The NPR Politics Podcast - 17 Million Americans Have Filed For Unemployment In The Last 3 Weeks

Episode Date: April 9, 2020

The number of people seeking unemployment benefits shot up again last week, as 6.6 million more people filed initial claims, and analysts expect the numbers to keep rising. Also, the Federal Reserve announced several new lending programs Thursday, designed to pump an additional $2.3 trillion into a U.S. economy that has been severely battered by the coronavirus pandemic. Today's episode: White House correspondent Tamara Keith, chief economics correspondent Scott Horsley, and political reporter Danielle Kurtzleben.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Hi, this is Rob and Nancy Raymond from Chessing, Michigan, USA. We are currently hunkered down in Pure, Michigan, at our 101-year-old family-owned clothing store at Raymond & Sons. While we look forward to seeing customers again, we have been humbled by the outrage given by our neighbors, customers, and friends, all who have told us that our store is part of their story. This podcast was recorded at 2.07 p.m. on Thursday, April 9th. Things may have changed since you've listened to this, but our love for you has not. Okay, enjoy the podcast,

and don't forget to shop small and dream big. Aw, they actually told me that their family business started around the time of the Spanish flu pandemic, and it survived. And they hope the same will happen this time. Yes. Well, good luck to them. I hope they're doing okay. Hey there, it's the NPR Politics Podcast. I'm Tamara Keith. I cover the White House. I'm Scott Horsley. I cover the economy. I'm Danielle Kurtzleben. I also cover the economy. Another 6.6 million Americans filed new unemployment claims last week. We got the number today. That means that over the last three weeks, nearly 17 million people have filed new jobless claims. That is stunning. One calculation I've seen thrown around a bit today is that 10% of

the U.S. labor force, that is people working or looking for work, 10% has filed for unemployment roughly in the last few weeks. That is ridiculously high, as you can tell I'm having trouble finding a word for it. Yeah, we've gone from having a 50-year low unemployment rate of 3.5% in February to now something like 13.5%, which is higher than anything we've seen since the Great Depression. For some perspective for our listeners out there that, you know, the last downturn during and after the Great Recession, unemployment reached a high of 10 percent. So this one, for it to be around 13 percent, I saw one estimate today that that it could reach a high of 16 percent. For it to get potentially up to 16 percent is absolutely stunning and means that much more pain than the last really awful recession that we had. And it happened like that, just like, boom. Do you know

what comes next? Like, is this it? Is the economy done shedding jobs? Is the hemorrhage over? Or are we going to keep having weeks like this? You know, that's a good question. There are some encouraging signs that maybe this giant wave of unemployment claims has kind of worked its way through the system, and we'll see some decline. We actually, the 6.6 million people who applied for unemployment last week was actually a little bit fewer than applied the week before. So maybe we have begun to bend the curve, to coin a phrase, when it comes to the unemployment rate. There has been a decline, for example, in the number of people searching on Google for how to apply for unemployment. That's just one way you might gauge what the interest is. On the other hand, Moody's Analytics has put out a really worrisome forecast that says as many as 45 million U.S. jobs could be

in jeopardy. That's based on just the number of jobs that aren't really essential and that can't easily be done from home. So in a worst case scenario, you could even see, you know, almost triple the number of jobs lost if this pandemic crackdown continues for a really long time. Right. So this number we're talking about is the claims for unemployment. People are applying for unemployment insurance as part of the $2 trillion economic rescue package that Congress passed, President Trump signed. The amount of those unemployment payments is larger. It's an additional $600 a week for the first four months. So are people getting those checks? How's it going?

In a way, the people who staff the unemployment offices around this country have been doing Herculean work to process nearly 17 million unemployment claims in just three weeks. Remember, they were doing a couple hundred thousand per week before all this happened. So it's gone up in orders of magnitude. But not surprisingly, there have been hiccups. I talked this week with David Rude, who's an orchestra trombone player in the Cincinnati area. He's been applying for unemployment benefits in Kentucky. He's part of that new group who are newly eligible for unemployment under the more

broad eligibility rules in that new congressional bill but it hasn't been easy. I literally sat on hold for an hour and a half the first day before giving up sat on hold for three hours the second day before giving up and that was right around the time when my phone actually ran out of minutes. And we've heard a lot of stories like that from people around the country just the the sheer volume of people who are applying for unemployment has really taxed these state systems. Some states, like Colorado, have gone to telling people, if your last name ends A through M, you should apply Monday, Wednesday, and Friday. If your name ends N through Z, you should apply Tuesday, Thursday, and Saturday, just to try to spread the load out a little bit.

Right. And on top of this, I know we've talked about more broadly about this in the past on the podcast that the state unemployment systems are rickety, to use a technical term. But there have been anecdotes this week about some of these states that just the tech that government runs on is so often is so old. There have been anecdotes about states looking for people who know this decades-old programming language called COBOL. COBOL? I've never even heard of COBOL. Yes, C-O-B-O-L, yeah. To be honest, I am not a techie. I asked a friend of mine who works with computers, and he was like, this is crazy. This should not be happening. Went out with 8-track tapes.

Yes. With those punch cards that computers used to use. Yeah. But I mean, this is quite seriously, it shows that not only are the systems overloaded, part of the reason they might be overloaded is that they're quite old. So there's $250 billion for expanded unemployment in that $2-plus trillion relief package, but the government's trying to push that big wad of cash through a pretty narrow and rusty funnel, and it's going to take some time. I will say I talked to some workers who are really struggling as they wait for those relief payments. One woman who said she didn't pay her rent last week because she plans to pay it as soon as her unemployment check comes through.

But in the meantime, she says groceries come first. David Rude was a little bit more fortunate. He's a musician. His income is always up and down, and so he kind of prepares for that. He had some money in savings. But he's also been spending some time this week, he said, thinking about, you know, how do musicians fit in this economy? We are all watching with great appreciation for the medical professionals who are treating the victims of the coronavirus. We're saying our thanks to the delivery drivers and the grocery store workers and all the essential people who are going about their business.

Rude says, you know, he plays the trombone in an orchestra. He doesn't necessarily feel essential in that way, but he does think there's going to come a time when there'll be demand for his services again. I really think when this is all over, people are going to want to go hear concerts. They're going to really want to have that experience. And I think that's the time when musicians and artists and the performing arts and comedians

and all the people in this industry are really going to be important. That's really going to become our job to come and try to heal the wounds from and heal the trauma from all of this. Yeah. We're going to take a quick break. And when we get back, we'll talk about other actions the federal government is taking to keep people and the economy afloat. We'll be right back. In Cherokee Nation, a feud has been simmering for more than 180 years. I always joke that the Ridges and the Rosses were like the Montagues and the Capulets.

We've been fighting for so long that people don't really know why. But in Cherokee, we know why. That's next week on Code Switch from NPR. And we're back. And we have given a lot of attention to the rescue package passed by Congress, that CARES Act. But the Federal Reserve, America's central bank, has been doing a lot too, and the dollar amounts there are also quite huge. Today, the Fed announced several new programs totaling more than $2 trillion. What are these designed to do? Who are they aimed at? What are

these programs? There's a whole series of programs. Maybe the most significant is what the Fed is calling its Main Street Lending Program, which is $600 billion worth of credit to help extend another lifeline to small and medium-sized businesses. Fed Chairman Jerome Powell acknowledged a lot of those businesses have been forced to close their doors as part of a deliberate effort to slow the spread of the coronavirus pandemic. People have been asked to put their lives and their livelihoods on hold at significant economic and personal cost. As a society, we should do everything we can to provide relief to those who are suffering for the public good. The Fed is also putting up a

half a trillion dollars to help state and local governments cope with this downturn, and it's expanding some of its existing programs to help bigger corporations. Okay, so this is like a civics 101 question, but how does the Fed do this? Are they lending money to banks that then lend money to businesses? And I mean, how does it work? Because the Fed is different than the money that's appropriated by Congress. That's right. And for one thing, there's a lot more of it. The Fed runs the financial printing presses, so they can more or less conjure money out of thin air. They are effectively working with banks to lend money to these Main Street businesses. And that's something the Fed has not done before.

Even in the financial crisis, when the Fed flexed some muscles it had never used before, it wasn't loaning money directly to small and mid-sized businesses. So this is uncharted territory. But again, we're in a very dire situation. Danielle, this leads me to a question for you, because you have been carefully following this PPP, the Paycheck Protection Program, which was part of the big spending bill passed by Congress. The idea was that money would go to these small businesses so that even though they were closed or severely cut back, that they would

be able to keep employees on the payroll and avoid having to lay them off and have them go on unemployment. So is that completely different than what the Fed is doing? Yes. I mean, this is a different program entirely. Yes, it is still operating through banks. It is appropriated by Congress. It is not the Fed's money. But yeah, I mean, listen, this is the Small Business Administration saying, hey, banks, here's a bunch of money. You're going to lend it out on these terms with this interest rate, and you need to get it out there fast. Well, and of course, if our listeners haven't been paying attention to the news, it has not been as fast as many small businesses not just would like, but need.

I mean, small businesses, for some perspective here, according to Moody's Analytics, employ 47 percent of America's workforce. And those small businesses also have smaller financial cushions than larger corporations do. They are, especially early in a crisis, more susceptible to closing, to totally failing, and to really having to make big cuts. So this is very important for them. And the Feds program, the new $600 billion Main Street program, is really designed to complement the Paycheck Protection Program. It's almost twice as big, $600 billion. And like the Paycheck Protection Program, it does encourage businesses to maintain workers on their payroll. All of this is designed to provide a lifeline for businesses and workers who have been deliberately

idled by government fiat, really, as we all hunker down and try to wait out this pandemic. So we have talked about several different economic programs in the last few minutes. And the question I have is, how will we know when it's working? How, I mean, what are you guys looking for? To me, the first thing to look for is once people are actually finally getting their $1,200 checks and all of these gig workers potentially, all these new unemployment entrants are getting their money. Once businesses especially get their money and are potentially putting people back on their payrolls, even if they're not at full force yet, seeing at

least if and how much that stabilizes things after this just plummet in the economy that we've seen. So small and medium term, just what effects we will initially see from the CARES Act and other relief measures? And ultimately, of course, the economic outcome is going to depend on the healthcare outcome. We need to get a handle on the pandemic. We need to bend the curve on new infections. And until that happens, the economy is not going to be able to really restart in a serious way. So all these different economic relief measures we've talked about are really just designed to be kind of a temporary lifeline

to keep workers and businesses afloat until we get to the far side of this pandemic. All right, well, that is it for today. We will be back tomorrow with our weekly roundup. I'm Tamara Keith, I cover the White House. I'm Scott Horsley. I cover the economy. I'm Danielle Kurtzleben. I also cover the economy. And thank you for listening to the NPR Politics Podcast.