On October 2, the Bureau of Labor
Statistics issued the last unemployment report we will see after the
election. Based on this report, Congress and the Senate must pass the
HEROES Act that would give individuals, cities, and states
much-needed relief from the corona recession, which continues. Some
would say we don’t need those funds because we are in the
middle of an economic recovery, but winter is coming. COVID is
currently unchecked in ten states or territories, and close to
containment in only four – Alaska, American Samoa, the Virgin
Islands, and Vermont.
With
more people gathering inside during the winter, we are likely to see
more COVID cases. We are not prepared. There seems to have been some
progress in developing a vaccine, but most experts say the vaccine
will not be widely available until mid-2021. Winter also ushers in
the flu season, and hundreds of thousands of people need flu shots
and may not be able to get them. While the flu is neither as
contagious nor as lethal as COVID, God bless the person who gets them
both! Without a vaccine, the coming of winter puts pressure on small
business owners and others and will have some economic consequences.
In
September, unemployment dropped from 8.4 percent to 7.9 percent,
which seems like progress until you realize that the drop in the
unemployment rate happened because almost 700,000 people dropped out
of the labor market. The lower unemployment rate means that things
are getting better for fewer people. The long-term unemployed, who
have been out of work for more than half a year, has increased to 2.4
million. Of course, unemployment rate differentials remain. The
unemployment rate was 7 percent for whites and 12.1 percent for
African Americans. While that unemployment rate gap is as constant as
structural racism, it is frustrating to find policymakers behaving as
though Black unemployment is supposed to be higher than the white
rate. Otherwise, why have Democratic and Republican leaders done
little or nothing to address that gap and close it?
Ten
million fewer Americans had jobs in September than in pre-COVID
February, and just last week, two airlines said they would lay off
32,000 people. If the HEROES Act does not pass, there may be even
more without work. States and local governments are laying people off
because they don’t have the revenue stream they projected at
the beginning of the fiscal year. Public servants will be cut –
teachers, municipal workers, transportation services, sanitation
services, and other services. And the pace of job creation is slowing
– in July, the economy generated 1.78 million new jobs; in
August, 1.49 million. Last month the economy created only 661,000 new
jobs, less than half as many as the previous month. If there was a
job creation momentum, it is slowing.
Congress
can prevent this by passing the HEROES Act. While House Speaker Nancy
Pelosi, negotiating for the Democrats, has trimmed the Democratic
request from $3 trillion to $2.2 trillion, Treasury Secretary Mnuchin
seems less flexible, offering $1.6 trillion. They say they are moving
closer to an agreement. Tell that to someone who doesn’t have a
paycheck.
Just
like the coronavirus has hit people unevenly by race and income, so
has the economic downturn. Those with more income recover more
quickly and hurt less, but the lower-income people recover far more
slowly. One in five of the workforce is teleworking. How many are
low-income people?
Business
on Capitol Hill goes on as usual, except for the fact that so many
Senators have been exposed to COVID (along with the President and
close advisors) that they will not do any legislative work until
October 19. However, they may still hold hearings on Amy Comey
Barrett, who 45 has nominated to the Supreme Court. Mitch McConnell
will rush through confirmation for Barrett, but slow-walk aid for
others. His priority is partisan control, not the people.
Partisanship
won’t do much for McConnell if the confluence of winter, job
loss, and COVID hit the economy. Legislators were surprised by COVID
and its economic impact in March. If they ignore this now, with the
coming storm, it’s because they really don’t care.
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