Saturday marked the 31st week of Americans filing massive unemployment insurance claims to lessen the impact of economic fall-out from the Pandemic Recession. The Department of Labor reported Thursday that 1.1 million workers filed initial claims last week, 787,000 for regular state benefit and 345,440 under the federal Pandemic Unemployment Assistance program. That’s about 47,000 fewer than the previous week. Over the five weeks from mid-March through mid-April, initial filings hit a cumulative 26.3 million. Each week since then has seen at least a million new initial filings, nearly five times the pre-pandemic average.
With the spread of the coronavirus rising or holding steady in every state, stay-at-home orders and business closures seem certain to rise as well, which means more people being laid off, an increase in permanent job loss, and more people giving up and leaving the workforce altogether. And while stimulus talks between Democratic and Republican leaders have continued, so far no deal as GOP senators focus instead on getting their extremist candidate for the Supreme Court confirmed.
For those out of work, the situation is worsening. A total of 39 weeks of unemployment insurance is available in most states—26 weeks plus 13 weeks of federal extension. But for Americans who lost their jobs in March and haven’t been called back to their old jobs or found new work, there are only eight weeks of benefits remaining. The extra $600 a week initially provided to unemployed people earning below a certain income expired in July. Without that addition, weekly jobless insurance benefits nationwide average about 40% of wages.
Almost every indication is we’ll be stuck in this mode until January 20. If Joe Biden is victorious in the presidential race and the Democrats win a majority in the Senate—both of which many polls indicate is a strong possibility—economist Paul Krugman pointed out this week that the new president will need to push more heavy government spending to dig us out of the mess we’re in. In a time of exceedingly low interest rates, he argues, “For now, and for at least the next few years, large-scale deficit spending isn’t just OK, it’s the only responsible thing to do.”
First things first: If Biden is inaugurated in January, he will inherit a nation still devastated by the coronavirus. [...]
What this means is that it will be crucial to provide another round of large-scale fiscal relief, especially aid to the unemployed and to cash-strapped state and local governments. The main purpose of this relief will be humanitarian — helping families pay the rent and keep food on the table, helping cities and towns avoid devastating cuts in essential services. But it will also help avoid a downward economic spiral, by heading off a potential collapse in consumer and local government spending.
The need for big spending will not, however, end with the pandemic. We also need to invest in our future. After years of public underspending, America desperately needs to upgrade its infrastructure. In particular, we should be investing heavily in the transition to an environmentally sustainable economy. And we should also do much more to help children grow up to be healthy, productive adults; America spends shamefully little on aid to families compared with other wealthy countries.
Emphasis on that word “invest.” An environmentally sustainable, environmentally just economy along the lines of the Green New Deal—or whatever it winds up being called—is not merely an option. It’s a necessity if we’re going to get serious about the climate crisis and systemic injustices that for decades have burdened people of color and people of lower incomes with a disproportionate amount of environmental pollution.
Among the other things that need doing if we’re going to “help children grow up to be healthy productive adults” is guaranteeing what all the other advanced industrial nations have—paid parental leave, paid vacations, paid sick days. This is far from radical. For years, the European Union’s 28 nations have guaranteed workers at least four weeks’ paid vacation. Of the 37 nations in the Organization for Economic Cooperation and Development, the United States has the lowest minimum wage as a percentage of the median wage—just 34% of the average wage, compared with 62% in France and 54% in Britain. And only Latvia has a higher percentage than the U.S. of low-wage workers. Most OECD nations provide substantially better unemployment benefits than the United States.
That provides a very short list of circumstances needing improvement or overhaul that could be easily handled without stepping outside a Keynesian-social democratic framework. But that framework itself is anathema to most Republicans, and there are some prominent Democrats hesitant about it, too. Even more opposition is, of course, arrayed against economic democracy and policies like universal health care, universal basic income, worker self-management, affordable quality child care, free higher education at public schools, and vigorous economic intervention that includes public or cooperative ownership of some industries.
If elected, Biden is not going that far, obviously, even if he could depend on a huge Democratic congressional margin like that enjoyed by Franklin Roosevelt throughout his presidency. As he’s made clear, he’s no democratic socialist. The question is how many of the good worker-related programs like this and this and this and this can President Biden and his administrative team persuade the new Congress to pass to avoid some of the pain suffered during the Great Recession and Pandemic Recession? The answer to that will depend in great part on how powerfully and cleverly activists work to cajole and arm-twist representatives and senators into getting with the program.