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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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How Will Workplaces Recover From COVID-19?

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As of May 25, 2020, there were over 1.6 million cases of COVID-19 in the US. At a survival rate of 98.6% (calculated for New York) most of these people will recover and live healthy lives again. Unfortunately, the same cannot be said of businesses that were locked down to control the spread of the pandemic. Although there has been so much loss and devastation for businesses, many companies are trying to reopen and prepare for bringing employees back to work.

To put things into perspective, the largest quarterly GDP decline observed during the Great Recession of 2008 was 8.4%. According to the figures that are emerging, we’re already facing a GDP decline of 30% to 40% in the second quarter of 2020. 

The US lost 2.6 million jobs in 2008. The recession killed 170,000 small businesses between 2008 and 2010. It happened when the GDP dipped by less than 10 percent and there was no pandemic. We still haven’t recovered from COVID-19 and the crippling social distancing measures that it has necessitated; and we’re already sitting at 30%-40% decline in GDP. 

A Model for Economic Recovery

Is there a projection for the economic recovery? From the very optimistic Z-shaped recovery to the increasingly probable L-shaped recovery curves, the variants of recovery projections include V, U, W, and even a shape that resembles Nike’s swoosh. Here’s a brief look at each.

  • The Z: The economy will bounce back to the pre-pandemic levels, cross that level, and settle back on its previous growth path.
  • The V: The losses during the pandemic will be irrecoverable; however, the economy will bounce back quickly to regain its earlier growth rate.
  • The U and the Swoosh: The recovery will take a long time, but the economy will eventually regain its momentum and growth. 
  • The W: The initial recovery will be interrupted by a second surge in the pandemic before final recovery. How many such surges will be there after the eventual recovery is not known.
  • The L: In the worst case scenario, the economic activity will not return to its pre-pandemic level of growth for a long time to come. 

How Long Will the Economy Take to Recover?

In the Great Recession, the total number of jobs did not return to November 2007 levels until May 2014. That was when businesses were not required to adhere to the new norm of social distancing.  

This time around, businesses that are reemerging from the lockdown will have to curtail economic activity because of the social restrictions. Airlines will be flying fewer travelers, offices will be able to accommodate fewer people in the workspace, restaurants will have fewer full tables at a time, and mass gatherings such as sporting events and concerts will probably remain prohibited for several years.

Will Some Businesses Benefit From the Crises?

While the overall impact of COVID-19 upon the workplace and business appears disastrous, there are sectors that are slated for accelerated growth. Robotics, face recognition, Internet of Things, touchless access control systems, cloud computing, remote working aids and tools, 5G technology, personal protective equipment, and pharmaceuticals are some of the businesses that are likely to emerge as winners from this crisis.

What Actions Are Being Taken to Help the Economic Recovery?

The United Nations Development Program (UNDP) has been tasked to provide the technical lead in the efforts for global socioeconomic recovery. UN teams covering 162 countries and territories will roll out this recovery plan in the next 12 to 18 months. The five pillars of the socioeconomic recovery strategy include:

  • Protecting health services and systems
  • Social protection and basic services
  • Protecting jobs and small- and medium-sized enterprises, and the most vulnerable productive actors
  • Macroeconomic response and multilateral collaboration 
  • Social cohesion and community resilience

Political and business leaders everywhere are stressing the need for a bold and ambitious recovery plan. In Europe, MEPs demanded a E2 trillion package last week to support people and businesses. António Guterres, the Secretary-General of the United Nations, has estimated the cost of a large-scale, coordinated and comprehensive multilateral response to be at least 10 percent of global GDP.

The US government has been quick to respond and has already taken many actions, such as the grant of $660 billion in forgivable loans to small businesses, $300 billion in recovery rebate checks to households, and $268 billion in increased and expanded unemployment insurance. 

Most of these measures are temporary, however. For example, the $1,200 checks to adults were one time. The unemployment insurance cover runs out in July and the forgivable loans cover eight weeks of payroll. A lot needs to be done a lot faster to keep a U shaped recovery from degenerating into an L.

This blog was originally produced by Swiftlane. Printed with permission.

About the Author: Imran Anwar is working as a content developer and future trends analyst at Swiftlane, a company providing facial recognition based touchless access control solutions to public and private organizations. Imran is a business graduate with vast experience of writing about future tech, business, and marketing. He can be reached at [email protected].


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Trump’s rollback of environmental rules will fail to bring back coal, report says

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“Can Coal Make a Comeback?” asks a new report by Columbia University researchers.

Spoiler alert: In its first few pages, the report states that President Donald Trump will almost certainly fail to bring jobs back to coal country or dramatically boost coal production.

Rolling back environmental regulations, as the Trump administration frantically sought to do during its first 100 days, will not “materially improve” economic conditions in the nation’s coal communities, according to the report.

During Trump’s presidential campaign, he repeatedly vowed to end a “war on coal” allegedly waged by the Obama administration. But as long as natural gas prices remain at or near current levels, U.S. coal consumption will continue to decline despite the Trump administration’s plans to roll back Obama-era regulations, the report says.

“Responsible policymakers should be honest about what’s going on in the coal sector?—?including the causes of coal’s decline and unlikeliness of its resurgence?—?rather than offer false hope that the glory days can be revived,” the report says.

The report was released by the Center on Global Energy Policy at Columbia University’s School of International and Public Affairs. It was authored by Jason Bordoff, the founding director of the Center on Global Energy Policy; Trevor Houser, a partner at consulting firm Rhodium Group; and Peter Marsters, a research analyst with Rhodium Group.

The report seeks to offer an empirical diagnosis of what caused the coal industry to collapse. It then examines the prospects for a recovery of coal production and employment by modeling the impact of Trump’s executive order directing agencies to review or rescind several Obama-era environmental regulations and assessing the global coal market outlook.

Even coal industry executives and coal country politicians have dialed down their rhetoric in recent months, according to the report. Robert Murray, CEO of Murray Energy and a Trump supporter, urged him to set more modest goals during the campaign and has warned post-election that there is little chance U.S. production can return to pre-recession levels.

Senate Majority Leader Mitch McConnell (R) also cautioned?—?after the election?—?that ending the “war on coal” might not bring jobs back to his home state of Kentucky.

The Columbia University report isn’t the first to rain on Trump’s coal parade. In a report released earlier this year, Bloomberg New Energy Finance emphasized U.S. coal’s main problem “has been cheap natural gas and renewable power, not a politically driven ‘war on coal.’”

But words of caution haven’t stopped Trump from waging a crusade for coal. Two weeks into his presidency, Trump signed a congressional joint resolution eliminating the Department of the Interior’s Stream Protection Rule finalized in 2016 by the Obama Administration that would have limited the amount of mining waste coal companies can dispose into streams and waterways. In late March, Trump signed the executive order that called on the EPA to “review” the Clean Power Plan, the agency’s carbon-reduction plan for new power plants.

“Many of these actions will take months for agencies to implement and will be challenged in the courts. But they are clearly designed to communicate Trump’s commitment to deliver on his campaign promises,” the Columbia University report said. “Indeed, he signed his March 28 [order] at the EPA in front of a group of coal miners, and after signing, turned to them and said, ‘C’mon fellas. You know what this is? You know what this says? You are going back to work.’”

In the report’s best-case scenario for coal that the authors modeled, U.S. production would see only a modest recovery to 2013 levels at just under 1 billion tons a year. In its worst-case scenario, consumption falls from 730 million short tons in 2016 to 688 million short tons in 2020 despite Trump’s aggressive rollback of Obama administration climate regulations.

Rather than bet on a recovery in coal production, coal communities, governments, and other private and public sector organizations should work together to “leverage the other assets” that exist in coal country to attract investment in new sources of job creation and economic growth, the study said.

“This certainly isn’t easy,” the authors wrote. “Coal communities in particular are often geographically remote and lack the infrastructure necessary to attract large-scale investment. Miners and others in the local labor market often lack the skills necessary for jobs that offer the kind of compensation available in coal mining.”

The federal government could offer plenty of help to accelerate locally driven economic diversification efforts, according to the report. Infrastructure investment, tax credits, and re-purposing of abandoned mine land that has other economic use can attract new investment and job creation, it says.

“But this all requires a clear-eyed assessment of the outlook for the coal industry and a commitment to put sustainable solutions ahead of politically expedient talking points,” the report says.

This article originally appeared at ThinkProgress.org on May 15, 2017. Reprinted with permission.

About the Author: Mark Hand is a climate reporter for Think Progress. Contact him at [email protected].


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Low-Wage Workers Hit Hardest by Workplace Injuries, Illnesses

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It’s a double whammy for low-wage workers when they get hurt or fall ill on the job.

First, they lose pay because the vast majority (more than 80%) of low-wage workers do not have any paid sick leave to take time off to recover. Second, not only does the pay check shrink, but because of inadequate workers’ compensation laws, they must shoulder a bigger portion of their health care costs with those smaller paychecks. That means workers and their communities must bear a larger share of the $39 billion (in 2010) that workplace injuries and illnesses cost the nation.  

A new policy brief, “Mom’s Off Work ’Cause She Got Hurt: The Economic Impact of Workplace Injuries and Illnesses in the U.S.’s Growing Low-Wage Workforce,” examines the growing problem.  

Using information from a study, by University of California, Davis, economist J. Paul Leigh, on the number and cost of injuries and illnesses among low-wage workers, Celeste Monforton, a professorial lecturer in environmental and occupational health at George Washington University School of Public Health and Health Services (SPHHS), and SPHHS researcher Liz Borkowski explore how workplace injuries and illnesses impact the lives of low-wage workers. Says Monforton:

Workers earning the lowest wages are the least likely to have paid sick leave, so missing work to recuperate from a work-related injury or illness often means smaller paychecks. For the millions of Americans living paycheck to paycheck, a few missed shifts can leave families struggling to pay rent and buy groceries.

Leigh’s study classifies about 31 million people—22% of the U.S. workforce—in 65 occupations for which the median wage is below $11.19 per hour as low-wage workers. The janitors, housecleaners, restaurant workers and others earning that wage full-time will bring home just $22,350 per year—an amount that means a family of four must subsist at the poverty line

In 2010, 596 low-wage workers suffered fatal on-the-job injuries and 12,415 died from occupational ailments, including certain kinds of cancer. Another 1.6 million suffered from non-fatal injuries, and 87,857 developed non-fatal occupational health problems such as asthma. The costs of the 1.73 million injuries and illness amounted to $15 billion for medical care and another $24 billion for lost productivity—the cost when injured or sick workers cannot perform their jobs or daily household duties.

But as Monforton and Borkowski point out, workers’ compensation insurance either does not apply or fails to cover many of these costs, which can bankrupt families living on the margin. In some cases, employers do not have to offer this kind of insurance to employees.

And even workers who do have the coverage often get an unexpected surprise after an on-the-job injury or illness: Insurers generally do not have to provide wage replacement until the worker has lost between three and seven consecutive shifts. And workers at the low end of the wage scale are often discouraged from reporting on-the-job injuries as work-related—which leaves them with no insurance benefits at all.

According to Leigh, insurers cover less than one-fourth of the costs of occupational injuries and illnesses. The rest falls on workers’ families, non-workers’ compensation health insurers and taxpayer-funded programs like Medicaid.

When low-wage workers miss even a few days of pay while recovering from an occupational injury or illness, the effects spread quickly,” says Borkowski.

They will usually have to cut back on their spending right away, which affects the local economy. And families with children might skip meals or cut back on the heat, money-saving tactics that can put vulnerable family members such as children at risk of developmental delays and poor performance in school.

The authors call on policymakers to address this public health problem more forcefully by improving workplace safety and strengthening the safety net to reduce the negative impacts caused by the injuries and illnesses that still occur. Says Monforton:

On average, more than 4,000 workers are injured on the job each day. If we make workplaces safer, we not only stop losing billions of dollars each year, but we also could reduce the pain and suffering and financial impact on thousands of low-wage, hard-working Americans and their families.

The reports are posted here: http://defendingscience.org/low-wage-workers.

This article was originally posted on AFL-CIO NOW on December 14, 2012. Reprinted with Permission.

About the Author: Mike Hall is is a a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journal and managing editor of the Seafarers Log. He came to the AFL- CIO in 1989 and has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety. When his collar was “still blue,” he carried union cards from the Oil, Chemical and Atomic Workers, American Flint Glass Workers and Teamsters for jobs in a chemical plant, a mining equipment manufacturing plant and a warehouse.


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Jobless Recovery? Yes. Profitless Recovery? Hell No.

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Image: Bob RosnerIf you feel like the recent recession screwed most of us over and left the fat cats even fatter, the next bit of information is going to really set you off. So I’d suggest that you go into the room with the most padding, remove all sharp objects and concentrate to keep your last meal down. Really, concentrate.

Last week American corporations announced their best quarter ever. $1.659 trillion in profits during the third quarter of 2010. Trillion, with a “T”.

For the last 60 years, since such things were tracked, that’s the biggest profit ever. Even bigger than 2006 when it was a paltry $1.655 trillion.

2006, when the unemployment rate was 4.6%.

Do you see a problem here?

Okay, I understand that today’s economy is full of uncertainty. And that it’s important for corporations to stash away some cash for a rainy day. But with $1.659 trillion in profits in just three months, isn’t it a good time to start hiring again to take the unemployment rate down from it’s current 9.6%?

I had feared that corporations would take advantage of the recession to drive down salaries and hiring. And that appears to be happening, although the business press tends to lump those two phenomenon into the phrase “increasing productivity.”

There is one major problem here, corporations need people with money to keep the 70% of the economy that is based on consumer spending running. The more corporations only see their profits, at the expense of actual markets where people can buy their products, well that’s the rub.

Employment and markets matter. I just fear that a trillion and a half in profits with an unemployment rate of 9.6% or 4.6% might not matter that much to the corporate corner-office crowd. But it makes a huge impact on society as a whole.

I know what you’re thinking. That I’m some kind of socialist. That couldn’t be further from the truth. I’ve got an MBA, I’ve taught at the MBA level and I’m current an executive for a company. It’s just that I take a longer view and think about who is really the foundation for our economy, the people with the paychecks that buy stuff. Whereas many corporate executives that I’ve talked to practice magical thinking where the people who buy stuff are separated from how the economy really functions.

It could be argued that the corporate sphincter muscle needed to be tight. But I can give you 1.659 trillion reasons why the time has come to relax it a bit and start spending some of the cash.

About The Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. Check the revised edition of his Wall Street Journal best seller, “The Boss’s Survival Guide.” If you have a question for Bob, contact him via [email protected]


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When Will The Recovery Begin? Never.

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The so-called “green shoots” of recovery are turning brown in the scorching summer sun. In fact, the whole debate about when and how a recovery will begin is wrongly framed. On one side are the V-shapers who look back at prior recessions and conclude that the faster an economy drops, the faster it gets back on track. And because this economy fell off a cliff late last fall, they expect it to roar to life early next year. Hence the V shape.

Unfortunately, V-shapers are looking back at the wrong recessions. Focus on those that started with the bursting of a giant speculative bubble and you see slow recoveries. The reason is asset values at bottom are so low that investor confidence returns only gradually.

That’s where the more sober U-shapers come in. They predict a more gradual recovery, as investors slowly tiptoe back into the market.

Personally, I don’t buy into either camp. In a recession this deep, recovery doesn’t depend on investors. It depends on consumers who, after all, are 70 percent of the U.S. economy. And this time consumers got really whacked. Until consumers start spending again, you can forget any recovery, V or U shaped.

Problem is, consumers won’t start spending until they have money in their pockets and feel reasonably secure. But they don’t have the money, and it’s hard to see where it will come from. They can’t borrow. Their homes are worth a fraction of what they were before, so say goodbye to home equity loans and refinancings. One out of ten home owners is under water — owing more on their homes than their homes are worth. Unemployment continues to rise, and number of hours at work continues to drop. Those who can are saving. Those who can’t are hunkering down, as they must.

Eventually consumers will replace cars and appliances and other stuff that wears out, but a recovery can’t be built on replacements. Don’t expect businesses to invest much more without lots of consumers hankering after lots of new stuff. And don’t rely on exports. The global economy is contracting.

My prediction, then? Not a V, not a U. But an X. This economy can’t get back on track because the track we were on for years — featuring flat or declining median wages, mounting consumer debt, and widening insecurity, not to mention increasing carbon in the atmosphere — simply cannot be sustained.

The X marks a brand new track — a new economy. What will it look like? Nobody knows. All we know is the current economy can’t “recover” because it can’t go back to where it was before the crash. So instead of asking when the recovery will start, we should be asking when and how the new economy will begin. More on this to come.

Robert Reich: Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President-Elect Obama’s transition advisory board. He has written twelve books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet; and his most recent book, Supercapitalism. Mr. Reich is co-founding editor of The American Prospect magazine. His commentaries can be heard weekly on public radio’s “Marketplace.”

In 2003, Reich was awarded the prestigious Vaclav Havel Vision Foundation Prize, by the former Czech president, for his pioneering work in economic and social thought. In 2008, Time Magazine named him one of the ten most successful cabinet secretaries of the century. He received his B.A. from Dartmouth College, his M.A. from Oxford University where he was a Rhodes Scholar, and his J.D. from Yale Law School.

This article was originally posted on Robert Reich’s Blog on July 09, 2009 and is reprinted here with permission from the author.


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