- Paul Constant is a writer at Civic Ventures, a cofounder of the Seattle Review of Books, and a frequent cohost of the "Pitchfork Economics" podcast with Nick Hanauer and David Goldstein.
- On the latest episode of "Pitchfork Economics," Hanauer and Goldstein talk with the Economic Policy Institute's senior economist, Heidi Shierholz, about how the coronavirus is upending the job market in the United States.
- Shierholz says she was shocked by the data recently released showing that nearly 10 million Americans had filed for unemployment in the first two weeks of the COVID-19 shutdown - the highest she's ever seen.
- Visit Business Insider's homepage for more stories.
In her role as senior economist and director of policy at the Economic Policy Institute (EPI), Heidi Shierholz spends her days immersed in data. She's continually referencing charts and models of employment levels, productivity, and wage stagnation. Her job is to absorb the relevant data from those dry reports and synthesize them into economic stories that speak to the average American, in an effort to reduce inequality and improve the lives of workers. She's very good at her job.
But Shierholz could never have imagined the data from the economic downturn accompanying the coronavirus pandemic, and that data is affecting her in a visceral way. On this week's episode of "Pitchfork Economics," she confesses to hosts Nick Hanauer and David Goldstein, "Yesterday morning was the first time in my career that I saw a data release that just made me start shaking."
The data in question was the report that showed 10 million Americans had filed for unemployment in just the first two weeks of the coronavirus shutdown. Shierholz, who started at EPI one year before the Great Recession of 2008, said these new numbers eclipse anything she's ever seen.
"We are really on a whole different scale," she said.
In this episode, Hanauer and Goldstein ask Shierholz for her assessment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law on March 27. Though in quarantine time it feels like the CARES Act passed a year ago, the law is being enacted at the federal equivalent of light speed, with some of the earliest $1,200 stimulus checks arriving in bank accounts via direct deposit this week. But will it be enough to fend off the economic damage that inspired such a shocking response from Shierholz?
"One of the best things about the CARES Act is how big it was," Shierholz begins. "That really, really matters because we are facing something like we've never seen before." The fact that Congress didn't even entertain serious dissent about the size of the CARES Act signifies that lawmakers understand the scale of the disaster that we are facing down. She's impressed, too, with "the fact that Congress moved quickly."
Perhaps the most impactful policy in the CARES Act, Shierholz said, has to do with unemployment insurance, which boosted the current program by a quarter of a trillion dollars and enlarged everyone's payments by $600 a week. "That will really matter to families who are suffering as a result of this downturn," she said.
"Maybe even more important, or at least as important" as shoring up unemployment insurance, she said, is the pandemic unemployment assistance expansion, which "will give benefits to hundreds of people who fall through the enormous gaps in our standard unemployment insurance system." Without this expansion, self-employed people, workers with short work histories, and people who have to stay home to tend to their children can claim unemployment benefits. "They wouldn't normally get this," she said.
Though she categorizes the CARES Act's unemployment insurance as a huge win, Shierholz said there's a loophole in the policy large enough to cause a series of outbreaks around the country: "Undocumented immigrants do not have access to any of the unemployment insurance benefits," she explains.
Even if you're of the monstrous opinion that undocumented immigrants don't deserve healthcare, Shierholz said, "You should still care about the public health impact, and not covering undocumented immigrants is a really dumb thing to do from a public health perspective." If immigrants don't have any way to financially provide for their families, they're much more likely to go to work while sick, thereby endangering their coworkers, fellow commuters, and the general public.
Shierholz also thinks the half-trillion dollar corporate bailout part of the CARES Act is too big and too permissive. "There should have been really tight, hard-and-fast provisions [in which] the industry bailouts require that you're keeping your people on payroll; that you're paying them, not just laying them off." Those protections were already weak in the existing law, she said, and the Trump administration has watered them down even further while hiding the distribution of the cash behind a wall of secrecy.
Hanauer suggests that corporate bailouts should have had one major string attached. If a corporation takes the bailout money, he said, it should be under the condition that "the public owns a piece of your company - and that it's a preference above the existing shareholders." He said this would be a straightforward option for corporations in trouble: "If you really need the money, then you'll take the money. And if you don't really need the money, then you'll figure out another way, and we won't have to pay for it."
We still don't know the extent of the damage that the coronavirus shutdown will cause. There are plenty more shocking jobs reports to be released and historic losses to be logged before the work of restoring the economy can truly begin. Shierholz warns that ultimately, the CARES Act "is not going to be big enough," and that Congress will have to pass a lot more money into the hands of everyday Americans before this is over.
To those who worry about the "trillions-with-a-t" in dollars that are being thrown around in these stimulus bills, Shierholz has a final word of advice: Don't worry about government debt.
"We still can do everything we need to do to fight this recession," she said. "Interest rates are very low right now. Inflation is nowhere. We actually can spend as much money as we need to to get us through this." Now that we've begun the bailout with the CARES Act, we have to perfect the mechanisms to make sure that as many Americans are helped as much as possible.
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