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Biden vows to create 5M manufacturing jobs, ‘Buy American’

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Biden is pledging to invest $300 billion in research and development over four years that would be spread across the U.S. 

Former Vice President Joe Biden is laying out a plan to rebuild the U.S. economy that includes cracking down on outsourcing, investing billions in research and development and creating at least 5 million jobs in manufacturing and innovation.

The plan places a major emphasis on “Buy American” provisions that would tighten restrictions on what qualifies as a U.S.-made good and invest $400 billion in government procurement, both of which the Democratic presidential candidate’s campaign says will help power demand for American products and services.

Biden is pledging to invest $300 billion in research and development over four years that would be spread across the U.S. to a diverse array of businesses and entrepreneurs, including women and minorities. The spending would spark what campaign officials called “high-quality job creation” around the country.

He is also calling for a pro-worker trade strategy in which the U.S. will work with its global allies and within World Trade Organization rules to get tough on China, which he blames for harming American workers and contributing to a decline in U.S. manufacturing.

“Joe Biden’s going to fight like hell for American workers through trade, enforcing deals and rallying the world to take on China’s abuses,” a senior Biden campaign official told reporters on a press call.

The moves come as part of Biden’s four-part “Build Back Better” economic plan, which was released Thursday morning and which focuses on clean energy, the caregiving workforce and racial equity as well as trade and manufacturing. But senior campaign officials sharing details Wednesday night focused on the latter subject, saying information on the other “pillars” will be released later.

Officials sought to draw contrasts with the current administration, saying “the Trump trade strategy has simply failed.” But when asked whether Biden would reverse any of President Donald Trump’s major trade policy moves — including withdrawing from the preliminary trade deal signed with China or lifting tariffs on steel and aluminum imports — an official declined to commit, saying the former vice president would have to review each of those issues once in office.

Trump himself won the presidency in 2016 pledging to cut down on outsourcing, revive American manufacturing and take on Beijing.

Officials, who spoke on background, emphasized this plan is “not just a response to Donald Trump’s massive mismanagement of the pandemic” but also aims to address longstanding weaknesses and inequities in the economy.

“Vice President Biden truly believes that this is no time to just build back to the way things were before,” one official said. “This, he believes, is the moment to imagine and build the new American economy for our families and next generation.”

This blog originally appeared at Politico on July 9, 2020. Reprinted with permission.

About the Author: Megan Cassella is a trade reporter for POLITICO Pro. Before joining the trade team in June 2016, Megan worked for Reuters based out of Washington, covering the economy, domestic politics and the 2016 presidential campaign. It was in that role that she first began covering trade, including Donald Trump’s rise as the populist candidate vowing to renegotiate NAFTA and Hillary Clinton’s careful sidestep of the Trans-Pacific Partnership.


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‘It’s all backwards-looking’: June’s positive jobs data obscures a grimmer reality

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Thursday’s jobless data failed to capture the latest devastation, economists say.

Thursday’s monthly jobs numbers look great on paper: 4.8 million jobs were added in June as states reopened. But those numbers are a deceiving bump — with the resurgence of the virus and a fresh wave of shutdowns, the reality of the job market is likely far more bleak.

With more than 40 percent of the country now reversing or pausing its plans to reopen, the already struggling U.S. economy has begun to show signs of another shock. Another 1.43 million Americans applied for jobless benefits last week, the Labor Department reported on Thursday, and 19.3 million remain on unemployment insurance — a slight increase from the previous week’s revised level.

Real-time measurements ranging from job postings to restaurant reservations and small-business operations are also suggesting a renewed decline in economic activity. And the number of households expecting to lose income over the next month increased in the most recent week, according to a U.S. Census Bureau survey released on Wednesday — the first rise recorded since the agency began conducting weekly household surveys two months ago.

But because of a lag in the federal data, the employment numbers the Department of Labor released Thursday morning for June — the results of a survey conducted through the middle of the month — are failing to capture the latest round of devastation, economists say. The numbers therefore should be taken “with a whole stockpile of salt,” said Diane Swonk, the chief economist at Grant Thornton.

“It’s all backwards-looking because of what we’ve experienced since then,” Swonk said. “Fear is its own tax, and the pullback was pretty dramatic.”

The official unemployment rate came in at 11.1 percent in June, a drop from May’s 13.3 percent. The steady improvements from April to June suggest the economy has been starting to recover, and employees were getting called back to work. 

President Donald Trump celebrated the data on Thursday, saying that it “proves that our economy is roaring back.”

“We have some areas where we’re putting out the flames of the fires, and that’s working out well,” he said at the White House.

But the monthly unemployment rate does not include those who haven’t been actively searching for work over the past four weeks, potentially leaving out those who were waiting for new job opportunities as states reopened. The economy is still down 14.7 million jobs from February levels.

And while the economy has improved since the spring, there have been some signs that the pace of growth may be slowing. Weekly unemployment claims have steadily dropped from their peak of 6.8 million in late March but plateaued at around 1.5 million for most of June — still more than double the previous highest level on record. When you add in Americans applying for aid under a temporary Pandemic Unemployment Assistance program, the total number of people filing for benefits climbs as high as 2.3 million last week, a slight increase from the week before. 

The number of Americans receiving unemployment benefits has also held relatively steady at roughly 20 million in the most recent weeks of data.

“There’s no shortage of concerns around what we’re seeing in the jobless claims data and … of course the fact that the improvement in the data has seemed to have slowed somewhat,” said Mark Hamrick, senior economic analyst at Bankrate.com. “And then there is a risk that new restrictions will cause further job loss.”

Private companies have also been collecting data suggesting a slowdown. The reservation website OpenTable has seen the number of restaurant diners fall in the past few days after weeks of steady improvement. Homebase, a company that collects data from more than 60,000 businesses and 1 million hourly employees, has recorded Main Street business activity flattening in late June and even starting to drop in the past week, particularly in states like Arizona, Florida and Texas where coronavirus cases are surging.

And the online jobs marketplace ZipRecruiter — which had seen the number of job openings posted rise more than 14 percent in May compared to the month before — recorded a 7 percent drop in June, dragged down by particularly weak numbers in just the past few days, said Julia Pollak, a labor economist with the company.

“That likely reflects increasing awareness that we haven’t got this virus under control yet, that businesses may have to re-close,” Pollak said. “I think that is a very upsetting and worrying thing.”

The new numbers come as the Senate is gearing up for negotiations over another coronavirus relief package, including whether to extend the extra $600 per week in jobless benefits that are currently due to run out at the end of July. A bipartisan group of lawmakers is also hammering out the details of additional business rescue programs that would offer forgivable loans to employers who are able to maintain a percentage of their payroll — similar to the rules of the Paycheck Protection Program.

Senate Majority Leader Mitch McConnell signaled this week that Republicans are willing to move quickly on some sort of package, saying the chamber will focus on talks when it returns from its two-week July 4 recess. Another month of positive jobs numbers could alleviate pressure on Republicans to continue some of the more heavily debated aspects of that program, including the $600 sweetener.

Many GOP lawmakers argue that the benefit is so high that it provides a disincentive to return to work. Republicans have generally been taking a “wait-and-see” approach to the potential next round of stimulus funding, while House Democrats have already moved to extend it until January.

Other aspects of the stimulus, including the PPP, are likely keeping the economy as strong as it is, and economists warn it could quickly fall if and when benefits expire. Tom Gimbel, founder and CEO of the national staffing and recruiting firm LaSalle Network, said he doesn’t expect the unemployment figure to be an accurate reading of the economic situation until September’s or October’s report, when the small businesses relief program created under the CARES Act runs out.

“I think the numbers are wholly inaccurate as to where the state of the economy is,” Gimbel said, adding that when the government’s forgivable loan Paycheck Protection Program ends more people will be laid off. The program stopped accepting new applications this week but Congress is moving to keep it open until Aug. 8.

Not all of the real-time data is showing a slowdown. Daniel Zhao, a senior economist with Glassdoor, accurately predicted that nearly 5 million jobs would be brought back in June. But he also warned that job openings grew the fastest last month in the Midwest and South — areas that were some of the first to reopen, and that have also seen Covid-19 infections swelling in recent days.

“The jobs report is often thought of as a look in the rearview mirror, because the reference week is now two or three weeks past, and we’ve seen this surge in Covid-19 cases across the country,” he said.

“There is this open question about how it’s actually going to take into account the most recent information,” he added, suggesting the effect of the reinstated business closures could take a week or two to trickle down into the economic data.

There’s also the question of a misclassification issue that the Bureau of Labor Statistics has acknowledged contributes to an understatement of the actual level of joblessness in the country. That’s because large numbers of people have been classifying themselves as employed but absent from work in its monthly survey, which can artificially suppress the unemployment rate.

The issue reduced the overall April unemployment rate by as many as five percentage points, and the May rate by about three percentage points, the agency said. The same misclassification problem also occurred in the March report, but only reduced the unemployment rate by about 1 percent.

BLS said it had “taken more steps to correct the problem” and implemented more training for interviewers ahead of the most recent report. The agency said on Thursday that the degree of the problem “declined considerably” in Juneand that it only affected the unemployment rate by 1 percentage point at the most.

Despite the mixed picture, many economists and lawmakers are emphasizing that the new spike in coronavirus cases alone spells more trouble for the economy, which they say will need further help.

“The jobs crisis won’t be over until the public health crisis is over,” House Majority Whip Jim Clyburn (D-S.C.) said on a press call Wednesday. “This administration is burying its head in the sand and pretending that the virus is going to miraculously disappear. It won’t. And that approach will only prolong our nation’s crisis.”

This blog originally appeared at Politico on July 2, 2020. Reprinted with permission.

About the Author: Megan Cassella is a trade reporter for POLITICO Pro. Before joining the trade team in June 2016, Megan worked for Reuters based out of Washington, covering the economy, domestic politics and the 2016 presidential campaign. It was in that role that she first began covering trade, including Donald Trump’s rise as the populist candidate vowing to renegotiate NAFTA and Hillary Clinton’s careful sidestep of the Trans-Pacific Partnership.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter. Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. Her work has been published by The Washington Post and the Associated Press, among other outlets.


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Economy Gains 4.8 Million Jobs in June; Unemployment Declines to 11.1%

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The U.S. economy gained 4.8 million jobs in June, and the unemployment rate declined to 11.1%, according to figures released Thursday morning by the U.S. Bureau of Labor Statistics. The improvements reflect the continued resumption of economic activity that previously was curtailed because of the COVID-19 pandemic.

Last month’s biggest job gains were in leisure and hospitality (+2.1 million), retail trade (740,000), education and health services (568,000), other services (357,000), manufacturing (356,000), professional and business services (306,000), construction (158,000), transportation and warehousing (99,000), wholesale trade (68,000), financial activities (32,000) and government employment (33,000). Mining lost 10,000 jobs in June.

In June, the unemployment rates declined for teenagers (23.2%), Blacks (15.4%), Hispanics (14.5%), Asians (13.8%), adult women (11.2%), adult men (10.2%) and Whites (10.1%).

The number of long-term unemployed workers (those jobless for 27 weeks or more) increased in June.

This blog originally appeared at AFL-CIO on July 1, 2020. Reprinted with permission.

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist. Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.


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Another awful week of Americans seeking state and federal job benefits: 2.25 million file new claims

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We’ve had plenty more news this week indicating just how bad things are economically now and how long they are likely to remain bad. Federal Reserve Chairman Jerome Powell, who has warned that gross domestic product could drop 30% this quarter, on Wednesday reinforced what other analysts have said about the crunch affecting American workers: ”It’s just going to be very hard to say. But my assumption is that there will be a significant chunk, well into the millions—I don’t want to give you a number because it’s going to be a guess—but well, well into the millions of people who don’t get to go back to their old job. In fact, there may not be a job in that industry for them for some time. There will eventually be, but it could be some years before we get back to those people finding jobs.” He noted that low-wage workers, women, African Americans and Latinos have been hit especially hard.  

Another big bunch of people who may be among those workers who find themselves in that same boat filed new claims for state or federal unemployment benefits in the week ending June 6, the Labor Department reported Thursday. Together, on a non-seasonally adjusted basis, 1.537 million filed new claims for state benefits and 705,676 filed for federal benefits under the Pandemic Unemployment Assistance that covers free-lancers and other workers not eligible under state programs. All told, those who have filed and are receiving or waiting to receive benefits now total 35.4 million, a decrease from last week’s non-seasonally adjusted 37 million tally.

Because of the volatility being experienced in the labor market right now, the seasonal adjustment distorts what is actually happening in the labor market week to week. Moreover, the PUA filings are not seasonally adjusted. Mashing together adjusted and unadjusted skews the outcome. 

That non-seasonally adjusted 35.4 million breaks down like this:

Regular State UI Initial Claims…………… 3.2 million
Regular State UI Continuing Claims…..18.9 million
PUA Initial Claims………………………………2.8 million
PUA Continuing Claims……………………..9.72 million
Assorted Other Categories………………..766,537

If those 35.4 million were the total number of unemployed, the unemployment rate would be about 22.5%But counting unemployment benefit recipients isn’t how the Bureau of Labor Statistics tallies the unemployment rate. Last week, the bureau announced that the rate for May was 13.3%—with the last paragraph of an end-note pointing out that had workers who should have been marked as “unemployed on temporary layoff“ counted correctly, the rate would have been 16%. But this is nowhere near the 22.5% roughly indicated by the count of unemployment benefit recipients.

A few have asserted that the miscategorization of workers is due to some connivance at the Bureau of Labor Statistics to make Donald Trump look better. But former Obama-appointed BLS officials as well as other experts who are no pals of Trump have weighed in to say bureau procedures and the integrity of statisticians there prevent that from happening. 

But in addition to the mistake, there was a big error in judgment at the BLS. Public acknowledgement of the error in categorizing some workers should have been made not at the end but as preface to the bureau’s job report. If it had been, newspaper and online news outlets and Foxaganda wouldn’t still be touting the 13.3% number as if the more accurate 16% estimate didn’t exist. Perhaps after two misses on that score, the BLS will do better in the June report. 

No matter what the actual unemployment count is, it’s dreadful, far worse than the Great Recession at its worst when 10% were unemployed for a single month late in 2009. What that means massive stimulus on top of the trillions of dollars already paid out. More stimulus and a lot more oversight. Of course, the Senate Republicans stand firm against that, some of them citing the job report from last week as an indication that the economy will do just fine without it. This would be nonsense even if the perils of reopening the economy prematurely weren’t showing up in state after state as spikes in cases of COVID-19. 

At the Economic Policy Institute, Josh Bivens and David Cooper write:

  • If policymakers do nothing at the federal level to address these shortfalls, the United States could end 2021 with 5.3 million fewer jobs, with losses in every state.
  • Further, if Congress passes some level of aid that is insufficient—less than $1 trillionthey will needlessly guarantee a significant job gap by the end of 2021.
    • If they pass $500 billion of aid over that time, the jobs gap will likely be roughly 2.6 million. If they pass $300 billion of aid, the jobs gap will likely be roughly 3.7 million.
  • While empirical estimates of the shortfall should guide policymakers’ thinking, they can (and actually should) avoid putting a firm sticker price on state and local aid by tying this aid to economic conditions. If the economy recovers faster than the forecasts driving the $1 trillion estimated shortfall indicate will happen, then less aid would be needed. If instead recovery lagged, more would be needed.
  • Finally, filling in the estimated shortfalls would merely return state and local governments to their pre-crisis fiscal status quo. But the unique features of the current economic shock will put greater demands on public services than existed before the crisis. To go beyond macroeconomic stabilization and promote the general welfare, even more federal aid to these governments is likely needed.

This is wise and necessary. But repairing the economy to get back to the status quo isn’t enough. Not when the economy had plenty of chronic problems well before the Pandemic Recession got hold of us. Transformation is called for. Low interest rates plus people losing jobs they’ll never get back plus the need for building a sustainable economy to address climate crisis presents us with the opportunity for making that transformation if we are smart enough to grasp it.

For now, the Federal Reserve made clear on Wednesday that the current levels of interest are going to be with us for quite some time and the Fed continues with its relaxed approach. Stephen Stanley, chief economist at Amherst Pierpont Securities, told Bloomberg, “The Fed is clearly very sensitive to the fact that the Great Depression was made worse by not taking action, and they don’t want to make that mistake again. The Fed, at least right now, wants everyone to believe that it will be easy for as far as the eye can see.”

This blog originally appeared at Daily Kos on June 11, 2020. Reprinted with permission.

About the Author: Timothy Lange is a member of the Daily Kos staff.


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Surprise unemployment drop sparks debate over how fast the economy will rally

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The rate reflects parts of the economy reopening in the wake of the coronavirus pandemic.

An unexpected drop in the unemployment rate set off a fresh round of debate on Friday over how fast the economy can rebound from the coronavirus pandemic and how much the government should intervene to help.

The unemployment rate fell to 13.3 percent in May from a peak of 14.7 percent in April, the Bureau of Labor Statistics reported — surprising economists who had widely expected the rate to jump to about 20 percent in May, given that more than 40 million people have applied for unemployment benefits in recent weeks.

The economy gained 2.5 million jobs last month, as states started relaxing stay-at-home orders and opening for business. Markets rallied on the news, with the S&P 500 gaining nearly three percent by mid-day. The Dow Jones Industrial Average was up 3.8 percent.

President Donald Trump and his economic advisers, who have been prodding governors to relax stay-at-home orders, said the numbers show the economy will recover as quickly as they have been predicting. Trump at a Friday news conference compared the pandemic to a short-lived natural disaster and said the numbers are evidence of the “greatest comeback in American history.” 

But some economists warned that the unemployment rate is still at highs not seen since the Great Depression — and that it remains hard to predict whether and how rapidly the upswing will continue. The nonpartisan CBO has estimated that unemployment won’t even near pre-pandemic levels — which was at 3.5 percent in February— by the end of next year.

“The next few months really will reveal a lot,” said Heidi Shierholz, an economist at the left-leaning Economic Policy Institute. “It is very, very hard to measure things right now.” 

The economy lost 22 million jobs in March and April, so is still down 19.6 million jobs, Shierholz said.

Some economists warned that the unexpected number likely understates the extent of the economic pain felt last month. Large numbers of people have been classifying themselves as employed but absent from work in the Labor Department’s survey, and that can artificially suppress the unemployment rate. 

Mark Hamrick, senior economic analyst for Bankrate, cautioned that the May unemployment rate would have been 3 percentage points higher if those workers had been properly recorded.

“You know there’s a lot going on here,” said Hamrick, “One of the very challenging aspects of getting our arms around the current situation is that statistics are fairly stable when the economy is stable, and when the economy is rapidly changing the statistics are rapidly changing as well.”

Hamrick said the unexpected number reflects the “dynamism of the situation,” and the fact that economists have been relying on the weekly unemployment claims figure to measure the recent job losses. 

The unemployment figure reported Friday reflects the situation in the middle of May, which is when the agency surveys Americans to get a snapshot of the workforce.

The lower-than-expected number may also be related to a 15 percent drop in responses to the household survey, which the Labor Department uses to estimate the number of people who are employed. 

“We’re in this moment where we don’t have the luxury of reading and seeing, we have to try to interpret what’s going on,” said Shierholz, who is also a former chief economist at the Labor Department. 

She noted that the positive report indicates the flurry of coronavirus relief bills enacted in recent months to help keep the economy afloat during the pandemic appear to be working.

“The provisions that we’ve implemented, are sustaining income, which means that as things reopen there is confidence and demand there to get people back to work,” Shierholz said. 

The news wasn’t all positive. While the unemployment rate for adult women, adult men, white workers, Hispanic workers dropped from April to May, it rose slightly for black workers to 16.8 percent.

And the number of workers who said they have permanently lost their jobs increased by 295,000 in May to 2.3 million.

The leisure and hospitality industry, which was battered by state stay-at-home orders and shed more than 8 million jobs in April and March, added 1.2 million jobs last month. 

But even as jobs gains were seen elsewhere, employment in government continued to decline, shedding 585,000 jobs in May for a total loss of 1.5 million jobs in two months. 

Most of those losses were in local government — a major employer for black workers, and one factor contributing to the black unemployment rate holding steady even as the overall rate declined.

The jobless rates for teenagers (29.9 percent) and Asians (15 percent) also saw little change from April to May. 

The May jobs report lands amid a debate in Washington over whether to extend the unemployment benefit program created to help jobless Americans weather the pandemic. 

With more than 40 million unemployment claims filed throughout the pandemic, Republicans argue that an additional $600 weekly unemployment payment authorized in a March assistance bill will discourage Americans from getting back to work and stymie the recovery. 

But, former congressional economists from both Republican and Democratic administrations warned lawmakers earlier this week that more aid may be needed. 

A failure to extend the benefits will “hinder our ability to recover,” said Douglas Elmendorf, who led the Congressional Budget Office from 2009 to 2015. He said benefits should stay in place until the national jobless rate falls back down to 6 percent.

This blog originally appeared at Politico on June 5, 2020. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter. Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. Her work has been published by The Washington Post and the Associated Press, among other outlets.


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Unemployment drops in May to 13.3 percent as states reopen

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The rate reflects parts of the economy reopening in the wake of the coronavirus pandemic.

The unemployment rate dropped to 13.3 percent in May, amid a push for a reopening economic rally, the Bureau of Labor Statistics reported Friday.

The economy gained 2.2 million jobs last month, as states started relaxing stay-at-home orders and opening for business.

President Donald Trump, who has been prodding governors to reopen state economies, took credit for the reversal.

“Really Big Jobs Report.” Trump tweeted in reaction to the numbers. “Great going President Trump (kidding but true)!” He also announced a Friday morning press conference at the White House to discuss the report.

The unexpected jump follows a historic 14.7 percent unemployment rate in April, the highest recorded since the economic downturn of the 1930s.

Economists were bracing for an unemployment rate close to 20 percent in the May report, aligning with weekly applications for unemployment insurance climbing above 40 million in recent weeks.

The payroll company ADP reported a 2.8 million drop in May of nonfarm private payrolls earlier this week.

“The biggest payroll surprise in history, by a gigantic margin, likely is due to a wave of hidden rehiring,” Ian Shepherdson, chief economist at Pantheon Macroeconomics wrote in reaction to the number.

“Businesses which let people go in large numbers in March didn’t need to post their intention to bring people back on Indeed;” he said, “they just needed to call/text/email.”

The unexpected number likely understates the extent of the economic pain felt last month. Economists warned large numbers of people have been classifying themselves as employed but absent from work in the survey, which can artificially suppress the unemployment rate.

The figure also reflects the situation in the middle of May, which is when the agency surveys Americans to get a snapshot of the workforce.

While the unemployment rate for adult women, adult men, white workers, Hispanic workers dropped from April to May, it rose slightly for black workers to 16.8 percent.

Notably, the number of workers who say they have permanently lost their job, increased by 295,000 in May to 2.3 million.

The leisure and hospitality industry, which was battered by state stay-at-home orders and shed more than 8 million jobs in April and March, added 1.2 million jobs last month.

But even as jobs gains were seen elsewhere, employment in government continued to decline, shedding 585,000 jobs in May for a total loss of 1.5 million jobs in two months.

Most of those losses were in local government — a major employer for black workers, and one factor contributing to the black unemployment rate holding steady even as the overall rate declined.

The jobless rates for teenagers (29.9 percent) and Asians (15 percent) also saw little change from April to May.

Heidi Shierholz, former chief economist at the DOL, noted that while May’s job growth is a positive sign, the U.S. jobs level “remains in absolute crisis.”

“In May, we added 2.5 million jobs,” wrote Shierholz, who is now with the Economic Policy Institute. “But in March and April, we lost 22 million, so we are still down 19.6 million jobs.”

The damage to the economy is forecast to be long lasting. The nonpartisan CBO estimates that unemployment won’t even near pre-pandemic levels — which was at 3.5 percent in February — by the end of next year.

The May jobs report lands amid a debate in Washington over whether to extend the unemployment benefit program created to help jobless Americans weather the pandemic.

With more than 40 million unemployment claims filed throughout the pandemic, Republicans argue that an additional $600 weekly unemployment payment authorized in a March assistance bill will discourage Americans from getting back to work and stymie the recovery.

But, former congressional economists from both Republican and Democratic administrations warned lawmakers earlier this week that more aid may be needed.

A failure to extend the benefits will “hinder our ability to recover,” said Douglas Elmendorf, who led CBO from 2009 to 2015. He said benefits should stay in place until the national jobless rate falls back down to 6 percent.

This blog originally appeared at Politico on June 5, 2020. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter. Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. Her work has been published by The Washington Post and the Associated Press, among other outlets.


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We need strong policy now to avert a depression, this week in the war on workers

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We know that unemployment is sky-high, but that’s not the end of the story. The Economic Policy Institute’s Heidi Shierholz sounds a warning that, if lawmakers don’t act, we’re looking at a depression.

“If the federal government provides sufficient aid during this crisis so that people’s income doesn’t drop dramatically (even if they have been unable to work), so that businesses stay afloat (even if they have been totally or significantly shuttered), and so that state and local governments whose tax revenues are plummeting are not forced to make drastic cuts that will hamstring the economy, then those furloughed workers could get back to their prior jobs and the recovery could be rapid because confidence and demand would be relatively high,” she writes. “But if the federal government doesn’t act, then those furloughs will turn into permanent layoffs and the country will face an extended period of high unemployment that will do sweeping and unrelenting damage to the economy—and the people and businesses in it.”

The Center on Budget and Policy Priorities’ Michael Leachman sounds a similar note with an eye to state budgets, writing “Federal aid that policymakers provided in earlier COVID-19 packages isn’t nearly enough. Only about $65 billion is readily available to narrow state budget shortfalls. Treasury Department guidance now says that states may use some of the aid in the CARES Act of March to cover payroll costs for public safety and public health workers, but it’s unclear how much of state shortfalls that might cover; existing aid likely won’t cover much more than $100 billion of state shortfalls, leaving nearly $665 billion unaddressed. States hold $75 billion in their rainy day funds, a historically high amount but far too little to meet the unprecedented challenge they face. And, even if states use all of it to cover their shortfalls, that still leaves them about $600 billion short.”

This blog originally appeared at Daily Kos on May 23, 2020. Reprinted with permission.

About the Author: Laura Clawson has been a Daily Kos contributing editor since December 2006. Full-time staff since 2011, currently assistant managing editor.


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Unemployment claims rise by 2.4 million as states try to open for business

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A total of 38.6 million workers have now applied for unemployment assistance over the past nine weeks.

Another 2.4 million workers filed new unemployment claims last week, DOL reported, suggesting that the economic pain from the coronavirus is continuing even as states begin to allow businesses to reopen.

The coronavirus has forced nearly 39 million Americans out of work and onto state jobless benefit rolls in nine weeks, leading to levels of unemployment not seen since the Great Depression of the 1930s.

“The coronavirus crisis continues to inflict swift and deep impacts on the labor market at a near unprecedented clip,” Glassdoor Senior Economist Daniel Zhao said in reaction to the numbers. “While recent indicators show the initial steep job declines are slowing, the labor market remains in a deep hole it will have to climb out of.”

Heidi Shierholz, senior economist at the left-leaning Economic Policy Institute, noted that the number of new claims filed last week is likely closer to 4.4 million, based on how DOL now separates its data.

The unadjusted raw number of claims filed in regular state unemployment programs last week totaled at 2.2 million workers. But the report indicates another 2.2 million Americans also sought jobless aid under the new temporary Pandemic Unemployment Assistance program.

California saw the highest number of new claims last week, with an estimated 246,115 applications filed. New York followed with an estimated 226,521 new claims.

While the number Americans seeking jobless benefits has slowly declined over the past several weeks, some economic forecasts also suggest that huge swaths of the workforce could remain unemployed for a prolonged period.

The nonpartisan CBO warned in an update to its economic forecast Tuesday that unemployment will rise to 16 percent in the third quarter if a small business lending program created in a coronavirus stimulus package expires. By the end of 2021, the agency projects unemployment will still be as high as 8.6 percent. 

Federal Reserve officials said they worry the U.S. could be facing a long and severe recession if there are multiple outbreaks of coronavirus as lockdown orders are relaxed, in minutes of their April meeting released Wednesday. The central bank officials cited an “extraordinary amount of uncertainty and considerable risks.”

Andrew Stettner, senior fellow at The Century Foundation said that in the 35 states that have begun to open their economies statewide, “initial claims only declined by 14 percent last week from the prior week.”

He said the data shows reopening the economy “does not necessarily equate with robust rehiring,” pointing out that among those 35 states, nine actually saw an increase in the number of new workers claiming benefits.

In Washington, Democrats and Republicans hold different views about whether another round of unemployment and small business aid is needed.

The House last Friday passed a mammoth $3 trillion stimulus bill that would expand some unemployment benefits and provide more direct payments to the public.

But Republicans and the Trump administration have said they want to wait and see the effect of three relief packages passed in March, and instead are moving forward on proposals to shield businesses from coronavirus-related lawsuits.

President Donald Trump has also signaled he opposes extending the weekly $600 boost in unemployment insurance authorized in one of the coronavirus rescue bills that is due to expire at the end of July.

Democrats’ latest $3 trillion coronavirus relief package would extend that sweetener through Jan. 31.

This blog originally appeared at Politico on May 21, 2020. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter. Prior to joining POLITICO in August 2018, Rainey covered the Occupational Safety and Health administration and regulatory reform on Capitol Hill. Her work has been published by The Washington Post and the Associated Press, among other outlets.


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Capitalism vs. Safety, Health: An Old Story Again

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The U.S. president recently ordered meatpacking employees back into workplaces plagued by coronavirus. He did not order the employers to make their slaughterhouses safe. GOP-proposed legislation exempts employers from lawsuits by employees sickened or killed by coronavirus infections at workplaces. The GOP is mostly silent about requiring employers to maintain safe or healthy workplaces. Employers across the country threaten workers who refuse to return to jobs they find unsafe. They demand that employees return or risk being fired. Job loss likely means loss of health insurance for employees’ families. Being fired risks also losing eligibility for unemployment insurance.

Employers are now going to extremes to evade the costs of safe and healthy workplaces. Recently, New Orleans’ authorities and their contractors fired their $10.25 per hour garbage collectors after a short strike. The strikers had demanded protective equipment against garbage possibly infected with the coronavirus and also $15 per hour “hazard” pay. New Orleans replaced the striking workers by contracting for nearby prison inmates paid $1.33 per hour and individuals from halfway houses. Capitalism’s iron fist hits the working class with this “choice”: unsafe job, or poverty, or slave labor with both.

Capitalism has always struggled to minimize outlays on workplace safety and health. Workers have protested this wherever capitalism became the prevailing economic system over the last three centuries. Upton Sinclair’s popular book, The Jungle, published over a century ago, exposed spectacularly unsafe and unhealthy conditions in Chicago’s meatpacking industry. The 1906 passages of the Meat Inspection Act and the Pure Food and Drug Act responded to public outrage over that industry’s working conditions. Coronavirus infection rates among employees of U.S. pork processing plants as high as 27 percent illustrate how employers forever “economize” on workplace health and safety.

The Occupational Safety and Health Administration (OSHA) within the U.S. Department of Labor was established in 1970. It sought to add more systematic federal government supervision and inspection to the regulations pressing employers to provide safe and healthy workplace conditions. Its mixed successes attest to the lengths employers will go to evade, weaken, or ignore efforts to enforce workers’ safety and health.

The profit-driven logic of capitalist enterprises incentivizes not spending capital on workplace safety and health conditions unless and until they deteriorate to the point of threatening profits. Capitalists and mainstream economics textbooks repeat endlessly that profit is every enterprise’s “bottom line.” Profitability measures each firm’s economic performance. Profits reward employers; losses punish them. Employers use capital to yield profits; that is their chief goal and priority. As objectives, workplace safety and health are secondary, tertiary or worse: obstacles to maximizing profits.

Capitalism has always sacrificed the safety and health of the employee majority to boost profits of its employer minority. That minority makes all the key enterprise decisions and excludes the employee majority from that decision-making. No wonder employers figure disproportionally among society’s rich, safe, and healthy, while employees figure disproportionally among the poor, unsafe, and unhealthy. Capitalism displays not only extreme inequalities of wealth and income, but also all their derivative inequalities: economic, political, and cultural. Pandemics expose and worsen them all.

In some times and places, capitalism’s iron fist wears velvet gloves. When profits are high and/or critics of capitalism ally strongly with its victims, employers may spend more on making workplaces less unsafe and less unhealthy. Otherwise, employers can and do spend less. If and when they fail to prevent government regulations mandating minimum health and safety standards, employers campaign to evade, weaken, and eventually repeal them. Employers usually repeat the same old arguments to block or undo regulations mandating safety and health standards. Such regulations, they insist, divert capital from productive uses (hiring workers) to “unproductive” uses (improving workers’ health and safety). Thus fewer workers will be hired, hurting the employee class. With such arguments employers have often succeeded and undermined workplace safety and health.

Capitalism’s long record of maintaining nearly constant unemployment—its “reserve army”—not only got workers to accept lower wages for fear of being replaced by more desperate unemployed. Unemployment also got employed workers to accept unsafe, unhealthy workplaces. Unemployment is a kind of torture by one class of another. It helps maintain lower wages and unsafe and unhealthy worksites. That is one reason why reduced labor needs are managed, in capitalism, not by keeping everyone employed but for fewer hours per week. That option is not generally chosen because firing a portion of the workforce—depriving those unfortunates of jobs—better disciplines workers to accept what they might otherwise reject.

In today’s situation, employers and the government, equally unprepared for the virus, did too little too late to prevent a dangerous pandemic. Sudden mass lockdowns led to mass unemployment. Expensive reconfiguring for social distancing, mass testing, cleaning and disinfection, etc., might have rendered jobsites safe and healthy. Instead, employers and their political spokespersons press employees back into unsafe, unhealthy workplaces. A “reopening the economy” is ordered. Employers get to impose unsafe and unhealthy workplaces by reframing the process as a patriotic return to a noble, national “work ethic.” Employers are counting on this sham drama now.

Consider this historic parallel: capitalists in the U.S. and elsewhere once regularly employed children as young as five years old. Their jobs’ safety and health conditions were mostly inadequate and often deplorable. Their pay fell well below that of adults. They suffered injury as well as physical, sexual, and emotional abuse. Schooling was neglected if not altogether absent. Yet capitalists insisted that economic well-being and prosperity required their access to child labor. Ending it would bring economic decline possibly “worse” than child labor. A reasonable “trade-off” was required. Employers argued that poor families needed and welcomed incomes from employed children. Employers also insisted, then as now, that they had spent all they could and all that was needed to provide adequately safe and healthy work conditions.

Working-class responses to child labor took time to develop the necessary understanding and political power. Once they did, child labor was doomed. Working-class parents confronted capitalists with a non-negotiable demand: overcome the horrors of child labor by ending it. Employers would have to find other ways to profit. Many did even as many others moved abroad where child labor is still allowed. They still do.

Today’s parallel non-negotiable demand: end unsafe and unhealthy workplaces. That requires differently organized workplaces. The majority, employees, must control their safety and health. It must be a higher priority than profit for the minority of owners, boards of directors, etc. Once again we meet society’s need for transition to a worker-coop based economy.

This article was produced by Economy for All, a project of the Independent Media Institute. Reprinted with permission.

About the Author: Richard D. Wolff is professor of economics emeritus at the University of Massachusetts, Amherst, and a visiting professor in the Graduate Program in International Affairs of the New School University, in New York. Wolff’s weekly show, “Economic Update,” is syndicated by more than 100 radio stations and goes to 55 million TV receivers via Free Speech TV. His two recent books with Democracy at Work are Understanding Marxism and Understanding Socialism, both available at democracyatwork.info.


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Economy Loses 20.5 Million Jobs in April; Unemployment Jumps to 14.7%

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The U.S. economy lost 20.5 million jobs in April, taking payroll employment back to levels last seen in spring 2011 when the economy was recovering from the Great Recession, and the unemployment rate jumped by a historic amount to 14.7%, according to figures released Friday by the U.S. Bureau of Labor Statistics. The unemployment rate for white males is 12.4%, the largest for white men in the post-World War II era and the first time it has been in double digits since that era.

Every sector saw job losses in April. The largest losses were in leisure and hospitality (-7.7 million), education and health services (-2.5 million), professional and business services (-2.1 million), retail trade (-2.1 million), manufacturing (-1.3 million), other services (-1.3 million), government (-980,000), construction (-975,000), transportation and warehousing (-584,000), wholesale trade (-363,000), financial activities (-262,000), information (-254,000), and mining (-46,000).

In April, unemployment rates rose among all major worker groups. The rate was 31.9% for teenagers, 18.9% for Hispanics, 16.7% for blacks, 15.5% for adult women, 14.5% for Asians, 14.2% for whites and 13.0% for adult men. The rates for all of these groups, except black Americans, represent record highs in the history of this measure.

The number of long-term unemployed (those jobless for 27 weeks or more) declined by 225,000 in April and accounted for 4.1% of the unemployed, as a sign of discouraged workers.

This blog originally appeared at AFL-CIO on May 8, 2020. Reprinted with permission.

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist. Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.


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