Most public health experts believe that it is too soon to begin reopening the economy. Few states meet the guidelines for reopening; and there are far too few effective tests to determine how widely the disease has spread. Although some other industrialized countries have developed sophisticated contact tracing programs to contain the virus, in the United States there is no system in place.
The rate of growth of confirmed cases has slowed overall, but it is rising in some parts of the country. Epidemiologists widely believe that the number of actual infections is much higher because the lack of testing means that even many of those who have symptoms aren’t counted in the official figures. The rate of growth of deaths also has slowed, but not much from the recent peaks. Experts believe that the death rate from COVID-19 also is substantially understated.
Nevertheless, President Trump has advocated relaxing social distancing mandates since late March—even before the number of confirmed cases exploded, causing what likely will exceed 100,000 American deaths by Memorial Day. Although he now claims that he leaves such decisions to the states, he has applied tremendous pressure and even has threatened governors who oppose him.
On Thursday morning at 8:30, the Department of Labor (DOL) will release its report on first-time unemployment insurance (UI) claims for the week ending May 16. It will be the ninth report in the period since parts of the nation went into lockdown, during which well over 30 million Americans have been recorded as filing a new claim. News coverage and analysis likely will cite a firm number – it probably will be wrong, or at least incomplete.
This is a result both of who is or is not counted and how the data are interpreted. For example, the topline number does not include those self-employed and gig workers who filed claims under the new Pandemic Unemployment Assistance (PUA) program recently passed by Congress. More than 840,000 workers filed PUA claims during the week of May 9. These claims were included in a paragraph and tables in the most recent DOL report, but not combined with regular claims to get an overall number of new filings.
On the other hand, the topline number of new claims includes a “seasonal adjustment,” which dampens fluctuations due to seasonal variations. This makes it easier to see trends and is very helpful in most cases—except during extremely fast and large job losses due to cataclysmic events like the coronavirus pandemic. The upward adjustment applied in the spring substantially inflated the already extremely high number of new claims in recent weeks. The cumulative seasonally adjusted (SA) number of new claims over the past eight weeks is 3 million higher than the not seasonally adjusted number (NSA).
Some of the best reporting on new unemployment claims has captured these nuances, although they largely remain buried due to the long-standing and in most cases preferred tradition of presenting seasonally adjusted numbers.
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Leading economists have long advocated for using “automatic stabilizers” to help counteract the destructive impact of recessions and to hasten recovery. Such mechanisms, like unemployment insurance, automatically expand when the economy worsens and shrink when it recovers. This prevents consumer demand—and the economy—from falling into a downward spiral.
Congress has acted forcefully to counteract the economic fallout of coronavirus with a dramatic expansion of unemployment insurance, aid to state and local governments and more. But that aid is temporary and, unlike enhanced automatic stabilizers, will begin to expire this summer while we likely remain in the middle of dual public health and economic emergencies.
Providing economic support to Americans during the public health emergency is critical to beating the virus. The goal in every other economic downturn has been to get people back to work quickly, but the current objective is to allow them to stay home or practice social distancing for as long as it takes to get the virus under control. Public health experts predict that
Americans will not cooperate with these measures if they can’t support their families.
Economic assistance should continue even after the end of the public health emergency, given how deep the current economic downturn is and how long it may last. We already have seen more than 24 million Americans lose their jobs in just five weeks and images of food lines have proliferated across the country, evoking the depths of the Great Depression. This will likely not end quickly: the Congressional Budget Office notes that its forecast is highly uncertain, but estimates that, without additional economic support by Congress, unemployment at the end of 2021 will be 9.5%, only slightly better than the very worst (10%) of the Great Recession.
The most sensible way for Congress to guarantee that economic assistance will continue as long as it is needed is by directly linking it to the state of the economy instead of picking arbitrary expiration dates. This would mimic the automatic stabilizer approach that economists have long urged, provide certainty to families that they will get the aid they need, ensure that support does not depend on politics and automatically turn off support when it is no longer needed. Neither economists nor epidemiologists can predict the length of this recession—some believe the economy will begin to rebound quickly while others say it will remain depressed for years. Linking aid to economic conditions accounts for either possibility.
A discretionary approach to economic support risks cutting off aid to families as they comply with public health guidelines that essentially require unemployment or wait for the economy to recover. These consequences would be especially grave for low-income Americans and people of color. This risk—in an election year with divided partisan control of Congress—is too grave.
Linking support to economic conditions, on the other hand, avoids that unnecessary risk.
Washington, D.C.—Today, Congressman Don Beyer (D-VA), the Vice Chair of the U.S. Congress Joint Economic Committee (JEC), released a report that explains why Black, Latino and low-income communities are disproportionately impacted by the coronavirus.
As the report shows, Black, Latino and low-income Americans are more likely to have pre-existing conditions such as hypertension, chronic lung disease, diabetes and heart disease—a CDC report found that nine of 10 Americans hospitalized for coronavirus had these health conditions. In addition, they are more likely to do person-to-person work in the service industry—often without benefits like paid sick leave, health insurance and the flexibility to work from home.
Black, Latino and low-income Americans are also more likely to suffer economic impacts from the recession caused by coronavirus because they historically experience higher unemployment rates, lower income and much less wealth.
“As a result of a corrosive cocktail of systemic inequalities, tens of thousands of people across the country are more likely to die from the coronavirus because of who they are, what they do and where they live,” Congressman Beyer said.
“Not everyone has a job that will allow them to work from home and those that do not are disproportionately low-income and people of color,” Congressman Beyer said. “Public-sector jobs that have been pathways to the middle class for so many black families—essential jobs to keep society running—are now risky. I keep thinking about the black bus driver in Detroit who, like so many of those in the service industry, was torn between a paycheck and protecting his health—a few weeks after complaining about the lack of health protections on his bus he died of coronavirus.”
Congressman Beyer added, “As Congress thinks through how to help the nation respond and recover from the coronavirus, it is important that we remember that race neutral programs and policies do not always have race neutral impacts. We saw this play out with some of the small business programs that were included in previous legislative responses to the coronavirus—even though they are eligible, small-business owners of color are having a harder time accessing federal loans through their local banks. I am pleased that in the bill passed yesterday we improved access by ensuring more funds are available to minority-owned businesses.”
One of the communities hardest hit by the coronavirus is the Black community. A CDC study of coronavirus hospitalization in March across 14 states showed that 33% of admitted patients were Black, despite Blacks making up just 18% of that study’s population. In Louisiana and Chicago, 70% of people who have died from coronavirus have been Black, despite Black Americans making up just one-third of the population in both places. In Washington, D.C., 81% of the people who have died from the coronavirus have been Black, despite Black Americans making up 46% of the population. Nationally, 24% of Black Americans and Latinos work in the service industry compared to 16% of Whites.
In addition to Black, Latino and low-income communities, the report shows the disproportionate impact the coronavirus is having on the Native American communities. Though national level statistics are scarce, available data show the Navajo Nation has seen the highest number of confirmed cases (1,360) and deaths (52) thus far . In New Mexico, Native Americans make up 11% of the population and 37% of those confirmed with coronavirus.