The NPR Politics Podcast - Nearly Ten Million Americans Have Filed For Unemployment In The Last Two Weeks

Episode Date: April 2, 2020

More than six million people filed for unemployment last week, on top of the 3.3 million claims the week prior. Analysts project the share of Americans out of work could go as high as 15 percent this year. This episode: congressional correspondent Susan Davis, chief economics correspondent Scott Horsley, and reporter Danielle Kurtzleben.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

Happy birthday to me. I just turned 23. While still stuck in quarantine, I don't find it boring. I built five trails today, three lawns yesterday, and NPR politics made the best company. A deepest thanks to the NPR politics team and NPR team at large, as we can't leave out Scott Horsley in these Victor Hugo reminiscent times. This podcast was recorded at 2.09 p.m. on Thursday, April 2nd. Things may have changed by the time you hear this. So go blow 15 minutes doing some more research after the show. Well, lucky for you, we've got ourselves a little Scott Horsley in the podcast today. And if you sing that time stamp twice, you'll know you've washed your hands properly.

That woman is way more productive than I will ever be during isolation, man. I'm impressed. Hey there, it's the NPR Politics Podcast. I'm Susan Davis. I cover Congress. I'm Scott Horsley. I cover the meltdown of the economy. I'm Danielle Kurtzleben, and I, too, cover the meltdown of the economy. And the meltdown of the economy is where we start today with some pretty dismal economic news. Nearly 10 million Americans have filed for unemployment in just the last two weeks. New reports out today show 6.6 million Americans filed for unemployment last week, double the record that was set the week before. Scott, Danielle, put this into some context for

us. Well, not only is it double the week before, it's about 10 times what we saw during the worst week of the Great Recession. It's remarkable in both the scope of the job cuts, but also the speed at which they've happened. I mean, we've just slammed on the brakes in this economy deliberately in an effort to control the coronavirus. One economist I talked to likened it to what happened along the Gulf Coast when Hurricane Katrina blew through. But this is a medical hurricane that is blanketing the whole country. Right. And I mean, one additional thing to add here, of course, as was the case with last week's numbers, if there were folks who couldn't get through to their state unemployment claims systems this week or last week, then they would

not be counted here. So there could still be, will still be more in the future, of course. Not only that, but as I understand it, people who the new Economic Relief Act passed by Congress newly made eligible for unemployment insurance, those people were not included either because states don't necessarily have systems up to count all of them and to include all of them. So we can expect a lot more coming through as this goes on. Scott, we talk so much about flattening the curve when we think about the virus, but I'm thinking about this now in terms of unemployment numbers. Sort of, do we get a sense of where we are on this curve upwards of unemployment? Is this the beginning? Is this peaking? How much further could it go? Well, it's possible that 6.6 million applications last week was the peak we'll see in any given week, although maybe not. But it's not the end of the story.

We expect to see cumulative gains in unemployment. One forecast I've seen says we may lose 20 million jobs before this pandemic is brought under control. So, you know, another 10 on top of the 10 that we've lost in just the last couple of weeks. The unemployment rate is going to be higher than anything we've seen in the post-war period. It topped out at 10% during the Great Recession. It's maybe there already and likely to go higher. Do we have a sense of which regions or states are the hardest hit, or is it sort of equal across the country? You know, there's some variation. Nevada, which is so dependent

on tourism and casinos, which has pretty much gone to zero, is feeling the pain. Other states that are tourist dependent, like Hawaii and Florida, are getting hit harder than others. But this is really across the board. If you look at the anticipated jobless claims state by state, they're elevated everywhere. Danielle, does it apply to all workers? Are there certain industries or certain types of workers that are taking the brunt of this more than others? Yeah, of course. You know, listen, I've been talking to a lot of small businesses this week, like restaurants, for example. A lot of these businesses only have two weeks, maybe three weeks of cash flow on hand to keep running or to sort of go into hibernation

mode. So those places have laid off all their workers. I mean, restaurants have either shut down or they've, as a lot of people of course know, or they've gone into sort of takeout mode, which doesn't require as many people. So tourism, hospitality, food service, all of those, retail definitely have taken a huge hit. Any job where there's a lot of face-to-face interaction, other than the absolutely necessary jobs like health care, those are the ones that we're seeing the fallout. Absolutely.

Did the people you're talking to give you any sense of whether these are all jobs that can come back? In other words, does this risk having some jobs eliminated forever? I think a lot, especially about restaurants, where hearing anecdotally that some people think it's such a financial hit, they may never be able to open back up their businesses. And I don't know if you're getting a sense of whether, you know, if the economy gets up and running again in a month or two, are most of these people going to get their jobs back? Well, so the businesses that I've been talking to, the business owners have said, listen, we want to hire them all back. Some have said, listen, you're temporarily furloughed.

We'll bring you back as soon as we can. Some have let them go and said, you know, we hope we can take you back once this is over, whenever that is. The problem is, yeah, they don't know. There's so much uncertainty. None of us knows how long this is going to go on. So, I mean, I think a lot of them have that hope that they can bring them back because also, by the way, there's this new small business loan slash in effect grant program that Congress has will be putting into effect. It'll go into effect on Friday of this week, tomorrow, as we're recording this. And that incentivizes you to hire your workers back. That's how you get your loans forgiven. Now, that could help, if only in a modest way,

sort of staunch the bleeding here. But so many of these small businesses are just already on thin cushions, and this is eating that away very quickly. So they would need that money very quickly to stay up. I'm trying to find some sort of hopeful or optimistic things for people, especially those who have lost their jobs that might be listening to this. And I wonder, Scott, if the sense that, you know, this wasn't an economic crisis, it was a public health crisis that hurt the economy. And before this, the economy was actually doing pretty strong. So if we can get through the public health part of the crisis, it seems important to remember that sort of the fundamentals of our economy was strong

prior to this, right? Absolutely. And that's why the sort of best case scenario is that we have a really deep, but fairly short-lived recession here, and that we see a pretty rapid and pretty robust recovery on the other side. That is the hopeful scenario, and let's keep our fingers crossed. The challenge is the longer it takes to get through the public health crisis, the longer the virus, the threat of the virus lingers, then the more dislocation you have, the more financial stress you have, the more you have workers who drift away from their former employers,

the more you have those employers who just close up shop and decide to do something different. And that makes the prospect for a really speedy recovery harder. You know, if you can all just kind of hang in there and stay together and come out the other side, and then one day you'll turn the lights back on and open the door and everybody goes back to work where they were, that's a smoother situation. It's not smooth, but that's the easy situation. If everyone sort of scatters and disbands because it goes on for many, many months, then it's a lot harder to have a quick recovery on the other side. All right, let's take a quick break. And when we get back, we'll talk more about

what the government is trying to do to prop up the economy and workers. Right now, every household in the country is being asked to fill out the U.S. census. It's the form that helps us determine how voting districts are redrawn, where to build public schools and hospitals, how to spend federal money. So why are some people afraid to fill it out? We're getting into all that this week on NPR's Code Switch podcast. And we're back. And as we have talked about extensively on the podcast,

Congress and Washington and the administration are doing everything they can right now to prop up the economy. That includes a more than $2 trillion rescue package that passed last week that's just starting to be implemented and getting that money into the economy. So let's just remind people what's in there

that is specifically geared towards helping workers. Right. So first of all, there are those relief checks that we have heard so much about that I know our listeners are interested in. For people earning under $75,000, it's $1,200 a person, $2,400 for joint filers, and it scales down for higher income people and scales off for much higher income people. Aside from that, there is an expanded unemployment system. It is higher benefits for more people for a longer time, is the short way of putting it. More people can file for unemployment benefits, and for a few months, they will be able to get $600 extra on

their unemployment checks. That's a decent amount of they will be able to get $600 extra on their unemployment checks. That's a decent amount of money extra. It is. Yeah. The way that it was designed was for the typical unemployment check plus $600 to equal roughly what the average worker would take home in a week. So for some workers, it will be more. For some workers, it will be less. And Scott, there's a huge program about to be implemented through the Treasury Department and banks to help out small businesses. That's right. This is the paycheck protection loans. The idea here is to encourage small businesses to just hang on during this sort of government mandated shutdown and preferably keep their employees on the payroll so that they also have a lifeline and can come back to work when we get to the other side.

Those loans are going to start being available as early as tomorrow. And then there's a whole other pool of money that the Treasury has put up to leverage the Federal Reserve to make loans to bigger businesses. So there's all told trillions of dollars in new financing that's going to go out there to try to keep both big and small businesses in business, even if they're not currently operating, even if they're not currently taking in any revenue while their doors are closed to get rid of the coronavirus. One thing I keep thinking about, and we will know the answer to this question pretty soon in a matter of weeks, is how well the government can implement this phase three legislation. Our colleague Kelsey Snell and I have been hearing a lot of concern from Capitol Hill

about whether the IRS and whether banks can handle the sheer influx of demand on their systems to be able to get people their checks in time, to be able to process these loans in time. And if the implementation does not go as well as people need or anticipate, could it create a bigger economic problem than the one we have right now? I don't think it'll make a bigger economic problem, but it'll mean that what's supposed to be relief won't move as smoothly as the government would like it to. I'm going to go out on a limb and make a prediction that this will not be implemented perfectly. This is an enormous amount of money that the

government is trying to move out into the economy in record time. It's going to tax every system there is out there. Now, they have, in many cases, tried to structure the payouts in a way to make it simpler, to make it simpler for the banks to administer the loans, to make it simpler for the IRS or the Social Security Administration to deliver those direct payments to people. They've put a billion dollars in there to help staff up unemployment offices to deal with the anticipated crush of new claims. But it's going to be sticky. I mean, this is a huge undertaking, and we all know that nothing like this happens perfectly. The best we can hope for is that it happens at least

workably so that the goal of cushioning the economic blow is achieved. Look, Congress pushed this through knowing that there was a big emergency and they got this deal passed amazingly quickly. Well, what that means is there are so many nuts and bolts in terms of implementation. And one thing we've been seeing the last week or two is, yeah, they passed it. We're still figuring out exactly how this bill works. I know Scott and I have been sitting and looking for guidance from agencies on, okay, what about this thing? What about that particular? How will this work? And that is going to be coming for weeks, and that is going to determine people's financial situations for a while. There's already estimates, too, that the small business loan program won't be enough, that they might need to go as much as $1 trillion just to help out small businesses. And Treasury Secretary Mnuchin and House Speaker Nancy Pelosi have both kind of said, if businesses need more money, we're going to give it to them.

So I think there's already growing clear signals that Congress is going to have to pass additional rescue measures, and maybe sooner than a lot of them would like. Yeah. All right. That's it for today. But if you're looking for something to do until the next podcast in your feed tomorrow, think about sending us a timestamp.

We need some more of them for the top of the show. I would say a personal plea here for some of your funniest and most optimistic timestamps because we could all use a good laugh right now. If you're trying out new recipes, if you've taken up a new hobby, if you've completed some big project, let us know about it. Just record yourself on your smartphone and send the file to nprpolitics at npr.org. I'm Susan Davis. I cover Congress.

I'm Danielle Kurtzleben. I cover the economy. And I'm Scott Horslake. I also cover the economy. And thank you for listening to the NPR Politics Podcast.