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Employment won’t recover for a decade, CBO says

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The economic outlook for the next 10 years has “deteriorated significantly” since the CBO issued its last complete set of projections in January.

The nation’s unemployment rate will remain stubbornly higher for the next decade than it was before the pandemic, while economic output will be depressed for years under current tax and spending policy, the Congressional Budget Office said on Thursday.

The economic outlook for the next 10 years has “deteriorated significantly” since the independent budget agency issued its last complete set of projections in January, CBO noted. That illustrates the devastating effects of the pandemic and underscores the reality of a slower economic recovery than the “rocket ship” rebound predicted by President Donald Trump.

CBO assumes that if federal taxes and spending remain in place, the economy will grow rapidly in the third quarter of this year. But compared to earlier estimates, real GDP will be 3.4 percent lower, on average, for the next decade. The annual unemployment rate, which was projected to average 4.2 percent, is now projected to average 6.1 percent during the same period.

The calculations do not take into account any changes that could occur with the passage of an additional emergency relief bill that Congress is expected to take up prior to the August recess.

The four laws enacted by Congress in response to the outbreak and economic downturn will “partially mitigate the deterioration in economic conditions and help spur the recovery,” CBO said.

“Low-income families have borne the brunt of the economic crisis, partly because the hardest-hit industries employ low-wage workers,” the agency said. “African American, Hispanic, and female workers have been hit particularly hard, in part because they make up a disproportionate share of the workforce in certain industries with jobs that involve elevated risks of exposure to the coronavirus.“

While the estimates follow a positive jobs report for June, several states that rushed to restart their economies in recent weeks are experiencing huge spikes in infection rates, prompting some governors to roll back their reopening plans.

CBO cautioned that the numbers “are subject to an unusually high degree of uncertainty, which stems from many sources, including incomplete knowledge about how the pandemic will unfold, how effective monetary and fiscal policy will be, and how global financial markets will respond to the substantial increases in public deficits and debt.“

The agency’s 10-year outlook provides estimates that the Trump administration decided to scrap this summer. On Wednesday, the White House quietly published its mid-session review of federal spending, forgoing the updated economic projections that have usually been included by administrations for the last several decades.

“Any such estimates would be entirely speculative, given the range of uncertainty underlying potential future paths of economic growth,” the review said.

But the lack of data has earned backlash from fiscal hawks.

“In the midst of a national public health and economic crisis, full and transparent budget projections are more important than ever,” said Michael Peterson, CEO of the Peter G. Peterson Foundation, which advocates for awareness of the nation’s long-term fiscal health.

“The Mid-Session Review traditionally offers critically important insights for lawmakers and the public, taking into account the state of America’s economy and our fiscal condition,” he said. “Unfortunately, this report excludes a lot of this valuable information, which represents a lost opportunity to help guide vital decisions about our nation’s future.”

CBO Director Phillip Swagel has already warned that the economic downturn sparked by the global coronavirus outbreak will be much tougher to fix than the 2008 financial crisis.

“It’s more challenging for policymakers to support the economy given the depth and breadth of this pandemic,” he said last month at a virtual forum hosted by the Peterson Foundation.

And in a recent letter to House Speaker Nancy Pelosi, Swagel cautioned that any boost in economic activity will be “tempered” as long as some social distancing continues.

In April, CBO predicted that the federal response to the coronavirus pandemic will explode to nearly $4 trillion this year. Federal debt held by the public will be 101 percent of gross domestic product by the end of the fiscal year.

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

About the Author: Caitlin Emma covers the federal budget and congressional spending bills on Capitol Hill for POLITICO Pro. Prior to that, she spent five years as an education policy reporter for Pro.


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Minimum wage rises some places, but it’s still the COVID-19 economy

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Unemployment remains sky-high (no matter what Donald Trump tries to tell you), and four million workers have had their pay or hours cut due to the pandemic. For people who are still on the job, there’s some good news in some cities and states in the form of minimum wage increases that went into effect on July 1.

In Illinois, the minimum wage went from $9.25 an hour to $10. In Oregon, it went from $11.25 to $12. In Nevada, workers with health insurance will have an $8 minimum wage and workers without health coverage will get $9, up from $8.25. The minimum wage in Portland, Oregon, went from $12.50 to $13.25. Chicago rose from $13 to $14. More than a dozen other cities—most of them in California—and three counties had increases, too. The problem is that many workers, even those who are still employed, aren’t getting the hours they need to get by. 

This blog originally appeared at Daily Kos on July 4, 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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Why temporary layoffs may become permanent

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Forty-two percent, or 11.6 million, of all jobs lost through April 25 due to Covid-19 will become permanent, according to the University of Chicago.

The White House is downplaying the bulk of coronavirus-related layoffs as temporary. But as the worsening recession forces companies to downsize or shut their doors, economists warn that many of these departures will turn permanent.

The unemployment rate for May is expected to hit about 20 percent, coming on top of April’s 14.7 percent. Those statistics — likely underestimates because workers must be “actively looking” for jobs to be counted — would be the highest since the Great Depression.

But President Donald Trump’s advisers have found a different number to seize on: a Federal Reserve estimate, released earlier this month, that 91 percent of people who lost their jobs or were furloughed reported that they expect to return to the same employer eventually. This statistic, the administration officials say, is part of the reason the U.S. should reopen its economy.

“Besides the stock market, there are little glimmers,” Trump’s economic adviser, Larry Kudlow, said last week. “I don’t want to downplay the heartbreak because the numbers are not good for this quarter — bad, bad pandemic contraction — but there are little glimmers. A lot of the unemployed are temporary.”

But economists say shifting demands and the sheer breadth of the business closures mean that many of the lost jobs will never return — and to lean on the statistic as a sign of economic well-being is politically risky.

“That’s a high number, and that’s good,” said the Economic Policy Institute’s Heidi Shierholz, former chief economist at the U.S. Department of Labor, of the workers’ optimism about returning to their jobs. “But I think we absolutely have to think of that as an upper-bound on how many will be called back.”

“And what we don’t know is how much lower than that … will it ultimately be. The concern is that it’s going to be a lot lower.”

Forty-two percent, or 11.6 million, of all jobs lost through April 25 due to Covid-19 will become permanent, according to research from the University of Chicago’s Becker Friedman Institute. The study places these in three buckets: jobs lost to coronavirus-induced demand shifts, jobs at firms that don’t survive the pandemic and jobs lost due to post-pandemic concerns, such as social distancing.

“I understand that the administration and other folks are optimistic,” the conservative Heritage Foundation’s Paul Winfree, a former Trump aide, said of the temporary layoff numbers. But “I don’t think I can get behind those estimates.”

“We’re going to be dealing with this unemployment problem for quite some time,” Winfree said. “And ultimately, it’s going to plague the economy for months, if not years.”

Businesses in some of the hardest-hit industries have already announced thousands of closures. As of April, about 3 percent of restaurants in the country, once temporarily shuttered, have permanently closed, according to the National Restaurant Association. And manufacturing giants like Caterpillar, Polaris and Goodyear Tire and Rubber Co. are shutting down their once-furloughed factories for good, The Wall Street Journal reports.

“You probably had a lot of businesses in absolute good faith say ‘we’re going to call you back’ totally thinking they were going to, but will never do it,” Shierholz said. “Many may go out of business. And two, it’s very probable that in many cases [when they do reopen] they won’t need everyone.”

Even if businesses make it through the pandemic, continued social distancing and other altered consumer behavior mean that many of them are unlikely to be able to rehire their temporarily laid-off or furloughed workers, economists say.

“If it’s the case that for the next two, three years, far fewer people are going to go out and eat at restaurants, if cinemas and movie theaters are going to have to have semi-permanent social distancing reducing their capacity, then a lot of these businesses will become nonviable and these jobs will be permanently lost,” said Ryan Bourne, an economist with the libertarian Cato Institute.

By touting the majority of layoffs as impermanent, Bourne said, the White House is creating a dangerous precedent given the large degree of uncertainty.

“There’s a political danger to implying that things will just go back to normal, which is that you create the expectation that you’re willing to do what it takes to ensure that happens,” Bourne said. “If I was somebody in the Trump administration, I would not be wanting to create the expectation that 90 percent of existing work relationships … were highly likely to return because I think there’s still a huge degree of uncertainty as to whether that will happen.”

This blog originally appeared at Politico on May 28, 2020. Reprinted with permission.

About the Author: Eleanor Mueller is a legislative reporter for POLITICO Pro, covering policy passing through Congress. She also authors Day Ahead, POLITICO Pro’s daily newsletter rounding up Capitol Hill goings-on.


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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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Essential Workers Fight for Their Lives

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At a time of record unemployment, Cintya Medina feels lucky to have a job at the Barnes & Noble warehouse in Monroe, N.J.—but she does not want a job that puts her in danger.

When Medina and her coworkers learned of several confirmed Covid-19 cases at the warehouse, they organized a protest on April 7 to demand a two-week shutdown and full cleaning.

“If you continue to make workers like me go back to work, you’re not going to stop the spread of the virus because it’s highly contagious,” Medina tells In These Times in Spanish through a translator. She also questioned why the chain bookseller was forcing employees to come in at all: “It doesn’t make sense that we continue to be open because we’re not essential right now.” Businesses deemed essential, such as pharmacies and grocery stores, have special exceptions to operate during pandemic lockdown orders.

Medina is one of millions of workers who are stuck with the impossible choice between protecting their health and getting a paycheck. More than 20 million others cannot work at all, laid off from their jobs and left wrangling with their local unemployment office. Many are simply excluded from other benefits, all while the country hurtles toward a depression.

The workers faring best during the pandemic are those with high wages, access to healthcare, paid sick leave and the ability to work from home. But those benefits are exceedingly rare for much of the workforce, says Heidi Shierholz, director of policy at the Economic Policy Institute, a labor-oriented think tank. The coronavirus crisis has “uncovered the weakness in our social safety net,” she says. More than 40% of workers are employed in low-wage jobs and some 28 million non-elderly adults lack health insurance. Moreover, federal data suggests only about 30% of workers have the ability to work from home—and the rate is even lower for black and Latino workers. 

Workers making poverty wages in precarious jobs were struggling to survive well before the pandemic. Now, besieged by economic devastation and a public health crisis, they are in a fight for their lives. Just as the virus has exposed the vicious inequities ingrained in the country’s economic hierarchy, so is it galvanizing workers to organize for safe workplaces, fair pay, decent medical leave and the right to challenge bosses who put them in harm’s way.

Low Pay, Essential Work

Jake Douglas made $14 an hour as a driver for United Airlines’ catering service at Denver International Airport, but he took a voluntary unpaid layoff in late March. His partner is immunocompromised, and Douglas worried about potentially getting infected. Ironically, his decision to try to protect his health could cost him his healthcare. Though Douglas remains on his employer-sponsored health plan, he has lost his income, is still waiting to get benefits from the state’s overwhelmed unemployment-claim system, and fears he might no longer be able to afford his health insurance payments. Meanwhile, he suffers from a longstanding shoulder injury that hampers his employment options.

“I don’t know how I’m going to be able to return to work without physical therapy at a minimum, but probably surgery,” he says. “And so I’m just really nervous … I do not know what I’m going to be able to do to survive this thing if it drags on.”

Douglas’ economic precarity is shared by millions of laid-off workers, who are disproportionately women, black or Latino.

Rebecca Dixon, executive director of the National Employment Law Project, says the economic devastation of the coronavirus will “be tremendously damaging for lower-wage workers, who tend to not have savings and assets to withstand economic shocks like this.”

The CARES Act—the federal stimulus package passed in late March—was intended to cushion the job losses precipitated by the pandemic. Its expansions of unemployment assistance include an extra $600 tacked onto state unemployment benefits, plus an unprecedented extension of assistance to the self-employed, such as Uber and Lyft drivers and other gig workers.

But Shierholz argues unemployment insurance is not an ideal way to deliver relief to dislocated workers. Mass layoffs, she says, would ultimately slow down the recovery, by requiring businesses to rebuild their workforce from scratch as they reopen. “It’s incredibly better for both workers and businesses to furlough but not lay off,” she says. “But we don’t really have a culture of holding onto workers during a downturn and then just bringing them back online after the downturn is over.”

Several European governments have opted to preserve jobs by subsidizing companies to keep workers on their payrolls. By contrast, the U.S. relief package offered an extremely limited pool of supplementary loans for small businesses to avoid laying off staff (which was quickly exhausted, and hastily replenished), while hundreds of billions of dollars were funneled into massive hotel, retail and supermarket corporations—largely free of any concrete mandates to retain workers.

In other words, lawmakers have opted to make unemployment more bearable rather than compel employers to furlough workers and preserve their livelihoods.

Even workers who receive several hundred dollars a week in unemployment benefits could be devastated by the loss of their employer-sponsored healthcare.

The coronavirus “really lays bare the inhumanity of employer-sponsored health insurance,” says Rebecca Givan, a professor of labor and employment relations at Rutgers University.

The Economic Policy Institute estimates some 3.5 million laid-off workers lost their employer-sponsored health plans between mid-March and early April—just as their families (who likely shared those health plans) will need care to deal with the growing public health crisis.

None of the federal stimulus acts have expanded healthcare coverage, aside from providing funds for hospitals and testing, although Democratic lawmakers have proposed expansions of Medicaid and of some private insurance coverage.

Givan emphasizes that millions of workers never had insurance in the first place for myriad reasons, whether they were undocumented, or their jobs never offered it, or they couldn’t afford it. Many are still working without healthcare, often in frontline jobs that expose them to health risks every day, as they staff grocery stores, clean hospitals and deliver goods.

“We’re saying, ‘Do this job that’s essential to the functioning of our society … and you will risk being infected with this virus,’ ” Givan says. “And if that happens, you’ll be left with large bills or with no access to care, whether that’s because you’re undocumented, uninsured or under-insured.”

Underpaid Heroes

A worker’s ability to stay healthy amid the pandemic hinges on their ability to take time off without sacrificing their wages. Prior to the coronavirus outbreak, seven in 10 low-wage workers did not have a single paid sick day. The recently passed Families First Coronavirus Response Act provides two weeks of paid leave for full-time employees affected by Covid-19. Additionally, the CARES Act temporarily extends federal family medical leave laws to provide workers with limited wage replacement for the care of a child, for up to 12 weeks.

But again, the protections are patchy. The paid leave and child care provisions exclude private employers with 500 or more employees and allow an exemption for firms with fewer than 50 employees. These carve-outs could effectively exclude up to 106 million private-sector workers, including millions of the poorest.

Josh (a pseudonym to protect him from employer retaliation) is a Walmart pharmacy assistant in Illinois and a self-described “Walmart baby”—the son of Walmart employees. He fears that, while keeping the nation’s largest retailer operating, he and his parents are exposed daily to hazardous conditions. Although workers have some protective equipment, he says, what they really need is adequate paid leave to protect themselves and their families.

In March, Walmart announced a new two-week paid leave policy for employees who test positive for the virus—but it excludes workers who, for example, are immunocompromised or tending to ill family members. Josh, who is part of the worker advocacy group United for Respect, notes that people are reluctant to actually use what paid leave they have in fear of “repercussion from management.”

“For [my parents] to not be treated and protected on a daily basis … just irks me to the highest degree,” Josh says. He suggests workers be compensated with hazard pay, so they can at least have their “essential” role reflected in their paycheck.

“[People say] we’re heroes and everything—but it doesn’t feel like we’re heroes,” Josh adds. “It feels like we don’t have a choice.” With hazard pay, “at least [workers] might get a little bit of solace in knowing that, ‘Hey, I’m working during this. My job’s important.’ Helping people is definitely worth more than $8 an hour.”

Demanding A Just Workplace

Some workers in high-risk jobs are banding together to demand their bosses do more to keep them safe.

Jordan Flowers, a worker at Amazon’s JFK8 facility in Staten Island, protested alongside coworkers in late March and early April to demand the company close its workplace until it could be fully sanitized, as reports emerged that as many as 25 workers had contracted Covid-19. “We’re in a warehouse of 5,000 people,” Flowers says. “You never know who is sick.”

The walkouts at JFK8 followed similar actions at Chicago and Detroit Amazon facilities, and were part of a national campaign to expand paid leave policies for affected workers. (Amazon provides two weeks of paid leave only for employees diagnosed or quarantined with Covid-19.)

Workers who help secure the nation’s food supply are also demanding respect and fatter paychecks.

Unionized grocery workers with United Food and Commercial Workers (UFCW) have successfully pressured several large supermarket chains and food producers to secure hazard pay, extra sanitation provisions and paid leave for hundreds of thousands of members. Workers at non-unionized chains, such as Trader Joe’s, are also campaigning for improved safety protections and hazard pay. (Trader Joe’s has made some reforms, like additional paid leave, but at the same time, sent employees a strident antiunion letter to deter organizing.) Meanwhile, Instacart workers—who provide home grocery delivery services for various outlets—went on strikein late March to demand safety equipment and $5 per order in hazard pay.

Meat-processing workers have mobilized to refuse work at claustrophobic plants where hundreds of Covid-19 cases have surfaced. An estimated 830 workers at the JBS USA meat-processing plant in Greeley, Colorado, called off work en masse, and about 50 Perdue chicken-processing workers walked off the job in late March. After some plants temporarily shuttered following outbreaks, President Trump ordered in late April that they remain open as a “critical industry.”

Some of the lowest-paid food service workers are agitating for better safety protections as well. In early April, McDonald’s workers staged protests and walkouts in Los Angeles, St. Louis and other cities to demand hazard pay and adequate safeguards. In San Jose, 26-year-old drive-through worker Irving Garza staged an informal strike with several coworkers to demand hazard pay and safety gear. Customers are constantly hovering within a few feet of his window, most not wearing masks. “I’m breathing the same air that they’re breathing … so I’m putting myself at a big risk,” he says.

Some companies, including Amazon, Instacart, JBS USA, Perdue, McDonald’s and Barnes & Noble, have introduced new safety measures, such as more intensive cleaning, masks and social-distancing rules, and in a few cases, provided additional paid sick leave for Covid-19.

But, fundamentally, workers are standing up for something more: a voice. In terms of physically safeguarding workers’ health, Givan explains, employers can offer protections at their discretion, but “anything that’s given by the good grace of the employer can be taken away just as easily.”

During the McDonald’s protests, the company announced plans to increase safety protections at its restaurants, including distributing masks and hand sanitizer—though it admitted the rollout was still in process at its restaurants, most of which are independently operated franchisees. As of mid-April, protests continued. Garza, who relies on his fast-food job to support his mother and several siblings, returned to work after his manager provided additional safety equipment, but since going on strike, his hours were cut in half.

“McDonald’s should listen to its workers … because they are all at the bottom of the pyramid,” he says. To the bosses, he says, “And we’re not serving you. You are serving us, because we’re the ones that are working. We’re the ones who are making the sales happen, who are working on the line … so just listen to the workers.”

No Papers, No Relief

Many of the workers hardest hit by the pandemic, whether they are laid off or soldiering on in their essential jobs, will receive no support from federal relief legislation—because they are undocumented.

According to the Migration Policy Institute, some 6 million immigrant workers—both with and without legal status—work in “frontline industries,” such as healthcare and manufacturing medicine and soap. Immigrant workers, a large share of them undocumented, hold about a quarter of construction and extraction jobs. Yet undocumented workers are excluded from most federal benefits programs.

So people like Fredy Moreno, an undocumented construction worker in the Twin Cities, won’t get the $1,200 stimulus check other households look forward to. But he has bigger worries, like the more than $13,000 he says he is owed by a previous employer. With the economic downturn compounding his prior employer’s wage theft, Moreno is desperate to get back to work despite the health risks.

“I don’t have the rent,” Moreno says through a Spanish translator. “I don’t have money to buy food for my family. I have a small child. … I don’t have money to go out and buy diapers—if there are even diapers to go buy. It’s been pretty difficult.”

With construction jobs drying up, Moreno laments the exclusion of undocumented workers, who contribute roughly $27 billion in local, state and federal taxes annually, from the federal relief package. “I think that we should be included,” he says, “because we also work, and we also pay taxes … and I think our families also matter.”

While the federal relief package shuts out undocumented workers, several immigrant-focused labor groups, such as the National Day Laborer Organizing Network (NDLON), Make the Road New York and Alianza Agrícola, have launched relief funds for workers or pressed state lawmakers to help undocumented workers access aid. In mid-April, NDLON sent a “protest caravan” to California’s statehouse. A day later, Democratic Gov. Gavin Newsom announced a statewide $125 million relief fund for immigrant workers, regardless of status.

Viral Resistance

Some labor advocates hope the pandemic, and the worker uprisings it is spurring, could compel policymakers, employers and the public to address critical gaps in the welfare system and to start to give frontline workers the respect and fair compensation their essential labor deserves.

The crisis might ultimately “create a moment in the public dialogue and in the political imagination about the choices that we’re making,” says Wendy ChunHoon, executive director of Family Values @ Work, an advocacy group focused on paid leave policies. “Because we could value childcare and care jobs, and the entire care infrastructure … as [equally] important as the carveouts that we’re giving [to] large corporations right now. It’s a choice that we’re making as a country—we could choose differently.”

Kent Wong, director of the Labor Center at the University of California, Los Angeles, says the pandemic “has exposed fundamental basic contradictions in the way public policy has been formulated to benefit the narrow interest of the wealthiest corporations and individuals in the country, at the expense of the vast majority.” He adds the ongoing economic devastation could spur “public demand to address some of these basic structural issues within our society” to provide “a sustainable standard of living for working people.”

Right now, most workers are focused on protecting their health and feeding their families. But the momentum of grassroots organizing in the face of Covid-19 could eventually inspire more workers to form unions, call for comprehensive family-leave policies and demand employers protect jobs through arrangements like work-sharing, which allows employers to use the unemployment system to reduce work hours while avoiding layoffs.

General Electric workers recently agitated at plants in Massachusetts, New York, Texas and Virginia, not only for health protections at work but for jobs that protect the health of others. As members of the Industrial Division of the Communications Workers of America, they demanded better sanitary conditions and expanded paid leave, along with the conversion of factories where workers have been laid off—which usually produce industrial parts, such as generators and jet engines—to manufacture respirators for coronavirus patients.

Douglas, the former airline-catering employee, is organizing with other airport and service-industry workers under the banner of the Denver Democratic Socialists of America to pressure the city and state government to cancel rent, mortgage and utility bills for 90 days. Rep. Ilhan Omar (D-Minn.) introduced a similar federal bill to cancel rent and mortgage payments, which has been co-sponsored by Democratic Reps. Alexandria Ocasio-Cortez (N.Y.), Pramila Jayapal (Wash.), Ayanna Pressley (Mass.) and Rashida Tlaib (Mich.), among others.

“All of us feel that if we can’t work, we can’t pay,” Douglas says. As more residents are laid off, then “there’s a tipping point and a crisis coming regardless, and our local elected officials need to do everything they can to support us right now, because the system can’t sustain itself.”

The economy “will never be what it was before,” says Erica Smiley, executive director of the workers’ rights group Jobs with Justice, but says the labor movement has a chance to organize for a more just future. “The question is, will [post-pandemic society] be reorganized to continue to move more resources to those at the top? … Or will it be forever changed in a way that more ordinary people are put into positions to make decisions about our general health and well-being as a society?” Smiley says.

“It will be a fight either way.”

This blog originally appeared at In These Times on May 21, 2020. Reprinted with permission.

About the Author: Michelle Chen is a historian based in New York City, a contributing writer at In These Times and The Nation, a contributing editor at Dissent and a co-producer of the Belabored podcast.


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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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Labor Is Pioneering a New Kind of Relief Effort in the Twin Cities

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Scores of workers across America have been laid off through no fault of their own, and still many of them are not eligible for federal benefits during these unprecedented times. In Minnesota’s Twin Cities, the Minneapolis Regional Labor Federation (MRLF) is organizing to provide support to those workers who can’t get the support they need from our federal government.

Led by President Chelsie Glaubitz Gabiou (UFCW), the MRLF is pioneering a new kind of initiative focused on filling that gap. The Twin Cities Hospitality Relief Effort is specifically designed to help laid-off hospitality workers who are being left behind. The labor federation is giving direct one-on-one assistance to dozens of these workers who need immediate help with health care, housing and money to survive.

“A lot of hospitality workers are not eligible for government assistance for a number of reasons: they receive much of their income from tips, they have families with mixed immigration status, they received a combination of wages and 1099 forms, or they worked for many different employers over the course of the year,” Glaubitz Gabiou explained. “These workers come from an industry that was the first to shut down, and they have a very long recovery ahead.”

The MRLF has 16 people trained to provide navigation services, and they are in place to keep the relief effort going. The navigators are doing direct outreach to those who need help the most, and they interact with community partners and government agencies to provide tailored support for each individual. They are a mix of union organizers, laid-off workers and labor federation staff, and many of them are bilingual. Their conversations with the people receiving help also has an organizing component, as the labor federation is promoting union values to these laid-off workers.

“The way that this team of front-line workers is coming together to take care of other workers in this industry is inspiring,” Glaubitz Gabiou said. “They’re helping people negotiate payment plans with their landlords, get access to active food resources and pharmaceuticals, and much more.” She pointed out that they have helped more than 150 laid-off workers and their families—90% of whom do not have access to unemployment insurance benefits.

The MRLF’s Twin Cities Hospitality Relief Effort is operating in close collaboration with its affiliates, including UNITE HERE Local 17, Theatrical Stage Employees (IATSE) Local 13 and the Restaurant Opportunities Centers United. The initiative is receiving financial support from the LIFT Fund, the city of Minneapolis, Ramsey County, Minnesota, the Greater Twin Cities United Way, the Minnesota Nurses Association-NNU and UNITE HERE. The coalition recently held an online bingo tournament that raised nearly $5,000. And this funding is being used to support the relief effort and provide $200 cash grants to those laid-off workers who meet minimum standards.

“We have to keep fighting and scraping for people to take seriously the state that all workers are in,” Glaubitz Gabiou said. “It’s not just about surviving right now; we’re working to make sure we recover more resilient in the future.”

This blog originally appeared at AFL-CIO on May 13, 2020. Reprinted with permission.

About the Author: Aaron Gallant is a contributor for AFL-CIO.


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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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Unemployment insurance boost is tiny next to tax cuts for the rich, this week in the war on workers

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Republicans are doing their best to push people off of unemployment, with governors reopening states so that the most vulnerable workers are forced back into unsafe workplaces. But the Economic Policy Institute’s Josh Bivens and Heidi Shierholz write that the extra $600 in unemployment insurance has been the best economic response to coronavirus—and it needs to be extended.

“Money spent on continuing crucial unemployment insurance provisions will help avoid a prolonged period of high unemployment that will do far more serious and persistent damage to the economy,” they write. “In the last six weeks, close to 30 million workers have applied for unemployment insurance. It’s worth noting as a point of comparison that those 30 million workers would need to be provided an extra $1,400 per week for a year to match the fiscal size of the 2017 tax cuts aimed at corporations and the rich.”

This blog originally appeared on Daily Kos on May 9, 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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Mass Unemployment Is a Failure of Capitalism

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HaymarketBooks.org

The difficulties caused to workers by record unemployment during the pandemic are a product of capitalism. Most of the time, employers decide to hire or fire workers depending on which choice maximizes employers’ profits. Profit, not the full employment of workers nor of means of production, is “the bottom line” of capitalism and thus of capitalists. That is how the system works. Capitalists are rewarded when their profits are high and punished when they are not. It’s nothing personal; it’s just business.

Unemployment is a choice mostly made by employers. In many cases of unemployment, employers had the option not to fire employees. They could have kept all employed but reduced their hours or days or else rotated off-work times among employees. Employers can choose to retain idled employees on payrolls and suffer losses they hope will be temporary.

However, unemployment is received almost everywhere and by almost all as a negative, unwanted experience. Workers want jobs. Employers want employees producing profitable output. Governments want the tax revenues that flow from employees and employers actively collaborating.

So why has the capitalist system periodically produced economic downturns wherever it has settled across the last three centuries? They have happened, on average, every four to seven years. The United States has had three crashes so far this century: “dot-com” in 2000; “sub-prime mortgage” in 2008; and now “coronavirus” in 2020. Thus the United States conforms to capitalism’s “norm.” Capitalists do not want unemployment, but they regularly generate it. It is a basic contradiction of their system.

There are good reasons why capitalism produces and reproduces unemployment over time. It draws benefits (as well as suffers losses) from doing so. Reproducing a “reserve army of the unemployed” enables periodic upsurges in capital investment to draw more employees without driving up wages. Rising wages—and thus falling profits—would accompany investment surges if all workers were already fully employed before such surges. Unemployment also disciplines the working class. The unemployed, often desperate to get jobs, give employers the opportunity to replace existing employees with unemployed candidates willing to work for less. Unemployment thus operates as a downward pressure on wages and salaries and thereby a boost for profits. In short, capitalism both wants and does not want unemployment; it expresses this tension by periodically adding to and drawing down a reserve army of the unemployed that it continually maintains.

That reserve army exposes a stark reality that no ideological gloss ever fully erases. While unemployment serves capitalism, it does not well serve society. That key difference is most glaringly in evidence when unemployment is very high, as it is today. Consider that today’s many unemployed millions continue much of their consumption while ceasing much of their production. While they continue to take their means of consumption from socially produced wealth, they no longer produce nor thereby add to social wealth as they did when employed.

Unemployment thus entails wealth redistribution. Part of the wealth produced by those who are still employed must be redistributed away from them and to the unemployed. Taxes accomplish that redistribution publicly. Employees and employers, labor and capital struggle over whose taxes will fund the consumption of the unemployed. Such redistribution struggles can be and often are bitter and socially divisive. In the private sphere of households, portions of the incomes and wealth of the employed likewise get redistributed to enable consumption by the unemployed: spouses share, as do parents and children, relatives, friends, and neighbors. Working classes always redistribute their incomes and wealth to cope with the unemployment capitalism so regularly imposes on them. Such redistributions typically cause or aggravate many tensions and conflicts within the working class.

Many public and private redistribution struggles could be avoided if, for example, public re-employment replaced private unemployment. If the state became the employer of last resort, those fired by private employers could immediately be rehired by the state to do socially useful work. Governments would stop paying unemployment benefits and instead pay wages to the re-employed, obtain in return real goods and services, and distribute them to the public. The 1930s New Deal did exactly that for millions fired by private employers. A similar alternative to private capitalist employment and unemployment (but not part of the New Deal) would be to organize the unemployed into worker co-op enterprises performing socially useful work on contract with the government.

This last alternative is the best because it could develop a new worker-co-op sector of the U.S. economy. That would provide the U.S. public with direct experience in comparing the capitalist with the worker-co-op sector in terms of working conditions, product quality and price, civic responsibility, etc. On that concrete, empirical basis, societies could offer people a real, democratic choice as to what mix of capitalist and worker-co-op sectors of the economy they prefer.

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

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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