The unemployment rate is not the right measure to make economic policy decisions around the coronavirus-driven recession: Policymakers should use the employment rate to continue or stop economic assistance [feedly]

The unemployment rate is not the right measure to make economic policy decisions around the coronavirus-driven recession: Policymakers should use the employment rate to continue or stop economic assistance
https://www.epi.org/blog/the-unemployment-rate-is-not-the-right-measure-to-make-economic-policy-decisions-around-the-coronavirus-driven-recession/

Policymakers often use the unemployment rate to trigger when to turn on or turn off financial assistance in economic downturns and recoveries. The unemployment rate, however, is a bad choice for a policy trigger in the current pandemic-driven recession.

A large share of workers who lose their jobs in the coming weeks and months will very likely not be counted in the official unemployment rate because they won't be actively looking for work. Given the nature of the pandemic, where we are all being told to stay away from work and all non-essential public activity, many laid-off workers will make the rational decision not to search for work until they get the all-clear from public health authorities.

Think of the restaurant worker who just got laid off. They might not report looking for work because that whole sector is shut down. What would be the point in actively looking for a job when it's clear that there are none out there?

Instead of using the unemployment rate as a trigger-off mechanism, policymakers should use the employment rate—the share of the adult population with a job.

This is how the economy looked before the pandemic hit the United States. (Please note: All figures are simply for illustrative purposes and are not drawn to scale.) In February 2020, the employment rate was 61.1% and the unemployment rate was 3.5%. The group economists call "not in the labor force" is composed of people who don't have a job now and haven't looked recently. Many in this group are going to school, unable to work for health reasons, retired, have caregiving responsibilities, or are not working for a host of other reasons.

Then the pandemic hits and—depending on the GDP projections used—an estimated 3 to 14 million jobs will be lost. For this exercise, let's take a rough midpoint estimate of 10 million jobs lost by June. All of this is going to happen very quickly, much more quickly even than what happened during the Great Recession. There are new reports of layoffs every day and we saw just the tip of the iceberg in yesterday's unemployment insurance claims. The red bar (shown below) represents these 10 million workers who have been laid off. How are they going to be counted in the employment statistics? And, again, this is vital because these statistics are the ones that are typically used to trigger when help is no longer needed for people throughout the country.

There are a couple of options of where those laid-off workers can get counted. The figure below shows the two extremes.

In the first bar, the laid-off workers get counted among the unemployed, swelling the ranks of the unemployed by nearly threefold. Again, the illustrations are not drawn to scale, but as of February 2020, there were about 5.8 million unemployed workers in the economy. If we add a reasonable estimate of 10 million laid-off workers to the ranks of the unemployed, the unemployed number will swell to about 16 million. This translates into an unemployed rate of 9.6%, significantly higher than the pre-pandemic rate of 3.5%.

But, remember, workers are only officially counted as unemployed if they are actively searching for a job. This pandemic-driven recession is highly unusual and many laid-off workers are not only seeing jobs cut, but entire sectors decimated. What would be the point in looking for a new job when there are no job openings?

The second stacked bar in the figure below shows those laid-off workers getting counted as out of the labor force. Those workers may believe—and they'd mostly be right—that there are no opportunities for them in the labor force in the immediate future, so dropping out until the "curve is flattened" is the most reasonable alternative. In this case, they would not get counted among the unemployed, and policymakers may incorrectly believe that the labor market is functioning much better than it really is. If none of the newly out of work searched for a new job, the unemployment rate would stay at 3.5% and the policy triggers would be none the wiser.

Now, take a look at that figure again. What's consistent in both sets of bars? The share of the employed doesn't change, regardless of how those laid-off workers get counted. Recall that in the pre-pandemic economy, the employment rate—also known as the employment-to-population ratio—is 61.1%. If an estimated 10 million workers lose their jobs in the near term, the employment rate will fall by about 3.8 percentage points to 57.3%. A reasonable trigger-off point could be when the employment rate climbs back up to within a half a percentage point of the pre-pandemic rate, meaning aid and stimulus should still be flowing at least up until the employment rate climbs back up to 60.6%.

Clearly, the employment rate would be a better measure of labor market strength than the unemployment rate to determine when workers and their families are back to pre-pandemic labor market conditions. And, in some ways, this also may understate labor market weakness because this leaves out the fact that many workers are not only getting laid off, but are actually having their hours cut. To measure this, we can turn to two different metrics in the employment statistics. The first is to look at those who are working part-time for economic reasons and the second is to look at total work hours in the economy.

Let's start with part-time for economic reasons, also known as involuntary part-time. This refers to workers who are working fewer hours than they want for a variety of reasons, including unfavorable business conditions at their current job, the inability to find full-time work, seasonal declines in demand, and slack work. Pre-pandemic involuntary part-time was at 4.3 million workers. This is in line with pre-Great Recession levels: The average level of part-time for economic reasons, for example, was 4.4 million in 2007. It doubled in two years to 8.9 million in 2009. It is likely that the pandemic will significantly increase the number of workers who remain working—and therefore won't be counted among the job losses—but will still be experiencing significant losses in wages and incomes.

Total work hours in the labor market is another way to get at both job losses and cuts in work hours. The Bureau of Labor Statistics creates a measure of aggregate weekly hours each month indexed to 2007 levels. Between 2007 and 2009, aggregate work hours fell by a whopping 7.5%. A large reduction in work hours is also expected in this pandemic-driven recession as workers are laid off and their hours are reduced.

Both of these are important metrics to measure labor market weakness on top of total job losses, and they should be tracked closely and even be considered as potential policy triggers instead of, or in addition to, the employment rate. At a minimum, policymakers should steer clear of unemployment rate-related triggers and use the employment rate to assess the continued need for support to workers and their families and other stimulus measures.

Whatever measures we take and however successful we are in returning the economy to its pre-pandemic state, economic policymakers will still have much work to do to ensure that important segments of society that were not participating in the previous economic expansion experience substantial boosts in wages, benefits, and employment.

 -- via my feedly newsfeed

Where is the U.S. getting the trillion dollars it'll take to fight the coronavirus?

By
Christopher Ingraham
March 20, 2020 at 11:00 a.m. EDT

$8.3 billion. No wait, $750 billion. Scratch that: how about $1 trillion?

The price tags for coronavirus relief packages in the United States keep getting bigger as the scope of the epidemic, and of the damage it will wreak on the economy, grows larger and more alarming with each day. Democrats and Republicans, some of whom have long preached fiscal restraint, are suddenly interested in throwing as much money at the epidemic as possible.

After a decade — and in the midst of a presidential campaign — when there were repeated arguments about what America can afford, policymakers appear to be ignoring issues of cost and deciding to spend, spend, spend.

Senate Republicans release massive economic stimulus bill for coronavirus response

So how can the nation suddenly afford to spend a trillion or more on the coronavirus?

The answer, in one word: debt.

As long as Congress authorizes it, the Treasury Department can issue as much debt as it needs to pay the nation's bills. It does this by selling Treasury bonds to investors — foreign governments, banks, mutual funds, and many others who want to keep their money in a safe place. As long as investors keep buying American debt, the U.S. can keep selling it.

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As of right now, the U.S. federal debt (not including government securities held by Social Security) stands at about 79 percent of annual gross domestic product. That's high, historically speaking, but not a record — in the immediate aftermath of World War II, for instance, federal debt briefly spiked above 100 percent of gross domestic product.

As the coronavirus pandemic has send stock markets plunging in recent weeks, investors have signaled a rapacious demand for U.S. government debt.

At one point earlier this month, the 10-year Treasury bond traded as low as .54 percent during this crisis. When you account for inflation, that means investors were effectively willing to lend money to the U.S. government for an entire decade at a loss.

Investors have been willing to do this because they're looking for a safe place to park their cash at a time of massive uncertainty caused by the coronavirus pandemic.

Amid intense volatility in the bond market and panicked selling in recent days, the 10-year Treasury bond has moved up to .99 percent, as of Friday morning. That's still extremely low by historic standards, so low that the Treasury Department is considering issue a 50 year bond for new spending.

The question is: How long will investors continue to lend money in this way?

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Some countries, such as Japan, have lived with high debt levels for years, while others, such as Greece and Ireland, have seen financial crises as a result of their heavy burdens.

Few think that the U.S. debt burden right now is something that should preclude big spending to fight coronavirus. In time, when the economy recovers, the debt burden come could down thanks to a combination of economic growth, tax increases and spending reductions.

But before the coronavirus hits, the government was to set spend about $1 trillion more in 2020 than it collected. The coronavirus-induced recession and the new spending could double that this year.

A lot is riding on the continued confidence of global investors.


--
John Case
Harpers Ferry, WV
Enlighten Radio
Socialist Economics
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Sanders on Corona virus program

Sanders on Coronavirus response

1. Empower Medicare to Lead Health Care Response

• The Centers for Medicare & Medicaid Services will receive all the federal funding necessary to ensure universal emergency health care coverage for all, regardless of income or immigration status. CMS will work with the Centers for Disease Control and Prevention (CDC), other federal agencies, and the private sector to centralize information about what's needed and direct resources to ensure that all health care needs are met at no charge for the duration of this crisis.
• Cover all health care treatment for free, including coronavirus testing, treatment, and the eventual vaccine. Under this proposal, Medicare will ensure that everyone in America, regardless of existing coverage, can receive the health care they need during this crisis. We cannot live in a nation where if you have the money you get the treatment you need to survive, but if you're working class or poor you get to the end of the line. That is morally unacceptable.
• Greatly increase our health care capacity to handle a surge in cases. There is a major shortage of ICU units and ventilators that are needed to respond to this crisis. The federal government must work aggressively with the private sector to make sure that this equipment is available to hospitals and the rest of the medical community.
  • Increase provider capacity. Our current health care system does not have the doctors and nurses we currently need. We are understaffed. During this crisis, we need to mobilize medical residents, retired medical professionals, and other medical personnel to help us deal with this crisis.
  • Implement successful testing models. Our testing capacity and process has been woefully inadequate. We must massively increase the availability of test kits for the coronavirus and the speed at which the tests are processed. We must look to successful coronavirus testing models in other countries and implement best practices here.
  • Use the Defense Production Act to mobilize resources. Under this proposal, we will use existing emergency authority to dramatically scale up production in the United States of critical supplies such as masks, ventilators, and protective equipment for health care workers.
  • Utilize the National Guard, the Army Corp of Engineers and other military resources. Several governors have already called in state National Guard forces. Our armed forces are trained for emergency response and must be immediately activated to build mobile hospitals and testing facilities, assist providers, reopen hospitals that have been shut down and expand our health care capacity in at-risk areas.
  • Dramatically expand community health centers. Pass emergency funding to dramatically expand access to community health centers which provide primary, dental, and mental health care, as well as low-cost prescription drugs, to nearly 30 million Americans, 63 percent of whom are racial and ethnic minorities. We need to greatly expand our primary health care capabilities in this country, and that includes expanding community health care centers.
• Keep health care workers safe. We need to make sure that doctors, nurses and medical professionals have the instructions and personal protective equipment that they need
• Ensure federal funding parity for the territories and tribes for any and all health care relief programs.

2. Establish an Emergency Economic Crisis Finance Agency to manage the economic crisis

This emergency agency, modeled after the Reconstruction Finance Corporation, will be empowered to cover affected businesses' payroll, make zero percent loans and loan guarantees to businesses, finance new construction of factories, emergency shelters, and production of emergency supplies such as masks and ventilators, and create new jobs and economic development. This agency will provide all the necessary funding for fighting this economic crisis.

• Keep workers on payroll. Small and medium sized businesses, especially those in severely impacted industries such as restaurants, bars, and local retail need immediate relief. We must tell these businesses, who are being forced to lay off their entire staff or possibly even shut down through no fault of their own, that we will not allow them to go out of business. The federal government will work with affected businesses to provide direct payroll costs for small and medium sized businesses to keep workers employed until this crisis has passed.
  
  We will provide all necessary assistance, including tax deferrals, utility payment suspension, rental assistance, affordable loans, and eviction protection for struggling businesses. When this crisis passes, we will be ready to start our economy up again without the risk of losing the stores and restaurants integral to our communities. None of this financial assistance shall be used for executive bonuses, stock buybacks or profiteering.
• Provide direct, emergency $2,000 cash payments to every person in America every month for the duration of the crisis. We are likely already in a recession. Workers are losing income while their bills pile up. We must begin issuing cash payments of $2,000 a month for every person in America to provide households with the assistance they need to pay their bills and take care of their families.
  • Under this plan, the IRS, the Social Security Administration, the Treasury Department, credit unions, community banks and other financial institutions will work together to make sure this assistance reaches every American as quickly as possible. Millions of Americans are unbanked or underbanked, and hundreds of thousands have no permanent address. We must make sure we are getting this money into the hands of the most vulnerable.
  • It is key that we get this money out and to families as soon as possible, which means we must make the payments universal with little bureaucracy. For those who will not need their payments, we will partner with organizations to take donations from patriotic families who can contribute their payments to fighting the coronavirus pandemic.
• Expand Unemployment Insurance. We must provide emergency unemployment assistance to anyone who loses their job through no fault of their own. Under this proposal, everyone who loses a job must qualify for unemployment compensation at 100 percent of their prior salary with a cap of $75,000 a year.
  • Protect non-traditional workers. In addition, those who depend on tips, gig workers, domestic workers, freelancers, and independent contractors shall also qualify for Unemployment Insurance to make up for the income that they lose during this crisis.
• Emergency paid family and medical leave for all. Anyone who is sick or who needs to stay home should be able to stay home during this emergency and receive their paycheck. At a time when half of our people are living paycheck to paycheck and must go to work in order to take care of their family, we do not want to see people going to work who are sick and can spread the coronavirus. This is especially important for hourly workers who may not have any or sufficient paid sick days to avoid coming into work when feeling ill.
• Guarantee that no one goes hungry. We need to make sure that seniors, people with disabilities and families with children have access to nutritious food. That means expanding the Meals on Wheels program, the school meals programs, and the Supplemental Nutrition Assistance Program (SNAP) so that no one goes hungry during this crisis and everyone who cannot leave their home can receive nutritious meals delivered directly to where they live.
• Place an immediate moratorium on evictions, foreclosures, and utility shut-offs, and suspend payment on mortgage loans for primary residencies and utility bills. No one should lose their home during this crisis and everyone must have access to clean water, electricity, heat and air conditioning. And we must restore utility services to any customers who have had their utilities shut off. We must also provide funding for states and localities to provide rental assistance for the duration of the crisis.
• Waive all student loan payments for the duration of the emergency. More than 45 million Americans struggle with $1.6 trillion in student debt. We must lift this burden during the crisis and for one month after. Long-term, we must cancel all student debt and make public colleges, universities, and trade schools tuition free and debt free.
• Construct emergency shelter and utilize empty or vacant lodging. We must ensure the homeless, survivors of domestic violence and college students quarantined off campus are able to receive the shelter, the health care and the nutrition they need and connect those individuals with social services to ensure nobody is left behind. We must also utilize empty hotel beds and other vacant properties to ensure everyone is safely housed during this crisis.
• Use the power of the Federal Reserve to support state and local governments. Through the power granted under section 14(2)(b) of the Federal Reserve Act, the Fed will buy short-term municipal debt securities. This will help stabilize state government finances and provide states and localities the financial support they need to address this health and economic crisis.
• Protect farmers. Suspend all Farm Service Agency loan payments to protect farmers during this crisis, extend crop insurance and emergency loans to all affected farmers, extend rural development loans, and expand the Emergency Food Assistance Program (TEFAP) to both help alleviate hunger throughout the country and support our farmers during this crisis.
• Ensure federal funding parity for the territories and tribes for any and all economic relief programs.

3. Create an Oversight Agency to Fight Corporate Corruption and Price-Gouging

Our response to this health and economic crisis cannot be another money-making opportunity for corporate America and Wall Street. We need to establish an oversight agency to ensure no one is profiting off of the economic pain and suffering of our people in crisis.

• Bail out working people, not corporate executives. Any emergency credit extensions or loans to insolvent companies or industries as a result of this crisis must come with strict protections and benefits for workers, unions, and customers, not no-strings-attached handouts for executives.  During this crisis, we will ban stock buybacks and bonuses for executives. We will put conditions on this financial assistance to make sure that any corporation in America that benefits from emergency aid does not lay off workers, pays workers a livable wage, provides equity to the government, puts workers on corporate boards, and does not rip-off consumers.
• Prevent price gouging by pharmaceutical companies. As soon as a coronavirus vaccine is developed it must be sold for free. Further, all prescription drugs that are developed with taxpayer dollars must be sold at a reasonable price. This agency shall use the federal government's authority to take away patents from pharmaceutical companies that are gouging consumers and allow generic companies to manufacture prescription drugs at a substantially reduced cost. The pharmaceutical industry must be told in no uncertain terms that the medicines that they manufacture for this crisis will be sold at cost. This is not the time for profiteering or price gouging.
• Investigate and prosecute price-gougers and corrupt dealings. This agency will have the authority to crack down and prosecute illegal price gouging and corruption. It shall also conduct an independent and transparent audit of all of the emergency financing programs to make sure that American taxpayer dollars are not wasted.

--

John Case
Harpers Ferry, WV

Enlighten Radio

Socialist Economics

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WAPO:Biden attacks Trump’s coronavirus response as inadequate, hits him for lack of transparency.

Biden attacks Trump's coronavirus response as inadequate, hits him for lack of transparency 

"In times of crisis, the American people deserve a president who tells them the truth and takes responsibility," Biden said. "Unfortunately, President Trump has not been that president."

By 

Matt Viser 

March 20, 2020 at 5:06 p.m. EDT

Joe Biden on Friday criticized President Trump over his administration's response to the novel coronavirus, blaming him for the country's testing shortage and accusing him of a lack of transparency.

"In times of crisis, the American people deserve a president who tells them the truth and takes responsibility. Unfortunately, President Trump has not been that president," Biden told reporters on a 30-minute conference call that began shortly after Trump left the lectern in the White House briefing room.

"He is falsely telling us he's taking action he has not taken, promising results he's not delivering and announcing actions that he has not even ordered," Biden said, adding that "the president has been behind the curve throughout this whole response."

They were Biden's most forceful and extended remarks on the subject to date, reflecting an effort to demonstrate his command of the issue and contrast himself with Trump. Biden indicated that he plans to continue trying to amplify his voice on the subject, speaking out more frequently starting next week.

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The former vice president called on Trump to do more to ensure that Americans can be tested for the coronavirus. He said there should be daily reports on the status of treatments and vaccines.

And Biden said more should be done to prepare hospitals. Experts warn that U.S. medical facilities could be swamped with patients in the coming weeks. Already, doctors say that they lack essential treatment tools like ventilators, masks and protective gear.

"We're taking too damn long to decide whether or not to start to mobilize and build hospitals," Biden said. "They should be on the ground doing that right now."

During the briefing, Biden occasionally spoke directly to Trump.

"Stop saying false things, will ya?" he said. "Stop saying false things that make you sound like a hero. … Stop, stop, stop swerving between overpromising, buck-passing, and start delivering protection to our people."

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Biden said he spends about seven hours each day making calls about the pandemic. He said he is in frequent contact with House and Senate leaders, with mayors and governors around the country, and with his health and economic teams.

When campaign aides occasionally visit his house, he said, they put on masks and wear gloves.

On Friday, Biden also outlined some economic proposals to ease the huge financial toll of the crisis. He called for a surge of money into the economy but also began laying out some parameters to prevent large corporations from taking advantage of a stimulus.

"Any large business that in fact gets helped by this, they are going to have to pay back what is lent them to stay in business," Biden said. "They're going to have to make sure any aid they get does not go to buying back their stock, does not go to increasing benefits for the management, et cetera."

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Biden also said he planned to communicate more regularly with the American public, saying his campaign was exploring ways to have regular in-person news conferences either near his home in Wilmington, Del., or else virtually.

"They tell me there's ways in which we can do teleconferencing via us all being in different locations," Biden said. "The bottom line is that everything from providing better access to where I physically live and be able to broadcast from there as well as our headquarters is underway," he added. "We've hired a professional team to do that now. And if you excuse the expression, it's a little above my pay grade how to do that. But that's desperately what we're trying to do because I want to be in daily or at least, you know, significant contact with the American people."

--

John Case
Harpers Ferry, WV

Enlighten Radio

Socialist Economics

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The U.S. Depends On Service Jobs More Than Ever. Now They're Evaporating. - Bloomberg

The U.S. Depends On Service Jobs More Than Ever. Now They're Evaporating.

by Matthew Boesler and Shruti Date Singh

For a decade the U.S. economy has been steadily drawing people into the workforce. Almost overnight, that machine crashed into reverse.Government-ordered shutdowns of restaurants and other businesses set off an avalanche of unemployment claims this week mere days after America hit red alert and began bracing for a pandemic. And it's exposing the systemic importance of a section of the workforce that's been quietly building through several boom-and-bust cycles.In Juan Sandoval's case, that's left

https://www.bloomberg.com/news/articles/2020-03-20/jobs-can-just-evaporate-at-unprecedented-pace-in-fragile-america

For a decade the U.S. economy has been steadily drawing people into the workforce. Almost overnight, that machine crashed into reverse.

Government-ordered shutdowns of restaurants and other businesses set off an avalanche of unemployment claims this week mere days after America hit red alert and began bracing for a pandemic. And it's exposing the systemic importance of a section of the workforce that's been quietly building through several boom-and-bust cycles.

In Juan Sandoval's case, that's left him wondering what will happen to not one but both of his jobs.

Most Tuesdays, Sandoval puts in a six-hour shift at a fried chicken fast food chain in Chicago's West Loop, and then heads over to Italian Village Restaurants a few miles away for seven hours prepping salads at about $14 an hour.

This week, the 49-year-old father of two saw his hours reduced dramatically, and he's not sure if they'll call him in again.

He might be offered a shift preparing carry out at the fast food place, which is still possible during the Illinois dining ban. He may get a call from Italian Village when the ban expires at the end of March – if it in fact does.

Meanwhile, with a 70-hour workweek slashed to almost nothing, "I'm worried about if I'm going to get money for food and to pay my rent," he says.

A Burger King employee removes chairs from a store in San Francisco on March 17.

Photographer: David Paul Morris/Bloomberg

The economy has never been more dependent on jobs and incomes like these in the so-called leisure and hospitality sector –- restaurants, hotels and entertainment venues -- than it was on the eve of the virus outbreak.

More than one in 10 working Americans, about 16.9 million in total, were employed in these industries in February, a record.

Also at an all-time high: the share of consumer spending being directed toward those businesses -- about 8.6%, some $1.3 trillion a year.

Much of that economic activity is disappearing overnight -- shut down by decree, as local governments impose social-distancing measures designed to contain the spread of the deadly virus. That's reckoned to be the best way to give overburdened health-care systems a shot at treating the incoming wave of patients, and keeping the mortality rate down.

Transportation services -- which includes everything from airlines to Uber -- account for another $486 billion in annual consumer spending, and they're taking a big hit too.

It all adds up to massive job losses, at an unprecedented pace.

The unemployment rate in February was 3.5%, a 50-year low. Treasury Secretary Steven Mnuchin warned Republican senators behind closed doors Tuesday it could surge to 20% if they don't act swiftly -- levels not seen since the Great Depression. A report the same day by firm Challenger, Gray & Christmas said the restaurant industry alone will shed 7.4 million jobs.

And it's already well underway.

Unemployment offices in several states reported jammed phone lines or website glitches this week, as claims piled in at a frantic pace. Filings for U.S. unemployment benefits are poised to surge to a record 2.25 million this week, according to a Goldman Sachs Group Inc. analysis of preliminary reports across 30 states.

Different Kind of Recession

What comes next isn't going to be anything like past recessions, according to Gabriel Mathy, an economics professor at American University in Washington.

Typically downturns start in the manufacturing sector, then spread to service industries – which tend to weather downturns relatively well. That's because in hard times consumers tend to delay purchases of big-ticket items like cars or washing machines, but they'll still try to squeeze in the occasional meal out or trip to the movies.

But with many of those businesses at risk of going under -- and the people employed by them being thrown out of work -- the rapid post-virus rebound that forecasters hope for may prove to be a pipe-dream.

People won't make up for all the times they didn't go out, especially if they've been without paychecks for weeks or months.

"Economists don't really have a good road map for this," said Mathy.

Rents Due

The risks could compound quickly, with rent payments due for millions at the start of next month. Robert West is already running the numbers in his head, like so many others.

West, 44, lost his job as a cook in a Philadelphia restaurant this week. He has some savings, but he's wondering how long they would last. And he says many of his younger co-workers don't have even that cushion, living paycheck to paycheck and scrambling for extra hours or shifts.

"A lot of people who rent are going to have trouble on April 1," West says.

Stimulus Help

Congressional leaders are racing to pass a virus package backed by President Donald Trump that would send checks out to every American, helping them to stay current on payments even if their income dried up. But even the most optimistic timetables wouldn't see the money arrive by the end of the month.

Some critics say it would be better to distribute the money via employers, who can then keep paying staff but also avoid bankruptcy themselves. Glenn Hubbard, an economist who advised President George W. Bush, says he's promoting such a plan among lawmakers.

In Chicago, Sandoval's boss at Italian Village -- Gina Capitanini, the third-generation owner of the restaurant –- says she worries about the people she's had to lay off because of the virus, and also about her business, which will suffer too.

That means Capitanini may not be in a position to re-hire everyone once this is all over. "Probably, financially, we wouldn't be able to do it," she said. "It's definitely going to be hunkering down."

Bloomberg-BNN TalkIng Points on Economic Situation [feedly]

DeLong Talking points on Bloomberg
pretty good, and interesting, summary of progressive and sound economic questions surrounding best, and unanswered as yet, approaches to economic hits from the virus.  

Bloomberg-BNN TalkIng Points on Economic Situation
https://www.bradford-delong.com/2020/03/bloomberg-bnn-talking-points-on-economic-situation.html

• At the moment, we have a huge negative supply shock
• But as people lose their jobs as a result of this negative supply shock, it is going to turn into a demand shock
• And we also have a very powerful distribution shock as well
• We want to offset the demand shock without overdoing it
• We want to let the prices of goods and services in high demand rise to encourage people to produce more of them
• Hence an interesting policy problem:
  • The right inflation rate for the next 3 months is not 2%
  • The right inflation rate for the next 3 months is 2% + (share of the economy in high demand) x (how much prices need to rise to boost supply of commoditeis in high mand)/4
  • The right monetary policy is... stimulative, but uncertain...
  • The right fiscal policy is... stimulative, but uncertain...
  • The right distribution policy is... massive boost to unemployment insurance: 100% replacement for those who lose their jobs
  • The right lending policy is... lend enough on easy enough terms that businesses stay afloat, but not enough that stockholders make out like bandits—they are risk bearers, aren't they? Handsomely paid. Now is when they earn the money they earn in normal times...

---

• I really wish the public health people were being louder and more forthcoming...
• Because we do not know where we are
• At the moment, 200 deaths in USA
  • Takes 4 weeks to die
  • At a 1% death rate, that means 20000 cases in U.S. on Feb 20
  • At a 3.33% death rate, that means 6000 cases in U.S. on Feb 20
• If cases have been doubling every 7 days...
  • Then at least 100000 cases in the U.S. right now (and our testing is missing 6 out of 7)
• If cases have been doubling every 4 days...
  • Then at most 2000000 cases in the U.S. right now (and our current testing is missing nearly everybody)
• We don't know which it is, because Trump said he didn't want bad numbers
  • At the moment, 12% of those being tested are coming out as positive
  • But to get the true fraction, you need to multiply that 12% by (those who have it who got tested)/(those who have it), and then divide the result by (those who don't have it who got tested)/(those who don't have it).
    • & because are testing is messed up AF, we have no idea what those two key ratios are...
• And the Trumpists saluted and slow-walked building up testing capacity
• He should have been impeached and removed from office last week for this High Crime alone...

 -- via my feedly newsfeed

Coronavirus Layoff Surge Overwhelms Unemployment Offices [feedly]

Coronavirus Layoff Surge Overwhelms Unemployment Offices
https://www.nytimes.com/2020/03/19/business/coronavirus-unemployment-states.html

The best place to get a job right now might be the unemployment office.

In Washington State, where the coronavirus outbreak found its first foothold in the United States, officials are trying to fill multiple positions processing jobless claims.

LIVE UPDATESFollow our live coverage of the coronavirus outbreak worldwide.

"Due to the temporary closure of some businesses here in Washington State we are anticipating the need for additional staffing," according to the job posting, which promises interviews next week.



It's only the start of what will be a hiring boom by these government offices, which have been running on skeleton crews after years of historically low unemployment. Illinois, Louisiana, Massachusetts and Nebraska have also posted openings. Texas said it was trying to add people, too.

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Scenes From U.S. Cities During Coronavirus Pandemic

Officials have urged people to stay at home to counter the coronavirus outbreak. This is how cities across the country look as the streets empty out.

I would just say enjoy your home. Stay. I would just say, right now. We have to get this problem fixed. Welcome to Miami!

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1:42Scenes From U.S. Cities During Coronavirus Pandemic
Officials have urged people to stay at home to counter the coronavirus outbreak. This is how cities across the country look as the streets empty out.CreditCredit...Carlo Allegri/Reuters

With the coronavirus pandemic triggering layoffs in industries from restaurants to retail — the federal Bureau of Labor Statistics said on Thursday that claims for jobless benefits surged 33 percent last week — states are about to be inundated. And their unemployment offices, long hindered by lumbering technology and bare-bones staffing, are already groaning under the weight.

From New Jersey to Texas to Oregon, the newly jobless have tried to file claims, only to run into glitchy websites and clogged phone lines.





Ryan Connolly was laid off by video chat on Tuesday from his job on a software development project for RDK Truck Sales & Service in Tampa, Fla. Within a few hours, he was on the county website trying to figure out unemployment benefits but couldn't get past the first link. Every time he clicked, the loading wheel would circle interminably.

"My heart just dropped, and I realized that I'm definitely not the only one scrambling here," he said.



It was obvious the site was overwhelmed by the volume, said Mr. Connolly, who is worried about his wife and two young daughters. They were on his health insurance.

"As soon as I saw that, I realized that it was just going to be a nightmare," he said.

He kept trying on Tuesday. It didn't get better. "I've given up," he said Wednesday.

Help is on the way. A stimulus bill that President Trump signed into law on Wednesday provides $1 billion in emergency grants to states for unemployment insurance, and fully half could be immediately used to strengthen staffing, technology and other administrative costs.

The need is urgent. In Colorado, the number of unemployment benefit claims went from 400 on March 9 to 3,900 on Monday and then 10,000 on Wednesday. In Connecticut, there were 2,500 claims last week, but more than 40,000 from Friday evening until Wednesday evening. The number of requests in Ohio jumped to 78,000 this week from 6,500 two weeks ago.

Maryland said that its website and call centers were experiencing "an unprecedented volume" of requests. The state's division of unemployment insurance said it was extending its call center hours, working to increase its network's bandwidth and asking claimants and employers to email.

New York's online application system crashed as it tried to accommodate a spike in volume that resembled the surge after the 9/11 terrorist attacks. By noon on Tuesday, the state labor department had received more than 21,000 calls, compared with 2,000 a week earlier. Visits to its website more than doubled. The department is now extending its hours and staggering filing times alphabetically by last name.

Delta Vasquez, 22, spent several hours trying to slog through Oregon's unemployment claims portal on Monday night after she was laid off from her hosting position at Bamboo Sushi in Portland. She and her co-workers got the news by email after the state moved to restrict bars and restaurants to takeout and delivery.



Ms. Vasquez tried calling the unemployment office instead, but the line rang and eventually disconnected without sending her to voice mail. She tried online again, but the site was confusing — it has operating hours, and stops accepting new claims at 10 p.m. on weekdays.

Ms. Vasquez restarted the online claims process twice before managing to fill out the necessary forms. "If you're not working, you can't save money," she said. "The only resource is unemployment insurance."

Even when unemployment was stable and low, state employment offices were "threadbare," said Andrew Stettner, a senior fellow with the Century Foundation, a public policy research group.

State unemployment insurance programs rely on federal grants to pay for the administration of benefits, but those costs have been cut by 30 percent over the past two decades, he said.

Part of the reason for low staffing: Unemployment office head counts are pegged to the unemployment rate, which had reached historic lows before the pandemic hit.

Even in normal times, unemployment offices struggled with busy signals and website problems, said Julia Simon-Mishel, a supervising attorney in the unemployment compensation unit at Philadelphia Legal Assistance. "So we expect there to be issues with the website and phone lines across the country now."

Further complicating matters are the outdated systems most offices use. Pennsylvania is partway through a technology overhaul, but "a lot of states are still operating on their old mainframe computer systems that are most likely not set up for remote access," Ms. Simon-Mishel said.

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At the same time, some states are undertaking emergency measures to expand and speed up workers' access to benefits. Montana officials said that people forced by employers to stay home, or who are quarantined or caring for a family member with coronavirus, can qualify for benefits. Wisconsin, where nearly half of job center locations are closed because of the outbreak, loosened rules that require claimants to actively search for work. Arkansas, California, Virginia and other states have waived the waiting period before workers can receive aid.

But that still requires applicants to get through the front door.

Desperate, many laid-off employees began requesting donations and posting links to their GoFundMe, Venmo and Cash accounts. The website for one charity group was overrun with people hoping to apply for its bartender emergency assistance program.

Eilís Godfrey, 27, learned on Sunday night that the restaurant where she worked as a server in Los Angeles was closing its doors. She and her colleagues gathered in a back room, usually reserved for private parties, to watch the city's mayor, Eric Garcetti, who ordered the closing of many businesses and said dine-in service at restaurants must stop. The spin studio where she worked the front desk also closed that night.

On Monday, Ms. Godfrey tried to apply for unemployment benefits, but realized that she needed to gather her pay stubs, tax return and other information. On Tuesday, she could no longer get access to California's unemployment benefits site, and couldn't get through on the phone, either.

So she went back to her computer, where, she said, she spent hours "just refreshing the page."

Patricia Cohen contributed reporting.

Tiffany Hsu is a media reporter for the business desk, focusing on advertising and marketing. Previously, she covered breaking business news. Before joining The Times, she wrote about the California economy for The Los Angeles Times. @tiffkhsu

Tara Siegel Bernard covers personal finance. Before joining The Times in 2008, she was deputy managing editor at FiLife, a personal finance website, and an editor at CNBC. She also worked at Dow Jones and contributed regularly to The Wall Street Journal. @tarasbernard

A version of this article appears in print on March 20, 2020, Section B, Page 1 of the New York edition with the headline: Layoff Surge Overwhelms Claims Staffs. Order Reprints | Today's Paper | Subscribe

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