Since President Donald Trump and state governors mused on the idea of reopening the country, there has been a lot of discussion of what a return to normalcy might look like. It is safe to say that there is no going back. The Coronavirus has changed things – at least for this generation. The labor market is one of the many casualties of the societal transformation unfolding before our eyes. Whether this is for better or worse remains to be seen, but the primary objective right now is stabilizing the employment situation.
Initial Jobless Claims
According to the Department of Labor, initial jobless claims came in at 4.427 million for the week ending April 18; this is higher than the median estimate of 4.2 million. Those filing for unemployment clocked in at 15.976 million. The four-week average, which removes the week-to-week volatility, rose to 5.786 million.
Last week, the number of Americans applying for unemployment benefits surged 5.245 million, worse than the market forecast of 5.105 million. Continuing jobless claims were reported to be just shy of 12 million for the week ending April 4. The four-week average topped 5.5 million.
In total, approximately 26 million Americans have lost their jobs in five weeks. Does this mean the unemployment situation has reached its apex? This may be the case. Now, it is worth exploring what measures the government is taking to ensure a robust rebound.
The Immigration Fight
President Trump recently signed a proclamation that suspends immigration into the United States for 60 days. It bars new green card claims in several areas but does little to impact family reunification for immediate family members.
When this measure expires, it will be reviewed and possibly renewed. The president pledged to support and protect American workers during the COVID-19 crisis, ensuring that jobless citizens “will be first in line for jobs as our economy reopens.” Trump told reporters that he did not want unemployed Americans to compete for positions, preferring them to just return to work without another hurdle to overcome.
Proponents aver that this policy can help millions of Americans get back to work without worrying about competing for limited jobs in a tight labor market. Opponents contend that this is about the president deflecting blame and turning against immigrants.
Who is right? The answer to that question will be left to the punditry class in the political arena. For now, this is an America First lifeline that makes sense at present, explains Sarah Cowgill, Liberty Nation's National Columnist, and the go-to source for all Heartland-related matters.
"Facing a reopening of America, President Trump, who has always been an America First advocate, closes the door on immigration for the right reasons. It will not be indefinite. But it can aid the people suffering from a two-month lockdown. Middle Americans are rallying around the decision because it makes sense for the short term."
Reopening the Morgue
If you are under house arrest in a comfortable and opulent palace with a large inventory of artisan ice cream, it is easy to demand the federal government keep the nation closed. Any time there is a call to reopen the country, these folks living in their plush ivory towers repeat the same talking points about destroying society and killing your grandmother. While the national lockdown may have prevented the health care system from being overwhelmed, many households are struggling to keep their heads above water, even with a cash injection from Washington. The most vulnerable? Low-income workers.
During a recent White House daily briefing, Dr. Deborah Birx outlined a phased reopening that errs on the side of caution. The first stage permits businesses to resume operations with reduced capacity, and non-essential travel and social gatherings of more than ten people are discouraged. The second phase allows schools and daycares to open, businesses to relaunch with reduced capacity, and non-essential travel to resume. The final part builds a bridge to almost normalcy with some social distancing guidelines in place. Some states are moving ahead with their own plans.
In any event, a phased reopening might benefit low-income workers the most since their industries are likely to come back online first. The food-service sector was the hardest hit by the covidepression, accounting for most of the job losses. For the hundreds of thousands of low-wage workers, the country cannot open soon enough.
Small Business Aid
The U.S. government has come to the private sector's rescue, passing multi-trillion-dollar spending bills. Both the Congress and the Federal Reserve are extending billions to Wall Street titans and Main Street businesses in the form of aid, assistance loans, grants, and paycheck relief. In typical government fashion, the funds have dried up, or smaller companies are having difficulty accessing the money.
But will this funding benefit small businesses’ recovery efforts? The cash infusion will help keep the lights on, and people employed, allowing entrepreneurs to survive another day. What about next week or next year? The hard part is that there still needs to be a customer to generate revenue for the long-term. In this economy, it may be hard to attract shoppers who are ranking their financial priorities.
There has been a lot of talk of pent-up demand from many officials, including Treasury Secretary Steven Mnuchin. In the COVID-19 economic fallout, it might be hard to envision millions of consumers pouring into restaurants, clothing stores, or electronics departments after raiding their bank accounts to pay the rent or put groceries on the table. It could be a while until people refill their coffers, meaning they might refrain from going out to dinner as often as they did before or upgrading their living room furniture.
They will, however, rush to the nearest Supercuts to buzz off the quarantine look!
Cure or Nostrum
What Washington has done, from the fiscal to the monetary, has been unprecedented. In no other period have officials unleashed a tsunami of dollars into the economy to mitigate a disaster in such a short amount of time. Everyone is stimulated with all this spending, from multi-national corporations to the family of five to the little guy with a fruit stand on Drury Lane. For some, it is not enough to keep millions of heads above water. For others, it is too much and will ultimately bankrupt the nation. Whether it is an effective antidote or a placebic sugar pill, the establishment has thrown everything but the kitchen sink at the pandemic. The ocean of data coming through the pipe in the coming months and years will show if it was all worth it or if it was the politicians' budget-busting crusade that only bandaged the hemorrhaging.
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Read more from Andrew Moran.
