Tuesday, October 27, 2020

This post was originally published on CNN - Business News

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Opinion: America needs a stimulus package now. Here are 3 things it should include

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This post was originally published on CNN - Business News

The president has argued that the economy is “doing very well” and leading the world in recovery. But huge swaths of America are still gripped by a deep recession, and there are some troubling signs that things are going to get worse before they get better.
Just last week, the Bureau of Labor Statistics released its monthly jobs report, and the news was not encouraging. While the economy added more than 600,000 jobs in September, that total was way down from the job growth over the summer, when millions of laid-off workers returned to work. And under the surface, the signals were even worse. Hundreds of thousands of people permanently lost their jobs entirely in September, and there were huge disparities between men and women and between White workers and workers of color.
The unemployment rate for White workers in September declined to 7%, but it was 12.1% for Black workers and 10.3% for Hispanic workers, both of which showed little change over the previous month. Meanwhile, 78,000 men dropped out of the workforce, while an alarming 617,000 women dropped out.
These flashing warning lights should be a wake-up call to anyone who wants to see the economy recover quickly and get onto a stable, prosperous path. After all, the economy is all of us. Its strength is based on the contributions of millions of workers, customers and business owners. An economy in which only a few are doing well is not one that is built to last. That’s precisely why Federal Reserve Chairman Jerome Powell urged Congress just a few days ago to do more to support the recovery and bolster the clear weak spots. “Too little support,” he warned, “would lead to a weak recovery, creating unnecessary hardship for households and businesses.”
Americans with criminal records will be left out of the recovery if we don't fix these policies

Americans with criminal records will be left out of the recovery if we don't fix these policies

If we want to follow his advice, we need to embrace massive public spending and investments. Every dollar of public spending could generate more than a dollar’s worth of additional economic activity, and a new stimulus deal from the federal government is the only way we can invest at the scale we need. There is a bigger risk, as Powell noted, in doing too little than in doing too much.
But a federal stimulus package should both “go big,” as Trump tweeted Friday afternoon — contradicting his earlier tweet — and should target investments to ensure that the recovery is reaching everyone. Here’s what that should look like:

More support for state and local governments

States and localities — both “red” and “blue” — are facing massive budget shortfalls as a result of the economic contraction. The predictable result is that public employee layoffs are increasing, with 180,000 in September alone. That’s bad news for each of those workers, of course, but also for their communities. Direct aid will keep people working and spending in local businesses.

Boost unemployment benefits

Over the summer, people who lost their jobs had the assurance of knowing they’d still have some form of income. That was thanks to the $600 per week addition to normal unemployment benefits. Unfortunately, that boost expired at the end of July. Congress should reinstate it, and phase it down slowly, and only if economic conditions improve significantly.

Assistance for basics like food, housing and child care

We also need to invest in food and housing assistance to keep those on the brink from completely falling into the abyss. No one benefits when families lose their homes or go hungry.
And yet, 22 million people are suffering from food scarcity while nearly a third of adults are at risk of eviction or foreclosure. We should increase Supplemental Nutrition Assistance Program, or SNAP, benefits, extend eviction moratoriums and deliver more direct emergency rental assistance.
And on top of those basics, we should consider a huge investment in child care infrastructure. About 24 million people are at risk of being unable to work due to a lack of child care, which is having a disproportionate impact on women. We should think of child care like we think of roads — a public good that is necessary for the smooth operation of our entire economy. Investing hundreds of billions of dollars now will not only provide an immediate boost — it will lay the foundation for an ongoing, inclusive recovery.
We need to measure success not by looking only at the average or the aggregate. In a fractured and unequal economy like ours, the stock market won’t tell us how everyday people are doing. The average unemployment rate doesn’t mean much to communities of color. We should dive deeper into the data and focus our attention on the racial, gender and income disparities that are being exacerbated by this crisis. If those gaps are persistent — or even worse, widening — we know our work is not done and we need to keep our foot on the gas. If President Trump was paying attention to those things, he wouldn’t have hit the brakes.

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