How can new businesses / startups provide work to or help retrain this workforce over the next 6 months?
A lot of people losing their jobs are people making less than $20/hr, and right now unemployment pays more than working. In fact, in California if you make under $25/hr your unemployment check will be bigger than your regular check. This only goes to July 31, but this sort of distortion is going to completely upend the labor market. If you made between $7.25 and $25 an hour there is little incentive for you to look for a job until July 31.
If you happen to have benefits, you lost them with unemployment. Matched retirement contributions, health insurance, tuition reimbursement, etc.
Do you know how much full insurance premiums are for most plans with COBRA? My brief unemployment experience showed me that just for me it ended up being nearly 700 a month and that’s someone in their late 20’s at the time with not the best healthcare plan I could have gotten but the middle range one with a 1500 deductible. For a family of 4? Easily 2k.
What you’re saying is we shouldn’t pay people to also sort of kinda have enough money to continue health insurance during a pandemic??? For those to don’t have it and do get sick enough to need care there goes a good portion of that extra money and likely even more, especially if it involves hospitalization - without insurance or a job they’ll likely be bankrupt unless that happen to have a lot in savings.
You also have to skip a week with unemployment before taking the benefit, that’s a week lost income. Finally only in the states with the best benefits, eg NY pays 80% of your salary, do you possibly come out ahead. Some states only pay 45-50% cause they don’t fund their versions as much comparatively.
Additionally unemployment is backlogged that means delayed payments and thus people will possibly incur late fees, interest and other penalties and costs associated with that.
Finally even if somehow someone comes out ahead due to being in a state that gives you a high percentage of your over all income, the amount of situations like that is small and if it happens it is likely a marginal increase at best. Considering we are likely not going to have enough jobs to get people back to work in any significant numbers by July anyway, consider any increase after all that a slight additional stimulus check for people who have been impacted by this and happen to also be low wage workers.
Here in California someone making $15/hr was making $600/wk. On unemployment they will now make $877/wk. That’s a 46% increase. It’s huge. We were trying to keep people employed while staying home but people literally started filing for unemployment anyway.
I’m guessing some people might rethink it when they see the costs of cobra and the fact that the sooner they hit the unemployment compensation the sooner they start the clock of limited benefits. If they need it for more than 6 months or whatever the state allows the max to be then they’re going to regret not first going for being furloughed. Unfortunately people also aren’t rational or forward thinking.
The way they did unemployment insurance certainly isn’t perfect in the stimulus bill. But I don’t think it’s all that problematic.
I can tell you right now most $15/hr employees aren’t too worried about health insurance. Most of them have gone their entire life without, so suddenly losing it again isn’t as big a deal as you might think.
You wouldn't need to create tens of millions of jobs directly in infrastructure, just enough that the money would move around and make related business possible.
Maybe this is a really stupid idea, I don't know.
The reason that helicopter money won't lead to hyper-inflation is because the entire rest of the world is just as fucked as we are, so the dollar will remain the safest currency no matter how much the money supply is increased.
He's probably somewhat of an outlier, since most business owners are younger and will have better chances of starting over, but some business won't recover from this.
A UBI in the meantime would be a super cheap way to prevent a lot of issues.
Companies now realise that the more services they can run autopilot the better they will weather future storms
Life is simply better in every way.
There is a way of calculating GDP that uses aggregated payroll income...but it also uses other accounting measures that reflect the notion of "national income", like corporate profits (which are revenue in excess of expenses, which include payrolls) as well as others.
The interesting point is that less than 50% of the US population are on payroll. So summing the average income of 63k/year for everyone on payroll accounts for well less than half of GDP.
The point you wanted to make was- where the F are all the rest of those sweet sweet income money dollars going?
Today’s version: https://en.wikipedia.org/wiki/Green_New_Deal
The federal government acts as employer of last resort.
Not like people will stop drinking, going to activities, spending money and become monks after a couple weeks.
As far as getting old jobs back, many companies will cease to exist unless bailout money magically sustains them, which it likely won't.
Many businesses were weak, operating with high debt and thin margins. The math that allowed them to continue to exist just got destroyed, they aren't coming back. No cash flow, no cash reserves means no ability to service that debt. Taking on additional debt to bridge this crisis would create a new level of future debt service that isn't sustainable with previously good revenues.
Disposable income is going to be gone for many until we get a vaccine rolled out in 18-24 months. Hospitality, travel, foodservicr, events and entertainment industries will be decimated until we reach herd immunity.