school, you don’t have parents working, you don’t have any of the things that all of us want to have economically and otherwise.”

Should there be restrictions on how the aid is used?

Josh Bivens’ elevator pitch: “We should learn the lesson of what happened after the Great Recession, when state and local governments—once the Recovery Act aid to states ran out—their spending became a tremendous drag on growth, made that recovery take far longer than it should have.

“If you look at the second quarter of this year, sales taxes for state and local governments fell at a 16 percent annualized rate. We’ve probably seen Medicaid enrollments rise by about five million between February and July. The budget crunch is already happening for state and local governments. They’re making plans for next year about what they’re going to do with their budgets. We should give them aid so part of those plans are not just cutting everything in sight in order to make their budgets balance.”

Why are states facing this crisis, and how much in aid is needed?


Mark Zandi’s elevator pitch: “So after that, I think everyone should be convinced in that elevator. Clearly, the economy is struggling. We have double-digit unemployment. We’re still down 13 million jobs from the pre-pandemic peak. State and local governments are hemorrhaging red ink, and it’s coast to coast, it’s politically ecumenical. Every state, municipality, is struggling and responding by slashing payrolls. We’re down 1.3 million state and local government jobs since February, slashing programs.

“There’s no more effective way to help the economy and to help these states and support these jobs than providing federal government aid to state and local governments. And this is not anything that’s unusual. This is tried and true economic support. This is what we do every time we get into a recession, particularly in one like this one, and it’s pretty much a slam dunk, pretty straightforward kind of economic policy.”

How much aid is needed?

]]>
91视频在线