Consequences Of Inadequate Action By Congress
Above: Economic Collapse from Return of Kings.
Deeper Economic Collapse, Lost Jobs.
Without federal aid to state and local governments, millions of jobs in the public sector will be lost by the end of 2021, severely impacting Black workers, women, and veterans, who are disproportionately employed in these jobs. Additional jobs will be lost—in both the private and public sectors—if Congress fails to reinstate the $600 weekly unemployment benefit that expired last week. EPI experts weigh in on what could happen if Congress fails to act to prevent further economic shock.
The coronavirus shock was historically large—and the bounceback has already likely stalled
Commerce Department data released last week confirmed what everybody already knew: Gross domestic product collapsed faster in the second quarter of 2020 than it has in any other recorded quarter of U.S. history. These data show the utterly enormous scale of recovery the economy needs to mount before it is anywhere close to healthy. And the reality may be even worse: The quarterly data mask important intra-quarter trends, and they miss troubling developments in the month of July, which we won’t see until the next quarterly data release. Congress and the president need to restore the extra $600 in unemployment insurance, for as long as the job market remains damaged and need to provide large-scale, flexible aid to state and local governments to keep the coming revenue shortfalls facing these governments from translating into spending cuts and austerity that will starve U.S. households of needed help and drag on recovery in coming months. Read the economic indicator
UI claims and GDP growth are historically bad
In the week ending July 25, two million workers applied for unemployment insurance (UI) benefits. Breaking that down: 1.2 million applied for regular state unemployment insurance, and 830,000 applied for Pandemic Unemployment Assistance (PUA). Republicans in the Senate just allowed the across-the-board $600 increase in weekly UI benefits to expire and are proposing to (essentially) replace it with a $200 weekly payment. That $400 cut in benefits is not just cruel, it’s terrible economics. These benefits are supporting a huge amount of spending by people who would otherwise have to cut back dramatically. The spending made possible by the $400 that the Senate wants to cut is supporting 3.4 million jobs. If you cut the $400, you cut those jobs. Read the blog post
State and local governments have lost 1.5 million jobs since February
The monthly national jobs report from the Bureau of Labor Statistics (BLS) showed that the economy added 4.8 million jobs in June, after many states reopened their economies prematurely and accelerated the spread of COVID-19. Despite this uptick in employment, there are still 14.7 million fewer jobs than before the pandemic hit. Of these losses, 1.5 million were in state and local government—a sector that disproportionately employs women and Black workers. In mid-July, BLS released its June state-level jobs report, allowing us to take a closer look at these public-sector losses across the country, as seen in this interactive map. Read the blog post
The Senate’s failure to act on federal aid to state and local governments jeopardizes veterans’ jobs
Last week, the Republican-controlled Senate and White House rolled out the HEALS Act, which not only guts Pandemic Unemployment Assistance benefits for millions of unemployed workers, but also completely overlooks critical federal aid to state and local governments. This intentional oversight threatens vital public services just when they are needed most and could result in an additional 5.3 million public- and private-sector service workers losing their jobs by the end of 2021. More than one million veterans—13.2% of all veterans—work for state and local governments and could be severely impacted by the Senate’s failure to provide timely federal aid. Black workers, who are heavily represented in the overall public-sector workforce, are even more heavily represented among state and local government workers who are veterans. While Black workers make up 12% of the private-sector and 14% of the public-sector workforces, they make up 17% of public-sector workers who are veterans. Read the blog post