6.6 million more unemployed
In my it's Thursday April second twenty twenty and this month is already looking like it's going to be tougher than March. I'm Sean Rotherham. And this is your corona virus update from today explained. Today we got news at six point. Six million Americans filed for unemployment last week that brings the total number. To ten million Americans will have lost their jobs in just the last two weeks much more detail on that in today's episode. The loss of jobs in America also means the loss of health insurance according to an analysis of state and federal data from the Economic Policy Institute. Roughly three point five million Americans likely lost their health insurance in the past two weeks. And that's of course scary because not only are we in the middle of a global pandemic but the United States has the most cases of covert nineteen in the world. Something like two hundred and fifty thousand. We have doubled the number of confirmed cases in Italy in better news. Florida is finally taking the series. Lead the governor there ordered residents to stay at home on Wednesday shortly after the number of confirmed covert nineteen cases. There jumped by more than a thousand in a single twenty four hour period. Florida now has over. Eight thousand confirmed cases. Nearly forty of these United States have now issued. Stay at home. Notices Texas is the biggest hold out there about four thousand confirmed Cova nineteen cases there meanwhile in New York where the is still just the worst the state one out of ventilators in six days according to the New York Times the state has close to one hundred thousand confirmed cases thirteen thousand or so have been hospitalized and over three thousand are in intensive care to governor. There says that buying more ventilators has been tough with so much competition around the country and the world without them. Doctors will be left making some very tough decisions from tough decisions. To a good one. The Democratic National Convention has been postponed. It was going to be July in the walking now maybe August remember the Jaw Bernie show. I don't you are emailing us. Corona virus questions today explain at. Vox Dot Com. Trust me that we see you even. If we don't get to reply we see your tweets today explained at Romney's firm we hear your voicemails at two two six eight eight five nine four. Thank you for keeping in touch even from Far Away. This episode is brought to you by. Us Cellular. There's never been a better time to switch to US cellular because now when you do you'll get fifty percents off. Select New smartphones like the Samsung Galaxy S. ten or the Google Pixel for a great choice on a great phone. Now that's fair. Us Cellular Choose. Fair terms apply Matthew Yglesias I get a lot of push notifications about this crisis that we're in and they seldom scare me but today I got a few that made me feel fear for this country. We got some shocking numbers. What were they so initial unemployment claims for the week that ended on March twenty eighth came out and it was off the charts insane. Six point six million new people filed for unemployment benefits. That was double what we saw in the previous week and that previous week was itself record these newest numbers. They are ten times. The biggest figure that we've seen outside of the context of March twenty twenty situation. That looked incredibly bad a week ago is getting worse at a really frightening pace so these are historic numbers just one week after we got historic numbers and this historic number is exponentially bigger than that last. One Yeah I mean we've had if you take these at face value ten million job losses over two weeks in March that's equivalent to the first six months of the great recession Just packed into a single two week period. We have had high unemployment in the past but we have never had this kind of incredibly rapid increase. And of course you see it. I mean if you walk around in in. Dc for approved recreational activities. You see like tons of stores are closed which you know we know it's what people have been putting out there but it means that people are losing their jobs that losing them really really really fast and we've never seen anything remotely like this in past recessions. Now you pay attention to numbers like these. Most people are just trying to figure out how to live their lives in this moment. Did people expect this huge jump in the unemployment numbers just from the historic numbers? We got last week. You know people expected a big number as they tried to use some inferences based on Google searches and state level data and what. I was ready for last night I was. I was getting ready to cover this story Thursday morning and I was prepared for. Maybe five million initial claims would have been crazy. That would have been an all time record. I was expecting the worst figures ever and we got something worse than what I was expecting. And the exact same thing happened the previous week we had been looking at an estimate from Goldman Sachs that said there might be two and a quarter million initial claims. That's really bad. That would be much worse than anything that happened before. Instead we got over three million so people are expecting extremely rapid deterioration in the economy and it keeps deteriorating faster than we expect is part of the issue here that the counts. That we're getting aren't the full picture is that what's going on. So it's GonNa get worse every week as as the picture becomes clearer. I mean that's an alarming possibility. Here reports you hear anecdotes are that phone lines. State unemployment offices have been jammed. Websites have crashed a so it is very possible that there are hundreds of thousands of people who've been trying to file claims but haven't succeeded in doing so yet and that we're going to see those numbers come online in the next week or two. The other thing to keep in mind is that you know March. Twenty eighth was not that long ago but in corona virus crisis terms like every day is like a lifetime and a lot of large southern states. Florida Georgia in particular only adopted new shutdown measures after that window closed. So there's plenty of more places for this. Economic Tidal wave hit once we get Next week's data and then the thing you really have to worry about is secondary and tertiary consequences. Because we assume that we're looking right now at people who've lost their jobs because their businesses shut down specifically because of the virus but then when people lose their jobs they have less money when people hear these terrifying headlines about job losses they spend less money so lots of companies that are still operating right. You can go online today and you can buy all kinds of durable goods right like you could order a chair. You computer you could get a suit made by Whatever custom fabricators like? There's a lot of stuff for sale that has not been impacted by the virus but if millions of people lose their jobs. They're not GONNA buy furniture. They'RE NOT GONNA buy Computers. And we're GONNA SEE MORE COMPANIES. Start to get hurt and sort of a recession that builds on itself totally separately from the public health crisis. We're looking at so last week's numbers were three million and people were shocked. This week's numbers are six million and we are even more shocked. Should we be bracing for twelve million next week? I mean and and how long does this continue? I don't think we will see that kind of growth pattern. Because of the virus we've gotten used to thinking an exponential terms the labor market normally. Doesn't work like that. But we could see easily another number in the millions of which we've never had before March fried so even if this slows even if it's slow substantially we're still good me looking at a velocity that we have no with and we're still going to have the question of our people even successfully getting through in the systems It's a crazy to me that Congress has gone out of town until April twentieth. You think about like. Where are we going to be six or seven weeks from now? Like what's GonNa be left and it's it's a mind boggling. I mean you think okay like we will find a bottom somewhere but the economy doesn't necessarily work like that the more people who lose their jobs the more at risk everybody else is. We all know restaurants in our communities or people who work in food service WHO'VE LOST THEIR JOBS. We also know other people who are hanging on trying to do curbside takeout trying to do delivery and you know good for them. God bless but if so many people lose their jobs that they can't afford take out meals splurge like that we're gonNA see more shutdowns even in that industry at we're seeing the advertising market in the industry we work in looking pretty scary unless we can do something to actually put a floor under the economy. It can keep falling and falling and falling for a really long time. My name is Ben Covari. I was an IT project manager for an Office Space Company in New York City and I was laid off along with about forty percent of our stuff at the end of last week. I logged onto the unemployment website to try and file immediately front employment but I found out that the date that you have to file on employment in New York is based upon the first letter of your last name. I assume that was because they are inundated with calls because of the current crisis. Once I completed the application I had to call in to complete and confirm all of my info so I got the phone number from the website and I called in one in about ten calls that I placed to the unemployment office actually connected and got me to the menu the other ninety percent of the dials that I placed resulted in either immediate call failure or an error message from verizon telling me my call cannot be completed so I probably called about several times over the course of a couple of days. When you did get through to a menu you had to enter your social security number and a pin number that you created online over once. You've completed the social security number and pin. You got an automatic recording that said we are experiencing high call volume. Please call back this week and then it just disconnected so the only thing to do was to dial and of course with only one in ten calls even getting through to the menu is timely process to try and get through so I kept dialing and dialing and I kept filling out my social security number my pin number and just resulting every time in the same we are experiencing high call volume. Please call back this week. Disconnect one time I got lucky I enter my social security number my pin number and instead of getting disconnected on. I got a new message that said. Thank you for calling your estimated. Wait time is forty to forty five minutes and then I was put on. Hold something that had never happened before so I sat on hold and when I reached about forty to forty two minutes on. Hold it disconnected. That was obviously extremely frustrating. And I was ready to throw my phone out the window at that point so I was talking to a friend of mine who is also let go for my company. There's a bunch of US actually. On an alumni slack channel there are people who have called over thousand times and have not been able to get through to human being yet so I was talking to one friend of mine and I told him that I got through to be on hold and then I got disconnected a little bit later in the day. He called me and when I picked up he had gotten through and he then asked the representative if he could conference in his friend. E myself to complete my application and to my surprise she said yes so my friend conference me into his existing call with a representative from the New York. State unemployment office and She was okay with it. She let me go through the process of confirming my information. She gave me a warning that my friend who was still conference in on the phone was going to be able to hear my social security number and personal information. I said I didn't mind and she was able to complete my application and it saves me an immense amount of time. You know Kudos to that individual who was working and understood the trouble that a lot of people are going through right now. It was a pretty terrible process trying to get through. You have to understand the strain that the system is under with millions of people in the same boat that I am in unfortunately so I I try to temper my temper for lack of a better term but It's extremely frustrating. You know I've seen screen shots again. In that alumni slack channel of people posting pictures of their recent call history. And it's the unemployment office filling up the entire screen with hundreds and thousands of calls so. I am extremely fortunate that I didn't quite make it to four digits. I was only in the triple digits number of calls but I can't even imagine what it's been like for a lot of other people who have been stuck at home under a quarantine having nothing to do but hoping to get lucky and reach a person at the unemployment office. Congress is out of the office right now but Luckily Matthew Yglesias has a plan to get us out of this mess and he'll share it with for free after the break. I'm Sean Ramos Forum and this today explained. This episode is brought to you by. Us Cellular. There's never been a better time to switch to us because now when you do you'll get fifty percent off your choice of select new smartphones. That's amazing phones. Lake the Samsung Galaxy s ten e or the Pixel for a great choice on a great phone. Now that's fair. Us Cellular Choose Fair. Terms apply check. Us Cellular Dot Com for details. Hey It's curious wisher you may know me as the only person who looks cool wearing sunglasses indoors but in my spare time. I host a podcast called Rico decode every week. We talk about power changed the people you need to know around tech and beyond some of my recent guests include Edward Snowden Megan repeal no and the cast of the ellwood which was a huge thrill for me. If any of these sound interesting to you should listen to them. Now on Rico. Decode subscribe to the show for free on apple podcasts or in your favorite podcast APP to be the first to hear new interviews every week. You wrote a piece recently. That said that we as a country need a wartime style mobilization to get out of this crisis last week. Congress passed its big phase three stimulus package two trillion dollars unprecedented in the modern era. Is that the kind of mobilization you're talking about? It's good that they did that but it's not nearly good enough so they hasn't bill. The stock market went up in response. a number of other indicators that the bond market inflation expectations all showed progress as a result of that bill unfortunately congress brain is like they did a big thing the response to it was positive and then they left town for a series of weeks but if you look at all of those indicators that were positive they didn't get us back to where we want to be with stocks with interest rates with inflation expectations. So the real lesson. They should've taken from the success of that. Two trillion package is they oughta try another two trillion and see where we are maybe two trillion more two trillion on top of that. Like when you're working on a problem of large but unknown scope you gotTa keep trying and then you gotta look and you got to reassess. And that's not what they did. So you drew up a vision for Congress. Because they're not doing their jobs right now. What do you think they should be doing? Yeah so I mean. I think there's three buckets of activities that Congress needs to look at one is just putting money into people's hands so they have cached spent even more money yes The second is looking at mobilizing industries that do relevant things. That's the ventilators that we've talked about a lot. It's the ninety five respirators and other personal protective equipment that healthcare professionals need. But it's also stuff that regular people could use things like disposable surgical masks gloves hand sanitizer lysol wipes all kinds of things. Where if you go online or you go to your store you're gonNA see shortages right now. Those things we could be a need to be producing more and the government should be leading that effort. The last thing is supporting state and local governments financially because we are at a big risk of seeing a sort of secondary and tertiary economic collapse as state governments need to start laying people off and cutting services. Okay let's go through the three of them starting with just putting more money in people's hands now Congress just did that and they did it in a historic way. But you're saying that's not enough. They need to do more of it. Yeah I mean twelve hundred dollar. Checks is nice and the unemployment benefits to people who've lost their jobs is very important. But you know people could use more money There are lots of goods and services that remain for sale. Today at you can get food delivered to your house. You can get takeout. You can buy different things at the grocery store. You can order a new computer. You can make a remote appointment with a therapist. You can do a telemedicine consultation with doctor. Who doesn't specialize in Corona virus viewpoint subscribe to extract services right and a lot of the discourse around this has been dominated by experts which is good but people who are in relatively privileged positions in life and they're sort of main personal experience of the economic situation is oh. I might like to go out to eat with my friends. But I can't because the social distancing but you gotta think about typical people who are just cash constrained all the time in their ability to get takeout food in their ability to just buy durable goods for the house and if we have more money in people's hands those industries that are still functioning can function better as opposed to a situation where everybody gets poorer and then nobody can buy things and then industries that aren't impacted by the crisis. Start to collapse. Well let's talk about those empty shelves and the things people really want. I haven't seen toilet paper at the grocery store I go to in weeks. Luckily I have stashed because Terry next door invited us to costco once last September. What could the government do to fix this so right now? We have a lot of government efforts to prevent price gouging right because we're trying to manage shortages. And that's good. I mean you don't want to see shortages managed poorly but you would really like to see is addressing the shortages and that means identifying key commodities. I would say hand sanitizers Surgical style masks gloves disinfecting wipes other things like that and say look. We are going to guarantee purchase at a slightly elevated price. Not like a crazy like seven thousand percent markup but like yeah you can get fifteen percent higher prices than you normally would for hand sanitizer and the government will buy it if you can't sell it to stores and that is what gives companies the incentive to run the factory twenty four hours a day right to actually increase production. Because the problem with doing everything on a price control basis is that ramping up is expensive. We've got a number of stories. I've seen them locally and nationally of distilleries places that make booze saying we're GONNA make hand sanitizer because you use alcohol in in both cocktails and cleaning equipment. But often what they're doing is sort of a a stunt where they're making it and they're giving it away which is great. It's a great charitable endeavor but to really go on a large scale you need to mobilize greed and the profit motive. You need people to be saying yes. I am going to undertake the expense of retooling my distillery to make hand sanitizer to hire some of the people who have recently lost their jobs to work extra shifts so that we can make more of this sanitizer and to do that you do need to offer a premium over regular prices but then it can be okay because the government can pay the premium right. Instead of talking about protecting people from price increases. We should be spending the money to get what it takes if feels like. We'VE BEEN TALKING ABOUT INITIATIVES. The federal government could take us far. But your third point was that we need to bolster state and local governments to help them help people to I imagine. Yeah absolutely because right. Now you're looking at a real crisis. In state and Local Government finances. A lot of state and local governments relied very heavily in retail sales taxes. Most of them put extra sort of taxes on restaurant meals or alcohol that sold which makes a lot of sense for sort of tax theory reasons but it means the revenue is getting hammered at the same time they have additional expenses. Right governments that are trying to do. The right thing are trying to deliver food to kids. Who Normally get school meals? They have police officers working extra shifts and hazardous conditions. They are trying to disinfect their buses and their Metros they're doing stuff like that But really soon they're gonNA hit the wall and they are going to have to start. Furloughing workers are laying people off we saw during the great recession of two thousand eight. Two thousand nine with the federal government did a trillion dollars in stimulus but more than one hundred percent of that was offset by state and local governments doing cutbacks. New York we know is in this incredible emergency right now and earlier. This week they passed a budget. That's GONNA cut Medicaid because they have no choice. Only the federal government operates free of budget constraint and can just sort of hand out huge buckets of cash to state and local governments so they can keep providing essential services so the federal government right now needs to shore up people needs to shore up business needs to shore up state and local governments basically needs to shore up everything. Can we afford to engage in a stimulus at this level? I mean I'm sure. Congress passed the two trillion dollar thing and said like well. We've never done something like that before. Let's go back to our families in practice safe social distancing or whatever. Was that a terrible mistake. I mean I think you have to ask. Can we afford to not do this stuff? Can we afford to not mobilize fully? Can we afford to have healthy able bodied people sitting at home losing income becoming depressed when they could be making things that are useful to fighting this virus and I use the analogy of wartime? Which a lot of people have thrown around sort of loosely. But I think we should take fairly literally at during World War. Two the Federal Reserve and other central banks around the world it coordinated very directly with the Treasury to essentially print money and cover the cost of things to ensure that if we lost a battle it would be because we didn't have enough tanks. We didn't have enough planes that because we didn't have enough money matters. A wartime mobilization is what are the actual resources of your country at we are not out of textile factories? We are not out of distilleries. We're not out of people who are capable of working in those places. It does seem like we are out of ventilators and respirators and we need to do the work to increase our capacity to produce those things but in all of these cases it's the real resources that matter more than money and we need a central bank that is willing to say that the Fed has done a lot of stuff Dramatic kinds of things basically to make sure that anybody who wants a loan can get one at a cheap interest rate and that's fantastic. But they need to say really clearly that it does not matter how much debt the federal government takes on they will provide that infinite backstop until this crisis is past and just to be clear to people. How do we get the money to pay for all of this stuff? How do we get the two trillion to to fund that stimulus short so that the technical way that this happens is right now? Congress spends money and the Treasury Department sells bonds at auction and those bonds carrying interest rate. And then the Fed has said. Recently it will go buy bonds so essentially they create money out of thin air and use it to purchase bonds and those bonds financed the federal government. So that's what they're doing that's correct. That's the appropriate thing to do. What I'm calling for is a clear statement from the Fed. That says it doesn't matter how much congress spends that if they go to four trillion if they go to ten trillion whatever they. WanNa do the Fed will buy up all those bonds right so that there is a guarantee that they will be able to sell them. There will be a market and in an essence would be quote unquote printing money. They don't actually print anything It's just all done computers But you know pure financial constraints should not be what limits us here. Is it fair to say what you're talking about is is sort of printing money against faith in the United States? Yeah I mean again you know you look at something like i. I was taking my son to old civil war battlefield because I was trying to find someplace that will be empty and one thing that happened. There is the confederate government. They printed money to finance their war effort. And it was fine until it became clear that they were gonNA lose at that point. Their money lost all value. If people think that the virus is going to crush the American economy and American society then our money will become worthless but printing too much is not gonna do that as long as we have confidence that we're going to beat this thing and I fully believe that we can. I mean we have the scientific resources we have the production resources What we need is to actually do the work. Just as we have an other moments of great national crisis worst case scenario if we look back two years from now and we say that really bad thing that happened in the fall and winter of two thousand twenty is that prices went up for five percent because we've printed too much. That would be an incredible success story right. We are worried about now is large scale. Deaths and mass unemployment if we can avoid those fates at the cost of a little bit of inflation. That would be an incredible success right now. Though we're looking at an it's it's terrifying you.