Additional 6.6M File for Initial Unemployment Benefits [pdf]
dol.gov
dol.gov
1. This week's 6.6M new jobless claims represents ~4% of the estimated ~160-165M US Workforce.
2. This is incremental to the 3.3M new jobless claims filed week ending 3/21, totaling ~10M total jobless claims in the past 2 weeks.
3. The US unemployment rate was ~3.5% as of EOM February [1], so cumulatively that means we've hit ~10% unemployment as of EOW 3/28 (~10M incremental jobless claims = ~6%). That number is likely low and continuing to increase, as new jobless claims do not account for gig workers and many state unemployment sites have been inundated by these claims resulting in site crashes and people unable to file claims. In addition, layoffs have almost certainly continued between 3/28 and today.
4. The consensus estimate for this week's jobless claims was ~3.76M jobless claims, and the 6.6M actual claims blow the consensus estimate out of the water. That said, some analysts such as Goldman Sachs had estimated ~5.5M joblesss claims. Goldman Sachs estimates that unemployment will peak at ~15%. [2]
[1] https://data.bls.gov/timeseries/LNS14000000
[2] https://www.cnbc.com/2020/03/31/coronavirus-update-goldman-s...
https://tradingeconomics.com/united-states/unemployment-rate
Don’t ask me why they don’t just use the weekly numbers.
The unemployment survey is measuring how many people are currently unemployed.
The former is correlated with the rate of change in the latter, but is not the same thing.
Our concern is a supply chain meltdown when you have millions infected and sick. I would rather be prepared and not need something, then need something and not be prepared.
This is an absurdist prediction - we are looking at maximum 2 million 75+ year olds dying with some much smaller number of people of different ages. This is the group least likely to be involved in the day-to-day functioning of our supply chains.
Honestly, where are people coming up with these doomsday predictions?
And even if the elderly bear most of the risk, countries are shutting down completely for their sake - and that means companies stopping operations, leading to further disruptions. Also this article: US already has 10 million unemployed, and it barely started to consider doing anything about the virus.
I think this is closest to actual doomsday since the peak of Cold War.
> I think this is closest to actual doomsday since the peak of Cold War
I agree, but I think that more speaks to the relative safety and stability of the post-Cold War era than any particularly huge danger from the pandemic. 2 million deaths is terrifying and we should do what we can to prevent it - I don't see any evidence that this is the lead up to general societal collapse or even substantial supply chain disruption for things you need to survive.
In terms of being an existential threat to human life, this virus as we currently understand it (ignoring all the unknowns) isn't a real Doomsday. Historically it's merely a blip on the radar of awful things humanity has went through, endured, and survived leading to where we are now. People survived the bubonic plague and continued on. It was awful and they lacked much of the knowledge and understanding we now have to better curb these threats.
The vast majority of the population is going to be fine, healthy, and moving along. There may be economic restructuring after this (I don't see it as likely though). You're probably going to see a drop in quality/standard of living at large no matter what, but the majority of our infrastructure will still be there and the majority of the people who operate it will still be there. It's not like humans won't be around, infrastructure will be destroyed, our acquired knowledge and skills are lost...
The absolute worst case scenario is that this virus mutates regularly (perhaps with higher mortality rates) and we aren't able to manage it. Each mutation comes with significant risk of death. Although the risk could low for many, multiple exposures to relatively low risk leads to higher more realized unwelcome outcomes. This would absolutely force a complete systematic restructuring of societies, how we interact, how we work, etc. long term.
Based on what we currently know this will be a fairly long decline in productivity that most will be immune to and life will probably continue on mostly as is. It all boils down to questions about who deserves what, who takes the hit on losses, etc. Right now it looks like your average US citizen will see a larger decline in standards of living and our economic system will further consolidate/concentrate wealth and power barring some sort of (hopefully non-violent) social revolution.
If you're worried about a real collapse, then do what you can to prepare, sure - ideally remembering that, by all the accounts of people who've been through such collapses and later told the tale, what really gets you through in the long run isn't liquor, smokes, or bullets, but relationships.
You don't need to soak in the news to do that. Indeed, soaking in the news probably makes it harder. Anxiety can get paralyzing, and there's a lot in the news to be anxious about. But it's also worth remembering that what's going to happen is going to happen whether you obsess over it or not. It can't be hurried, helped, or fought. It can only be dealt with as best you can, and from here it seems like you're not really helping yourself by what you're doing just now. So, maybe consider trying doing something else for a while? You know, just to see if it feels any different.
If this triggers a financial crisis, then working capital can disappear so even if capacity exists liquidity won’t and there won’t be enough purchase power to float inventory.
I worked at the best corporate bankruptcy law firm in the country in 2008. I can tell you there was a real concern that lack of liquidity would result in grocery stores not having food for extended periods from lacking working capital. That can happen fast.
Whether or not you need ammo probably depends on where you live... but I'd stock up on non-perishables and necessities if you can afford it.
Not sure you need vodka at all, but I think that's a matter of personal preference. I'm actually trying to be as healthy and fit as possible to fight the weirdness that is self-isolation and to be ready for the virus when it inevitably comes (if 80% of us really are going to be infected...)
Am also hearing PE funds are forecasting anything between "18 months until we're back to normal" to "it will never be the same"..
I've stocked up a month ago for a minor supply chain disruption. But the more I read the news every day, the more it seems to me that it isn't going to be a minor disruption. I'm starting to worry about survival even if neither myself nor anyone around me actually catches COVID-19.
COVID-19 isn't going to destroy any of our infrastructure, and if we mobilize properly, isn't going to kill nearly as many people. If our [great-]grandparents made it through WWII, there's no reason we can't make it through this.
> COVID-19 isn't going to destroy any of our infrastructure, and if we mobilize properly, isn't going to kill nearly as many people. If our [great-]grandparents made it through WWII, there's no reason we can't make it through this.
In The U.S., WWII was funded by the savings of that generation, which is really amazing considering they had been in the longest, deepest economic depression in the nation's history prior to the start of the war.
After the war ended, cooler heads prevailed and all wartime orders were lifted and capital and labor could reform, as it saw fit, and as such, the year immediately following the war produced the greatest annualized economic gains in the history of the country.
Going into what we are doing right now, Americans don't have any savings plus many private and nearly all public institutions have a lot of debt.
There is no indication that the government will permit such a freely flowing economy even after whatever it is we are doing has ended, so I don't find direct comparisons relevant.
Not immediately, but the U.S. was on a gold standard at the time and funded the war through war bonds (and establishment of income taxes) which were largely purchased domestically.
The gold standard bit is important because the government was not able to simply print money to fund the war.
Yes, there is irresponsible lending that winds up in temporary value being created that we later find out was fake, and yes it's scary when the government is that lender. Maybe ironically, gold now works as a store of value that hedges against government money going bad.
But debt it still a great system that will continue to work well after COVID-19.
> Yes, there is irresponsible lending that winds up in temporary value being created that we later find out was fake, and yes it's scary when the government is that lender. Maybe ironically, gold now works as a store of value that hedges against government money going bad.
> But debt it still a great system that will continue to work well after COVID-19.
There is no argument for or against debt. You are inserting something not there.
It is notable, however, that to create debt there must be a creditor.
the reason the US was ably to basically jump start it's economy after ww2 was mainly because all of its competitors got either got their industries and cities literally leveled, or their nation/people nearly utterly destroyed.
Even the UK, which was a victor of world war 2 had an economy which was basically dead in the water until the late 70's.
The US got incredibly "lucky" during world war 2 in the sense that it didn't fight the conflict on its own continent.
Also, the marshall plan was a smart policy in an economic sense because it allowed the war economy to transistion back into civilian goods thanks to having a massive (subsidized) export market.
> the reason the US was ably to basically jump start it's economy after ww2 was mainly because all of its competitors got either got their industries and cities literally leveled, or their nation/people nearly utterly destroyed.
> Even the UK, which was a victor of world war 2 had an economy which was basically dead in the water until the late 70's.
> The US got incredibly "lucky" during world war 2 in the sense that it didn't fight the conflict on its own continent.
> Also, the marshall plan was a smart policy in an economic sense because it allowed the war economy to transistion back into civilian goods thanks to having a massive (subsidized) export market.
Nations are not competitors. They are trade partners.
The Marshall Plan was passed in 1948.
These are not mutually exclusive. See China v USA right now.
> These are not mutually exclusive. See China v USA right now.
Well, taken out of context of the discussion, you can say lots of things.
Of course nations are competitors. International trade is an unregulated market, every nation competes economically with each other and tries to extract maximally favorable deal for themselves; when negotiations get heated, they get backed up by military strength, and the only reason we don't go to war often is a combination of sanity and MADness.
> Of course nations are competitors. International trade is an unregulated market, every nation competes economically with each other and tries to extract maximally favorable deal for themselves; when negotiations get heated, they get backed up by military strength, and the only reason we don't go to war often is a combination of sanity and MADness.
What does this have to do with post-WWII economic recovery in the U.S.?
If it's relevant, 3 million people in India died due to widespread starvation during World War 2 caused by British colonial and war-time policies. Additionally all their cloth production was used by the British war effort, so many Indians went without clothes during that period. https://en.wikipedia.org/wiki/Bengal_famine_of_1943#Cloth_fa...
I'd have to listen to the episode again, but I think the most outrageous and shameful thing about it is that it wasn't actually necessary. The way Gladwell portrays it, they died mostly due to the personal spite of one person.
[1] http://revisionisthistory.com/episodes/15-the-prime-minister...
My guess is plenty of essential jobs will have heavy overtime while many people are unemployed. Simply because the disruptions are going to cascade through individual factories very quickly. The economic impact is largely going to be a question of how much do we shut down to save lives?
i think about that a lot. I have so much respect for the task force setup to work on this, but man, i'm glad i'm not on it.
1) A huge impact on the economy and fewer people die.
2) A huge impact on the economy and lots of people die.
Nobody has the capability to predict the real outcome of one scenario over the other from an economic perspective.
If the US does everything perfectly, we'll probably lose 200k people to COVID-19. If we "reopen the economy" prematurely, the number could easily be 5x to 10x that figure.
Loss of human life has a very tangible impact on the economy, so folks should not be thinking of this as a binary decision ("do we save lives vs do we save the economy").
Frankly, the US with effective leadership could have less than 1/10th your quoted 200,000 deaths, just look at South Korea. Any time someone says their are two options on a complex issue it’s a straw man argument which is what I objected to.
BS: Donald Trump was specifically asked yesterday how he feels about the poor and especially illegal immigrants who will have zero access to help, both financial and medical.
He litaerally tilted his head and said "what are you gunna do?" knowing what that outcome is going to result in.
I have a middle finger for you for how cold hearted you sound. As though “it’s no big deal”. My wife went through this (previously healthy 34 year old) and it was terrible. The docs just said: “there’s nothing more we can do”
I've done some preparations over a month ago, but these were preparations for a short-term supply chain disruption. Not for what increasingly seems like a global economic meltdown.
Personally, I find this a lot less scary than '08. The main objective of the current exercise is to ensure the healthcare system does not collapse... because if that happens, things could get dicey. (i.e. blind terror would likely cause more damage than the virus itself) Once we get to the point where the medical community feels like 'OK, we've got this under control' things should start looking up since we'll know for sure what the bottom looks like from a health/mortality standpoint. Then people can start sorting out the economic side of the equation. Right now there's fear because no one knows where the bottom is for either situation.
All you need to do is wait for the next delivery to show up (which it will). The problem is, people like you will continue to buy up everything as quickly as possible, so after the first couple hundred customers the shelves will be empty again. Until the next delivery. That is the problem, not supply shortages.
Don't feel bad for people who didn't horde resources at everyone else's expense. Help those people by buying what you need plus only a little extra.
Your post was completely and factually incorrect, then you not only blame me, but blame the people trying to adjust to a supply issue. How do you determine "what you need plus only a little extra" when you can't determine when TP will be in stock? It's been weeks now, and it's perfectly rational to buy more than you need since you can't count on the supply chain.
Keep calm and carry on
Two global wars, the use of nuclear weapons, and a 50 year cold war with the ever present threat of nuclear apocalypse didn't cause society to break down last century, a flu won't cause it to fall apart this century either.
You know that that meme originated from a campaign designed by the British government for motivation in the face of mass bombing anticipated in England before the onset of WWII right? I think saying that "this won't be any worse than being bombed by nazis" is not a particularly motivated slogan.
> a flu won't cause it to fall apart this century either.
If you think this is just a freak thing that is happening, som e flu what will pass, then you don't understand what is happening. What we're seeing is the way this pandemic is exposing vulnerabilities in our global capitalist system.
And finally, plenty of societies of collapse in those time periods. Of course humans and societies continue to exist, but there are more an enough examples of societies that have ceases to exist and the transition is a painful process.
"According to Dr Honigsbaum, the “carry on” advice may well have been responsible for thousands of the 250,000 Britons who ultimately died in the Spanish flu pandemic."
https://www.telegraph.co.uk/health-fitness/body/coronavirus-...
If you're invoking the flu as a parallel for illustrative purposes with an informed audience then it's pedantic to call it out.
2. It's not an informed audience if misinformation is not challenged, it's a misinformed audience.
3. The flu is a bad parallel. The flu, while annually killing lots of people, does not overwhelm hospitals like a novel virus does. At best it makes people think this is like swine flu, while it has quickly shown to be nothing like swine flu.
Flus can be very deadly and the poster obviously did not intend to use the word in a diminutive way. You added that interpretation, knowing it is wrong, and then challenged it.
So yes, the poster was using flu in a diminutive sense. And yes, flu is deadly and a lot worse than a lot of people (who've probably never had flu) realise. But even given that, even recent novel flu strains haven't stressed and shut down the global economy like this pandemic has.
We had several options for how to respond to this, and chose the most invasive, drastic and potentially economically catastrophic one.
In the absence of data around who is sick, who is not, and who is immune, there is no way to slow the spread of the virus during an outbreak except to keep everyone away from everyone else.
This does not minimize the harm a flu can do, it puts it in perspective. Nuclear bombs going off over LA, London, New York, and Beijing probably would not cause society to break down. That does not mean that does not mean that it wouldn't be terrible, deadly, and disruptive.
When planning for how to prepare and deal with this pandemic, people should not be preparing for some Mad-Max scenario where an assault rifle is their most valuable possession.
Also, 50MM for the Spanish flu is the top end of reasonable estimates: https://en.wikipedia.org/wiki/Spanish_flu#Around_the_globe
What is clear is that people are underestimating this crisis, no one wants to think we are in a WWII level moment, and so we don’t activate the appropriate level of response. But it is and will be a world altering period.
Once consistent pattern is that countries seem to feel like you do, it’s just a flu, then doctors see patients gasping for breath and literally drowning as their lungs fill up with fluid, and the true dread sets in. My friend is a doctor in NYC. She said this feels like war, and the nature of death experienced by people is horrific. If people were bleeding from their eyeballs like a movie maybe that would capture people’s attention but on the front lines people are terrified because this is an awful awful way to die.
(UK already into "one large pack of TP per customer" territory, which is an improvement from bare shelves)
The curve will barely flatten, before 'peak infection' is reached. At the current rate, we have only 1 or 2 months to accomplish this, and no progress so far.
Many folks will get sick; the oldest will die at home. For others it will suck, and there will be no help even from neighbors, churches etc (like the last time, they quit functioning entirely)
Some will not notice at all, apparently. They will survive into a world changed by loss, conservatism, suspicion and paranoia.
An initial recession, while paradoxically goods are plentiful due to the reduced demand
The Social Security fund will disappear entirely as a topic of discussion
Civilization won't fall, and public order will only be occasionally disrupted in small localities
I'd recommend establishing a network of close friends who will support one another during this time. It's about the only support we can expect.
The curve is flat (at least the new "X" curve) in both Seattle and the Bay Area. That's definitely progress.
For general views of very smart people on the economy and markets, I recommend Bloomberg Surveillance every morning on the Bloomberg app, radio and on your favorite podcast app
Right now, the sources I have say to expect to be WFH and "socially distanced" until July or August at the earliest. Restaurants will probably start slowly opening back up around then, but conferences or sporting events are going to be cancelled through at least the end of the year. A single sporting event or conference can lead to thousands of new infections, so none of that stuff is coming back for a long time.
Past that, we were told to expect 3 waves of economic pain: one right now when everyone loses their job, another big layoff cycle in 3 months once companies that can WFH start to adjust for structural changes, and a third wave near the end of the year after people start to seriously curtail consumption in response to the first two waves and global demand falls off a cliff.
This information has been getting priced into the market for a few weeks, so none of it is new. But these numbers are just starting to hit the wider media and your average American is starting to panic because we're looking at a decade or more of hurt before this is all over.
Despite our best efforts, this thing is burning through entire populations, and will do so quickly (within a couple of months globally, except some places in asia who escaped the first wave but are now seeing more). Every active person leaving home is going to be exposed in short order, thus infecting their household, and even in lockdowns people need to eat. Almost every country waited too long to lock down, and large countries still haven't effectively done so.
The downside of that is a horrific global death toll (1 million confirmed cases this month, maybe 10 million infected? megadeath next month?). The upside is that we will at some point reach herd immunity and/or develop and manufacture a vaccine and economies will restart.
Looking at Italy I find it hard to believe that almost every household has not been exposed by now - all it takes is one infected during the lockdown and the entire household gets it. Their new cases are declining and their deaths are flat already.
There will be substantial economic damage but I think the recovery may be quite fast as there will be a clear cause which has been addressed (probably by a rushed vaccine currently in trials - there are lots globally). I don't believe a lockdown of more than 2 months is acceptable to most, even with a 1% risk of death, and such lockdowns require the consent of the population to function.
This virus is not transmitted via magic. Even basic precautions lower the transmission rate considerable. Most places are now taking precautions that are far beyond basic.
I agree that could be worded better (I'll leave it up since you've replied), but I meant it's hard to avoid if you're going shopping every few days - people are not good at infection control and many are pretty much asymptomatic for a long period. Lockdowns are controlling the rate of spread, not stopping it, despite best efforts, and will I suspect be released after a few months for that reason - because it has infected > 50% anyway and those people are allowed out after testing.
I'm encouraged by the progress in Italy, but don't see how you can avoid having most of the population catch this in the long term without a vaccine. It appears to be very hard to control even with really draconian quarantines which only have an impact after weeks and cannot realistically hold for more than a a few months, esp in poorer countries. I'm not saying don't quarantine, it's essential to avoid really horrific deaths, just that it may not stop the majority getting it in within a year or so.
If it mutates of course that's another problem but this disease is so virulent and the economic damage of effective countermeasures is so disastrous that I cannot believe the world will not prioritise mass vaccinations when that arrives and eliminate it whatever the cost.
>such lockdowns require the consent of the population to function.
NO, they require they compliance of a population when faced with the military and martial law -- Which was already intimated directly as not being needed "just yet" by Trump.
Massive rumors of troop deployments and getting ready - videos of trains with tons of equipment being moved around the country.
Videos of the suposed "testing centers" setup at various places were the military setup huge tents - and they are completely empty, as well as fema delivering refridgerated trailers to these places...
They are planning on mass death coming very soon.
Media claiming that the hospitals are a "war zone" and guys went to these hospitals and they were empty.
This is going to be the most profund economic event of our lives. Hopefully more like 1893 than 1929.
^ for anyone who doesn't know, 1893 seemed to be the first of many Argentine financial crises, caused by a wheat crop failure, which caused a negative feedback loop as (mostly) European investors pulled out of South Africa and Australia. The effects spilled over into the US and UK financial systems, led to runs on the banks, and caused a severe recession for 2 years.
And meanwhile markets are up!
cf https://www.nytimes.com/2020/04/01/business/france-coronavir... (not about Belgium, but the approach is common to multiple EU countries)
[1] https://www.bloomberg.com/news/articles/2020-03-24/norway-jo...
Philippines 4.5% -> 5.3%
Belarus 0.3% -> 0.2% (???)
per https://tradingeconomics.com/country-list/unemployment-rate
Israel 18.6% 3/24 to 24.4% today - https://en.globes.co.il/en/article-unemployment-in-israel-up... and https://www.jpost.com/Breaking-News/The-number-of-unemployed...
I'm not sure why Israel has their numbers available so quickly.
Pyramid schemes transfer wealth from the bottom to the top while creating no new additional wealth. America is creating tons of additional wealth and how much each gets from that wealth is proportional to one's leverage and one's leverage is generally proportional to how much one is able to contribute to wealth generation (in either talent or useful capital)
Why? Companies sitting on tons of cash is a bad thing. That cash either needs to be invested through hiring, buying equipment, etc...or paid out to the shareholders (who then spend, invest, etc...). Sitting on cash traps capital that could be doing something else to create value.
And before you say companies need to plan better, companies do plan for downturns. But, no company plans for their revenues to go to near zero overnight.
https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite...
Also, the US isn't a single entity. It's an agglomeration of 330 million people interacting with one another and it's various levels of governance at the local, state and federal level.
Natural disasters can destroy wealth by destroying assets. Individuals can squander their wealth through bad investments. A government can steal wealth through taxes. Wealth can be forfeited through civil or criminal proceedings. Wealth can dwindle in real terms due to inflation. So on and so forth.
But to say that the "US destroyed wealth" makes no sense and isn't either a supportable or falsifiable statement.
I would guess NYC is contributing a big chunk, and if things turn around there in a month or two should be okay.
Texas and California don't seem to have been hit as hard as NY-NJ. So was just wondering if the unemployment filings have jumped equally in all 3.
I believe that 50-75% of restaurants will never reopen. 20-35% of small to mid-size hotels, venues, spas will declare bankruptcy within this year. Both employ a lot of people.
So I'm afraid the number is going to much higher, maybe even double.
It's easy to criticize the government without having to bear the responsibility but I wish they did this much earlier, with more force to bring confidence to the people rather than markets.
I spoke with a branch manager at a bank day before they announced the extended timeline for shut down up until end of April. She was cheerful because she believed that this will be over in two weeks. I tried to gently tell her that I believe we are looking at months (two at minimum), not weeks of lockdown and even that might be very optimistic. She didn't take it well.
People are confused and scared. I do wish the govs (local and federal) would be the leaders everyone needs them to be, but unfortunately, that's not yet happening (there are some exceptions, but very few unfortunately).
[0] https://www.atlantamagazine.com/dining-news/chef-hugh-acheso...
Maybe there's some kind of intermediate between forcing everyone to stay home and not having any mitigation measures in place whatsoever? Maybe a midway strategy would be less destructive. Protecting the economy isn't just about protecting the rich. The rich will be fine, they will get huge government bailouts (zero-interest loans). However, as you point out, a large percentage of small businesses will never reopen. If anything, this crisis is hugely benefitting Amazon & co.
Again, it's super easy to criticize when not in charge, but my reaction would have been to shut down any means of travels to and from the country, shut down the country for 45 days completely, slowly restart the economy from crucial business to less and introduce couple of strong measurements to compensate workers for lost income.
When you have no further option for healthcare because the system is broken and overloaded, why would going into work make any sense if it resulted in either an period of illness with structural symptons or even death.
In times of crisis, people want food on the table and a roof over their head, if the cost benefit of doing legal work and following the rule of law turns negative, people might aswell just steal food and stop paying rent, who is there to stop them?
The people who need to be locked-down are those over 60 - not the entire population.
At start of year, situation normal, the economy we had was unsustainable. We were collectively waging war on our environment and winning. Folks mostly had jobs, which was good, but income inequality was nuts and lots of jobs didn't pay a living wage. Housing costs, healthcare and college were out of control.
In short, the world could really use a correction. The pollution reduction from this shutdown has been dramatic and wonderful.
This will hit the economy very hard. The rich will be livid and will push hard to return to business as usual. The rest of us will suffer terribly. Maybe so terribly, and in such numbers, that we have to address it. Maybe we'll come out the other end with something more sustainable for everyone.
(Probably not.)
That’s unfortunately my reading. There are stores boarding their storefronts in LA [0]. Very very premature but gives you a glimpse into the believes of some.
I’m sure at the end we will come out of it in better place that we entered it, but I’m dreading the path we have to take to get there.
[0] https://mobile.twitter.com/tmz/status/1244412908273991680 (I know, I know, it’s TMZ)
Travel/conference focused items (hotels, venues, cruises) are much more affected.
Portland OR is a bit techy and boogie but even then it has still been hit HARD. The places I frequent all have had drastically reduced hours and business. I haven’t heard of any closed for good but more and more and just on a long hiatus or boarded over...
Commercial real estate will be impacted as heavily as any other business.
The speed of recovery will depend on how much liquidity will be available in the market. And I believe it’s going to be quite low.
You see, all of these business depend on discretionary income and after the shock to the people they will sit on any penny or they will not have it themselves.
I believe we will eventually get out of this but my timeline is 3-5 years. If people are unemployed for more than few months their prospects drop rapidly. People with no options produce ruthless competition that pushes salaries down producing wider inequality and limits the discretionary funds needed to spend in those establishments in the first place producing quite a vicious circle.
There will be people who won't be able to spend anything because the depression drained them absolutely, and there will be people who are accumulating income that they can't spend due to the lockdown, and will have the funds to resume all the postponed vacations with vigor as soon as they can - in the aftermath, tourism will be cheap for those who have discretionary funds for tourism, because many won't, and the service industry will be agressively competing for any income they can get while having a cheap workforce.
That's 40 million people who will have no income and likely no health care in the middle of a pandemic.
Not sure how to process this information honestly.
if the government were to help regular people that would be say $1T/40M = $25K - one can survive a month or two on that (and those money would have naturally trickled promptly up thus also supporting the top of the economy - corporations, banks, etc. - instead of being directly accumulated there like in the current trickle down approach). My understanding that is what they ultimately did in Great Depression - by way of public works and rudimentary safety net - though the things had to get really bad before they did it, and one can only wonder how much things have to get bad this time.
US median yearly household income is about $61k
You have to look at the vulnerable industries, and assume percentage of those jobs will be lost, up to the limit of that industry.
...but certainly, the longer everyone stays home, the more industries will be sucked into the void.
Ultimately, we will have no choice but to advise people to go back to their lives, despite the risks.
The government does not have the ability to bail out every single industry in the economy.
I extrapolated them for four weeks.
All we need is four more weeks of what has happened for the last two (and most authorities are saying that the lockdowns will last at least this long), and we're at the peak of the Great Depression, unemployment-wise at least.
Moreover, by assuming constant linear growth, I was being optimistic about the slope of the curve. The second week of jobless claims was worse than the first.
* https://www.metaculus.com/questions/3922/what-will-be-the-us...
* https://www.metaculus.com/questions/3933/what-will-be-the-us...
In some situations, people can actually earn more from unemployment benefits by being laid off due to some hasty oversights in the aid package (Reference: https://www.cnbc.com/2020/03/27/how-unemployed-workers-could... ). This doesn't account for lost benefits or the risk involved in losing a job, but it could disincentivize people returning to work if it means their income will go down.
Of the many people I know who have been “laid off”, all of them have been told they’ll be first in line to be re-hired the moment quarantine ends.
If a business can’t make money, it makes more sense for them to let employees collect unemployment during the downtime than to overextend the business’s balance sheet. During normal times, this is a common tactic for seasonal businesses. I have friends in seasonal tourism industries who received training on applying for unemployment benefits during their annual off-season layoffs each year. They even have an explicit system for tracking seniority in the re-hires.
Of course, the longer this quarantine lasts, the more likely their businesses are to disappear before they can re-open. Unfortunately we won’t know this number for many months. For now, the initial unemployment claims number can't discriminate between jobs that have been temporarily paused and jobs that have been eliminated.
I fear that we will see revolutions in countries where this is not contained, from either a health or economic perspective. An old saying is that you should buy stocks when there is blood in the streets. I hope that doesn't become literal.
M4A is down to about 26% support as of yesterday. https://i.imgur.com/H9bAwV9.png
All registered voters supported M4A with ~55% (see POL19) according to a recent poll. I'm not really sure what to do with a twitter image, but I'd be interested in seeing their numbers.
https://morningconsult.com/2020/04/01/medicare-for-all-coron...
[1] https://morningconsult.com/2020/04/01/medicare-for-all-coron... [2] https://thehill.com/policy/healthcare/403248-poll-seventy-pe...
[1] https://news.gallup.com/poll/186527/americans-government-hea...
And even though Democrat voters support this the most, the majority of Democratic Presidential candidates this year were opposed to single-payer and pushed some attacks on it that were mostly false (arguing that it removes choice). And a lot of polls on it will mention things many Americans view as negative (a single government run system) and not mention ones that they would view as positive (no out of network doctors, never being uninsured, never switching insurance, no medical billing issues, no healthcare bankruptcies, lower healthcare expenditures, etc.).
https://news.gallup.com/poll/245195/americans-rate-healthcar...
It’s a lot easier to reason about on the company balance sheet with the later at the cost of increased complexity and less safety for the employees. But they do love to spin the “triple tax benefits!!!!” (In the case of HSA) to try and convince people this is a great change.
The old Microsoft Premera plan was stupendous as in you never thought about it, (nearly) everything was covered.
I've never met a single person who feels their health insurance is good or useful. R=close to zero if the hypothesis is the super majority like theirs.
On the other hand, ACA put a dent into their ability to do that.
The non-insurance wing of KP is great, aside from some administrative problems - the main one being that they don't allow some specialists to limit how many patients get referred to them, so they can get overloaded. The alternative is presumably not being able to get a specialist at all, but many of the ones I deal with have waitlists 6 weeks long or longer. Specialist turnover is also quite bad, I've had 4 of my specialists quit in the last 5 years.
Have an addiction problem and want treatment? Tough shit. It breaks my heart to think of the number of people who finally got to the point in their lives where they actively sought out help, only to be basically turned away by Kaiser. I would imagine many of those people never got a second chance.
Do you 'like' Walmart, the company? Or do you just want your groceries and don't really care what the store is called?
No one likes their health insurance. They like having health insurance given the horrifying alternative.
No one (except those on the ACA) gets to really "choose" their insurance either. Your employer offers a few plans. Those can change completely based on their whims.
Why would I care if M4A takes away my health insurance? Please, by all means, take it away! I don't care who pays the bills. In the last 10 years, I haven't been able to keep a primary doctor for a stretch longer than 2 years. Every year for the last 5 years, I have to critically look at my own health needs and try to guess as to what plan on the ACA is going to rob me the least. My taxes would have to go up at least $20,000 a year for it to even approach what I'm spending on a plan that I'm terrified that I might actually have to use.
[1] https://morningconsult.com/wp-content/uploads/2020/03/200310... (pdf)
Edit: looking into it further, I think the WI number is more interesting than I thought given the 2016 election result:
https://projects.fivethirtyeight.com/2016-election-forecast/...
[0] https://www.politico.com/story/2019/09/11/sanders-voters-ele...
https://www.latimes.com/opinion/story/2020-03-06/biden-older...
https://fivethirtyeight.com/features/young-democrats-have-re...
https://www.vox.com/policy-and-politics/2019/11/1/20943879/i...
https://www.nytimes.com/2020/03/13/us/politics/joe-biden-you...
https://www.politico.com/news/2020/03/04/black-voters-biden-...
"already have medicare" theory isn't the explanation.
If Biden runs, Trump wins reelection. Not enough voter support for Biden besides older voters and people of color, younger voters will sit out before voting for Biden in a general election. That's not my opinion, that's what the polling data shows.
[1] https://www.politico.com/news/2020/01/23/joe-biden-black-vot... (“In South Carolina we were taught to vote straight party. You see black people [on the ballot], you see Democrat, you vote straight party. You’re not used to seeing 10 damn candidates in the first place,” added Robinson. The menu of choices plays to Biden’s benefit because he’s a known commodity, Robinson said.)
Young people don't vote, so no one cares what they think. Latino's and African American's will vote for Biden since Trump is pretty damn racist and if they don't, they are basically screwed for another generation. Minorities don't have the luxury of waiting for the perfect candidate like White College Kids can.
> Latino's and African American's will vote for Biden since Trump is pretty damn racist
There are still many Latinx [1] and people of color [2] voting for Trump (or desire a candidate besides Trump and Biden), despite his character. Never underestimate a Cult of Personality.
[1] https://www.theatlantic.com/ideas/archive/2020/02/latino-sup... ("President Donald Trump has done almost everything he can to anger Latino voters. And yet, his support among this crucial portion of the electorate remains surprisingly consistent. After the 2016 election, exit polls analyzed by the Pew Research Center showed that 28 percent of Latino voters supported Trump; today, 30 percent support him.")
[2] https://www.politico.com/news/2020/02/24/blackpac-poll-democ... (Poll: Democrats underperforming with black voters | More than one-third of those surveyed expressed a desire for ‘someone else’ to run for president.)
There is wild disagreement about what a better system would be.
Strongly agree that health care coverage is a major concern. We have a long way to go toward an ideal situation.
Sadly, many of the people who are first to be laid off are least likely to have employer-sponsored insurance benefits in the first place (hourly jobs). If they already had ACA-subsidized healthcare plans, nothing really changes for them.
For everyone else, there are some mitigating factors:
COBRA coverage has a grace period following termination. If you opt in to COBRA coverage during this grace period, the coverage is retroactive up to your date of termination. Please check with your insurance, but I believe the minimum grace period is 30 days, although I've personally seen higher numbers listed in my plans.
Many insurers have indicated that they will waive costs for COVID19 testing, and some have even waived copays for COVID19 treatment. I expect we'll see more pressure on this as time goes on.
This is a good time to remind everyone that a job less event triggers a special enrollment period for the ACA. Visit healthcare.gov to evaluate your insurance options. COBRA isn't the only option.
https://web.blockadvisors.com/tax-reform-removes-the-afforda...
just a reminder for the audience though: the Trump admin is currently trying to get the supreme court to rule the entire ACA unconstitutional.
Struggle under the weight of the debt, become impoverished and many may become homeless. All the while being told to just find a more lucrative job, like say, coding.
Unemployment is a safety net that needs to exist but it shouldn't, IMHO, be the first option to jump to. That's irresponsible unless of course you can't cover your employees at the rate unemployment can--then it's reasonable for everyone's sake.
You should look at supporting employees part time if possible, especially those who have many years association with your business that are valued players. Your first order should be to take care of yourself and those around you, not immediately jump to social safety nets and pass the hardship. Let's re-establish long term employee and employer relationships and get rid if this "everyone's constantly disposable" economic mindset.
If I'm laid off, I'll first look at my savings and hit the job market before I consider driving right into unemployment. I dont want to utilize that unless I need to and my other options fail. I expect businesses to do the same and be responsible contributors to society. If not, let's take a bit more of their stimulus money back and chuck it to other businesses and people that don't run away at the sight of a loss and try to persevere through difficult situations.
I think everyone definitely understands academically that the actuarial models underpinning unemployment collapse in that kind of environment.
>I dont want to utilize that unless I need to and my other options fail. I expect businesses to do the same and be responsible contributors to society.
Here's the issue game theoretically speaking. I'm pretty sure most businesses and people are likely not going to settle on your strategy as being optimal. (Even though, as you've pointed out, it is the communally optimal strategy given the system we have.) I'd imagine most people will opt for the immediate unemployment strategy.
Yes, even if quick and easy way out may not be in their best long term interests.
This is a great case of “the world doesn’t revolve around you.”
1. Most states only give you a few weeks to apply.
2. You already “pay” for your unemployment several times over during your career through unemployment insurance. Your employer pays this, but they could have paid you more if they didn’t have to.
3. It’s income. You still pay taxes on it. It’s not free money out of nowhere.
Use the tiny social net that you have instead of waiting too late and out of money and having to rely on family or friends.
2. That's pretty much verifiably false. That's fundamentally trickle down economics which everyone knows simply doesn't work. Employers could take that money and increase your compensation. Historically, that hasn't happened. Any breaks given on those expenses temporarily go to an employee then disappear quickly after because there's nothing the business gains by shifting that to labor expenses. The most recent example to look at is the 2017 'Tax Cuts and Jobs Act' which translated to almost no increase in labor rates aside from initial PR compensation packages that people received, forgot about, and continued on with stagnant compensation rates.
3. I never said it's free money, I pointed out in the first paragraph it's not free money. Employees pay a large portion of unemployment as taxes, as I said. Businesses also contribute to that in taxes but the lionshare comes from labor taxes.
Do you have any data on this assertion?
If you manage to work from 25 to 65 at an average of $70k per year, that’s almost a year worth of unemployment.
1. Are unemployment employment benefits only extended to those who have already themselves paid a certain amount in UI taxes AND that amount is the extent of the benefits available to them?
2. If the answer above is no - do you know what % of end up receiving more money in unemployment benefits than they have 'pre-paid' or will 'reimburse' thus a net cost to the system over the course of their living/working lives?
3. What happens to the unemployment taxes paid by people who choose not/never to file for unemployment benefits, even when unemployed? Do those individuals ever get their money back?
4. This line of questioning leads me to wonder why in the US is UI/UB not just directly linked to each individual?
2. Usually, there's a cap for how long you can be on unemployment. You can't be on it forever. You also have to provide proof that you're looking for a job. Some states require signatures from those companies, some just require a list of companies you've applied to and they do their own random validation.
3. Companies pay the unemployment insurance tax on your behalf, and if you're unemployed and don't file, you don't get to use your benefits.
4. 100% agree
In the sense of insurance, not claiming unemployment benefits is like laying for insurance and not using it when you have a claim. A personal choice for you to make.
In most cases, you also have to prove you are actively looking for work to get benefits.
However, the recent CARES Act does supplement unemployment benefits from federal taxes.
This is easy to defraud, unfortunately, seen it firsthand in many instances and it's at national scale.
Seek and you shall find.
No. Unemployment is a mandatory insurance that all employed people must contribute to based on their income level. It's not a tax. It's an insurance.
> If I'm laid off, I'll first look at my savings and hit the job market before I consider driving right into unemployment.
That's silly, but okay. Would you not tell your home insurance that your house burnt down? I guess you may worry about a higher premium, but you don't need to worry about that with unemployment.
==The Trump administration has decided against reopening Obamacare enrollment to uninsured Americans during the coronavirus pandemic, defying calls from health insurers and Democrats to create a special sign-up window amid the health crisis.==
[1] https://www.politico.com/news/2020/03/31/trump-obamacare-cor...
I'm not saying open-enrollment wouldn't be preferable, or that the administration might not be trying to encourage people to enroll, but the option is still open for many, in theory.
To clarify: ACA enrollment is open for anyone who has been laid off. They don't need to wait until the next enrollment period to get health coverage again.
Making ACA open enrollment for an extended period of time would create a perverse incentive for people to avoid enrolling until they feel like they need it. Counterintuitively, this could decrease ACA enrollment rather than increase it.
"Insurers said they had expected Trump to announce a special enrollment period last Friday based on conversations they had with officials at the Centers for Medicare and Medicaid Services, which runs HealthCare.gov enrollment. It wasn’t immediately clear why the Trump administration decided against the special enrollment period. CMS deferred comment to the White House."
==Making ACA open enrollment for an extended period of time would create a perverse incentive for people to avoid enrolling until they feel like they need it. Counterintuitively, this could decrease ACA enrollment rather than increase it. ==
Giving free money to people could create a perverse incentive for people to avoid working, but we just did that. Giving businesses grants for payroll might incentive them not to maintain cash reserves in the future, but we jut did that. I don't see why this would be any different. It's a national emergency, every potential solution should be on the table.
That is a huge understatement. Especially for anyone that needs family coverage. The rates I paid when self-employed were more money per month than my entire paycheck until I was in my late 20's.
We need Medicare for all, desperately. Health insurance should not be tied to employment.
I even had to skip COBRA during one period because that was out of reach.
https://www.visualcapitalist.com/the-anatomy-of-the-2-trilli...
I do see $100B paid to hospitals.
Even the small business loans have a provision that they are forgiven only if they keep employees on payroll. That is the difference between keeping insurance and losing it for a lot of people.
Maybe the most obvious and direct way to help those affected. If that was the intent.
Giving cash directly to everyone, sick or poor, is a very different thing. "Expanding Medicare" might help a few.
Paying hospital bills would be exponentially more complex of an operation, and there isn't an organization already set up to administer something like that at this scale.
Sure, but I was talking about helping the infected people.
Yeah, it's more complex, but if it was a priority, it could be arranged. It's not like it has to be done quickly. Bills can be settled months later.
My cynical explanation is that Covid infected do not have a lobbyist at the table when these things are decided.
But, how or why would any infection requirement be necessary or a good idea?
1. The economic toll that is happening is not even remotely limited to those who are infected.
2. We aren't testing everyone and we don't have the resources to do so, so how would you accurately allocate the funds to those who are infected?
3. Those 10 million people who lost their jobs over the last two weeks mostly aren't infected (yet) but still have healthcare needs.
4. Much/most of the population is projected to contract the virus at some point anyway.
The economic toll is also important, but people are dying by the thousands.
I assume many infected will come out of this with 6 digit hospital bills.
We do have the resources to test everyone. Banning most tests is a regulatory decision.
If a goal is to stop virus spreading, encouraging testing should be a primary goal. If people have to pay thousands out of pocket to be tested, that won't happen.
> If we don't agree that the infected are the primary victims, that might be our primary disagreement, and there isn't much left to say.
Most people who cannot pay their health insurance today are not people who are infected. We have 40 times as many people unemployed as we do infected.
> The economic toll is also important, but people are dying by the thousands.
Health insurance or healthcare bills aren't a factor in the death rates of this virus. People won't even be receiving those bills until the virus has either run its course or have killed the patient.
Those who need inpatient care cannot be turned away by law, regardless of insurance status.
Those who do not need inpatient care are being told to go home, regardless of insurance status.
> We do have the resources to test everyone.
This is factually false, and has been repeatedly confirmed by health officials and test manufacturers.
> Banning most tests is a regulatory decision.
.. and it's a decision which the regulators have already undone.
> If people have to pay thousands out of pocket to be tested, that won't happen.
This is not an issue any longer. The test has been determined by HHS to be an essential health benefit which must be covered under ACA compliant public and private insurance plans. State, local, and federal testing facilities are offering the test for free on a widespread basis to those without insurance as well.
Personally that revolution can't come fast enough. This country has betrayed its constitutional duties to its people for decades (supporting the general welfare, anyone?).
We NEED revolution at this point since it seems both of our two parties are on the same side when it comes to Working Class America.
The framers would more likely to suggest that we NEED a revolution over the expansion of the federal government beyond their limited enumerated powers. They'd also certainly disagree with income taxes as well.
Put it on a credit card and only make minimum payments, most likely
Also, when we reopen, it will be short term and still pretty locked down. It's absolutely not the end, but a slight reprieve.
But there will definitely be fewer places to spend it.
Does my state have to apply for this?
Not sure why the downvotes. It’s literally true for the first time ever. The way the new benefits work out your unemployment check STARTS at the equivalent of $15/hr x 40hr/week = $600/wk. In California, for example, you can get up to $1,050/wk instead of the old maximum of $450/wk.
If you made $15 an hour in California you were making $600/wk. On unemployment you now make $877/wk. That’s a 46% increase. It’s huge.
You're being downvoted because you overgeneralized ("many places"), but this is actually true in some scenarios.
See "Unemployed workers could get more than 100% of their paycheck under the coronavirus bill" https://www.cnbc.com/2020/03/27/how-unemployed-workers-could...
It's a perverse incentive to getting people back to work, so I expect this loophole will be closed soon.
Unemployment isn't forever and the additional $600/week is only for the current pandemic situation and expires as of July 31. This is not a windfall for those who are now suddenly without a job.
But more importantly, someone who has just been laid off has close to zero employment options right now. They might be able to find a short-term job at a grocery store or Amazon but if they're over 50 or have any sort of health issues that's probably unwise. And even if someone is willing to risk it they're unlikely to get the position anyway, no matter how qualified, because those few positions are absolutely flooded with applicants[1].
There cannot be a "perverse incentive" (or any incentive at all) to stay home and collect unemployment when that is a person's one and only option.
[1] https://abc13.com/heb-who's-hiring-houston-jobs-covid-19/606...
The economy isn't all-or-nothing. This situation is bad, but it's an exaggeration to suggest that no one is hiring.
The perverse incentive comes into play when people start turning down $20/hr jobs because they're making $23/hr on unemployment insurance. They'll want to go back to work eventually, yes, but they won't rush into it will literally cost them money to do so.
I'm not suggesting that unemployment insurance is comfortable or ideal, but I think it's important that we avoid situations where people must deliberately choose to reduce their income to return to work.
This is not a time to be talking about bootstraps.
We're not going to emerge from this and just hit the unpause button. Yes some industries will bounce back quickly, but 9 million people over two weeks losing their jobs is an absolutely massive number, and we haven't hit peak yet.
There's no way they'll just be simply rehired when this is "done".
We're in it now, and no amount of wanting to hit the abort button will change anything. It's a fantasy to assume people will just go back to work, the economy will get better, and everything will return to normal, aside from a hot new opportunity for mass body disposal services.
No, I'm not advocating to abort a quarantine and have people return to work.
>It's a fantasy to assume people will just go back to work, the economy will get better, and everything will return to normal
Agreed. I'm advocating we stop believing in this fantasy and face reality that this is the start of a long term recession.
This is definitely the start of interesting times - we don't know how things are going to look at the end of all this. The best economics times have come on the tail end of adversity.
That can be a long, long time too. The black plague was a boon for workers who survived it since the labor pool was small and consequently wages were higher. Plenty of free land, too. The downside was, you know, the black plague...
The vast majority of those dead are going to be 65+. Maybe I'm just feeling salty this morning, but considering how much that generation has stuck it to my generation I'm not even a little bit interested in trading economic collapse for their lives.
With the exception of health care, aren't they buying that stuff from their own savings? Do we hand out luxury items? Am I saving for my retirement for no reason?
Are the immune compromised also simply drains?
How much wheat does your savings grow? How many pairs of pants does it make?
Either way, you dodged my question about the immune compromised. If you're trying to sanitize this whole thing as simply economic numbers, where those who take should be removed for those who produce, you're forgetting about those people, as well as all the other producers who will die.
This will be the news for the next 2 years. India and Africa are only just starting on this journey.
The world's economy and every nation's economic structure will be completely changed.
Good luck doing that before this is all over.
Also, you're talking about a mortgage for a property worth over $400k. It's unreasonable to expect that unemployment would be enough to pay everyone's mortgage, regardless of how much it is.
But Portland is pretty affordable. $400k doesn't get you much in California (there are foreclosures in South Central listed for that much on Zillow right now).
Quick google search shows that the median income for the UK is £585 per week, which works out at around £30,420 a year (or $37,647.03 USD).
Hardly luxurious in the UK or US. Probably enough to get by, but nothing amazing.
Can't believe how out of touch with reality some of the people on here are. My post is sitting on -4 right now. 24KGBP per year, after tax, for being unemployed. You've got to be kidding me.
Wow. It's bizarre one can neither create nor add value yet proceed to receive thousands of dollars for an extended period of time (often multiples more than they will ever "pay in" to the system).
I know too many people already milking it before the pandemic (including family & friends). I accept that it is their personal choice and I don't get emotionally wound up in it or treat them different, though I do feel sorry for them. Learned helplessness combined with ego/entitlement must be a painful state of cognitive dissonance in which to live.
Hard to imagine what this looks like afterwards; it seems like each unemployment instance or broader "depression" further demotivates many Americans while dis-incentivizing the immutable values of knowledge acquisition/application, hard work, sacrifice, risk taking, etc.
There is no such thing as free money. Those who think and act as as if are merely being stripped of their human spirit in exchange. Change my view.
Edit to add: ya'll can downvote but can't share your own views or debate otherwise?
The person's time is valuable (and so they should be compensated) but the most valuable use of their time in the short-term is to not use it at all. Tech does this all the time. We just call it "rest and vest".
"I don't agree with everything you say (one can argue there is economic value in staying home during an outbreak of a highly transmissible virus) but I do think you are right in a lot of ways (it's a perverse incentive, and unproductivity should not be subsidized in general)."
Cool. I would advise against agreeing with everything I say ha. Look if people want to pay their own way in terms of UI over their working years and save up some sort of 'emergency/flex account' managed by the gov for when the inevitable storms roll through I think that's a fine idea.
The fact that it is forced upon all earners individual and businesses, and ultimately only used by some and then abused by a chunk of those who use is a different story. It's the equivalent of stealing money from your neighbor and their family! Just because the gov sits in between the two parties and forces the transaction somehow socially acceptable, even laudable? WTF.
As I've mentioned above, beyond normalizing this behavior is the sneaky side effects it has on the unemployed recipient...backward incentives, dependencies via erosion of self reliance.
You're extrapolating what's essentially an insurance policy into this image of some luxurious welfare state where no one has any incentive to work. That's not what unemployment benefits are.
Your commentary is the equivalent of arguing that receiving thousands of dollars to replace your car after it gets totaled is a "hand out", when in reality that's quite literally what insurance is for.
"It's insurance that everyone pays into, so that those who do happen to lose their jobs have an insurance to fall back on until they find another job."
It's a TAX that everyone pays and not everyone uses - even if and when they could because they elect not to sell out their dignity by accepting money they never earned rather was taken off the backs of others.
"You're extrapolating what's essentially an insurance policy into this image of some luxurious welfare state where no one has any incentive to work. That's not what unemployment benefits are."
I never said it was luxurious, from what I can tell it's a state of living hell...just look at/talk to anyone on welfare they are by-in-large a broken peoples stripped of self-reliance, self-esteem, and self-agency.
"Your commentary is the equivalent of arguing that receiving thousands of dollars to replace your car after it gets totaled is a "hand out", when in reality that's quite literally what insurance is for. "
I don't think it is equivalent...car insurance is optional if you don't want to pay it, don't own a car (many people who opt-out). UI tax is not optional, is it?
LOL. My state maxes at $330/wk and that's taxable income. IDK if the Fed is taxing their payout, pulling other shenanigans (remember Bush II's stimulus checks were a "tax prebate"), or how long they'll pay.
$3,720/m is about 60% of my net income, after taxes and benefits. It'll pay my mortgage, utilities, and keep me out of jail for driving without car insurance. That's about it. In a "WAY lower COL area than SF/Seattle."
Thankfully not unemployed. Yet.
That's the point.
It's not intended to replace your job. It's there to keep you afloat until you find your next job.
The other figure was $600/week, which is $2400/month. Neither of which would meet his needs.
> The other figure was $600/week, which is $2400/month.
The values are cumulative, not mutually exclusive.
You don't have to choose one or the other. You get both.
There's more expenses to living than mortgage and utilities. Food, health care, home repairs, funerals, car repairs, etc.
Yes, that's the point. It's not designed to enable (or even encourage) everyone to live paycheck-to-paycheck during the good times. The value is less than 100% of replacement income for several reasons:
- The system must maintain an incentive to return to work. Paying people 100% of their replacement income to not work will reduce the incentive to return to work. That's the last thing we need when trying to restart the economy as quickly as possible.
- The system should incentivize people to maintain their jobs. If someone can reliably get 100% of their income by being laid off, the incentive to maintain your job is reduced.
- People should share some of the burden for carrying themselves through hard times. This includes maintaining savings to help cover expenses in the event of an emergency and reducing lifestyle spending to reduce expenses. This is a difficult topic to discuss because people reach for strawman arguments about families becoming homeless, but realistically a $60K/year equivalent income is not far from the annual median household income. People can and do find ways to live on that amount all over the country. It's not realistic to expect that we can maintain everyone's previous lifestyle unchanged during unemployment.
- The money must come from somewhere. The more we pay out now, the larger our deficits and the higher our taxes will be in the future. The incentive structures must be aligned to minimize the amount of time people spend on unemployment. It's not designed to be comfortable. It's designed to be a little bit uncomfortable without triggering financial ruin for the majority. I know that sounds harsh, but it's necessary for incentive alignment.
Is there any evidence that shows this? I would think 4 months of 100% replacement income followed by no longer receiving unemployment benefits provides plenty of incentive to return to work.
>This is a difficult topic to discuss because people reach for strawman arguments about families becoming homeless, but realistically a $60K/year equivalent income is not far from the annual median household income. People can and do find ways to live on that amount all over the country.
I mean, the median household income in 2018 was 62k, and an estimated 78% of the country lives paycheck-to-paycheck. Yeah plenty of people can survive fine on it, plenty of other middle class people would be unable to afford their mortgage on it. Forcing people to sell their houses due to job loss from a pandemic seems like a pretty morally unfair system, as well as a poor economic outlook for the country.
Because the banks care if you don't pay your mortgage. They don't mind if your kids go hungry.
But this begs a more fundamental question: When are we going to start pressuring insurance companies and rent-seekers to provide relief? Time and time again, all the bailouts of the past seem to benefit them, but during a time when we need insurance companies to pay out for business interruption instead of claiming "act of God, we exclude pandemics...etc.," we fail to bring them into the conversation.
It's definitely making changes to productivity and I feel for the new parents.
This too shall pass, and they probably won't be too much worse for wear as a result. I tend to think primary school is 80% day care anyway :)
This prevents companies from having to layoff people, and allows them to pickup the slack and rehire everyone again when things get better.
I'm sure it's higher in NYC but at ~$750 / month average it's a significant budget item in our house.
I know in nyc, lining up childcare can be a crazy process involving waitlists and such- but I can't imagine paying them in months they are unable to provide service by law.
It’s taxing but also pretty cool to be able to work and spend time with your kid. I just wish she could interact with people when she sees them outside, she used to pick random strangers and ask for a hug (she’s 1). She’s adapting, but you can tell she’s trying to understand why she can’t run up and play with little kids she sees outside.
It’s also hard to know she sees you ignoring her from time to time. I hope this doesn’t negatively impact her long term development.
It's very unlikely most business interruption insurance policies would cover a pandemic. I'm sure there are many small businesses who think they've planned for this situation whose insurance claims will be immediately denied.
Should that not materialize, the disappointment and anger will reach level not seen in most people's lifetimes.
One reason the V-scenario might not play out is that the US still doesn't have a handle on the testing problem. Without testing, you have no way to estimate the danger to the public of normalizing economic activity. At the first sign of a new outbreak, the entire lockdown cycle will repeat.
Too few people will have gained immunity, and the disease is far too contagious and deadly to take any chances. We still don't know what "immunity" looks like at any rate.
Alternatively, the lies about testing may have burned people so badly by the time the "all clear" is given (whatever that looks like), that few will believe it. The effect would be a national strike/boycott.
And soon. A great many people have a low tolerance for indefinite lockdowns. The longer we go without any kind of plan, the more likely it becomes that people will begin disregarding it. I already see that the amount of traffic on the roads is increasing over time.
What we need are leaders, and it's glaringly obvious that in most states we don't have that. During peacetime nobody notices, but when the SHTF the leadership vacuum is palpable.
Everyone loses in these scenarios.
Could be a cause.
If workers are not interested in actually resuming work for the time being, they would apply jobs for which they would not qualify for, preferably ones that won’t even contact them back.
This is a very cynical view, but could be a partial explaination.
It's not cynical - it's real.
> For example, a single taxpayer with $100,000 in 2019 income would not receive an advance rebate but would receive the $1,200 credit on their 2020 return if their income for the year fell below the phaseout. On the other hand, a single taxpayer with $35,000 in income receives a $1,200 advance rebate but would not have to pay the rebate back on the 2020 return if they make $100,000 this year.
https://taxfoundation.org/cares-act-senate-coronavirus-bill-...
https://lacyclay.house.gov/media-center/press-releases/congr...
That's the amount which will be sent out in checks directly to families.
https://www.wsj.com/articles/trump-administration-seeking-85...
Not true. The unemployment benefits have also been augmented by up to $600/week above state unemployment benefits. This amount applies even if your state benefits have been exhausted.
The $1200 is an extra stimulus check for people whether or not they’re still employed. Not to be confused with the unemployment benefits.
The unemployment benefits (which for many of the unemployed will actually be higher than their regular pay) last for the next four months. If the quarantine lifts by the end of May and businesses reopen then it will be enough. Obviously that's a big if, but for you to come out here and act like you know something with 100% certainty is absurd.
> If the quarantine lifts by the end of May and businesses reopen then it will be enough.
> Obviously that's a big if
Show your work. Forecasting does not align with your statements.
And I wouldn't be surprised if it starts to hit some mid-size businesses as well. A lot of places are getting hit hard right now, and that just flows up the chain. My company hasn't announced any layoffs or cashflow problems, but I can do the math -- most of our customers are relatively small businesses. Pretty quickly their problem becomes our problem.
Nobody is going to the dentist because of Covid -> Dentist stops using my client's services -> Client cancels my project -> I get laid off -> I can't afford to go to the dentist -> Nobody goes to the dentist because they can't afford it.
That story is true for every industry. And it gets worse. In anticipation of the economic storm coming we have stopped all non-essential purchases. Which means a whole lot of businesses are out of revenue. Multiply that across the economy and everything but essentials is grinding to a halt.
The only way out of it, that I see, is the government stepping in and guaranteeing, without a salary cap, unemployment benefits at 80-90% of salary for as long as the crisis lasts. Even then I'm not sure it's enough to fix the actual damage that has happened.
This might have worked for a couple days, but no way it works for multiple weeks.
I mean, the number is almost irrelevant given the extent of the crisis. Might as well make it a million a person because some fundamental truths of the economy are going to completely change.
It decreases to $0 at $99,000.
Edit: double everything for a married couple - potential for $2400 that begins phasing out at $150,000 and drops to $0 at $198,000.
[1]: https://www.nytimes.com/article/coronavirus-stimulus-package...
No one that wasn't already starving should be starving at this point. Except perhaps gig workers.
And not so far down the line your actions have resulted in the deaths of-- say-- 80 people (including a few people who didn't die of covid19, but because they couldn't get treatment due to hospital overloads that you created). People who wouldn't have died if they weren't infected or if the infection came later when treatments were improved or hospitals weren't overloaded-- who wouldn't have died if you'd avoided creating an unnecessary exposure.
So, on that basis, since you're planning on taking responsibility for your actions, we can assume that you're prepared to pay out about a half a billion dollars (OMB values a human life at 7-9 million dollars) to the surviving families of the people your actions were responsible for killing?
I knew that there were some high rollers on HN, but I find myself surprised to encounter someone so eager to "take responsibility" for the consequences of choosing to expose other people to a deadly contagion.
I imagine most people, instead, would find it much more attractive to obey the mandated best practices and thereby be morally and legally absolved of the consequences of whatever infection they inadvertently spread in spite of those efforts. And... hopefully spare themselves an excruciating (and potentially debilitating or deadly) illness at the same time.
I encourage you to take a look at your customer base and think very critically about where that money is actually coming from.
Tech will not be insulated from this and in general I think we'll see a major contraction of the tech labour force. There are so many non-tech companies that want in on the VC and other investor money so they are rapidly building out expensive tech teams to create illusion that they are the next tech giant.
Not to mention the other weakness in tech: RSUs as the main factor of total comp. If the market continues to drop, especially if it hits hards, a huge number of SV workers will be getting automatic pay cuts due to rapidly decreased values in RSU. A lot of expensive real estate in SV is paid for by RSUs.
This crisis is going to be insane.
I'm not clear such contracts make it through bankruptcy court.
The first items. Really, the only items right now. We're 100% not looking at cutting the people working here. This is new and different. 2011 was the last reduction in our labor force, and we only considered human cuts at that time.
Our client services team is in overdrive making sure all our customers are as happy as possible. This is something every company should be doing right now.
True, but selling implies buying...
I just don't know what the future holds for us, I'm sure the company will survive in some form due to our hospital, pharma and defense clients. But we also have a ton of clients in manufacturing, and I have no idea how they are going to manage this.
The thing we have going for us is we run workloads that they absolutely need to run to exist as a business, but if they go completely under there is no avoiding the pain.
So far I feel relatively secure, and they are even cutting us a bonus next week which shocked me. Scary times though, really makes you realize how little you actually control - you just gotta let go and deal with what hits you.
It's is highly likely that these high numbers continue for additional weeks because all the people who couldn't get through will manage to get through in upcoming weeks.
Unemployment numbers, if we're lucky, will crash quickly but there's going to be a long tail on the recovery.
My mother in law used to use Cool Whip containers for leftovers. When we'd visit, she'd send us home with food packed in them. Usually stuff like mashed potatoes, but often good stuff too. And when we'd visit her in a few weeks/month, she'd ask where her containers were. This was a generation that saved EVERYTHING. The idea of throwing something out was disrespectful. Waste was the worst of many mortal sins. All because of the Great Depression.
This behaviour was common with him aswell. Saving even the bones of chicken/cows to make stock.
when a was a smile child and was nagging him for something to eat, he used to tell me i have never experienced hunger, only "trek". (which would be roughly translated to snackish).
Reuse > Recycle† > Landfill
†Assuming Recycle is not the same as Landfill, which it often is.
The correct thing to do here is to return the containers filled with good stuff that you made for her.
Then the reciprocal gestures can continue like an endless game of ping-pong.
Just look at the numbers. 20% unemployment, while horrific in both human and economic terms, also implies 80% employment. When nearly everyone in the hospitality industry is out of a job, I have to think that some other industry is doing relatively better or the numbers would be even worse.
Where is this collapse you all talk about? Donald Pump and Powell will just use infinite QE and monetary policy to fix all of our problems. After all, the US Dollar is still strong due to a liquidity shortage world-wide from everyone being desperate to convert domestic money to USD
Until that liquidity crisis dries up within the world, stonks seem only go up. Money printer goes brrrrr. I've never seen markets behave so effing irrationally before. Investors are pants on head stupid at a level that boggels my mind.
"markets can be irrational longer than you can stay solvent" is being proven to be sage advice with this pandemic.
Personally, I think things are happening too fast to gauge what investor activity is actually reacting too. There can be big movers who are still in decision-making stages and their actions have yet to be made, or they acted hastily and sold, then come back and repurchase, etc.