POLITICO Pro reporters on Thursday held the fifth in a series of subscriber-only conference calls to discuss the coronavirus pandemic.
Pro Health Care’s Adriel Bettelheim, Pro Employment and Immigration’s Tim Noah and Rebecca Rainey and POLITICO New Jersey’s Katherine Landergan discussed surging unemployment claims amidst the public health crisis and Congress’ attempts to stem the tide of job loss, as well as what to watch for on the public health front.
Nearly 17 million Americans filed unemployment claims between March 15 and April 4 — surpassing in three weeks the total job losses experienced over 18 months during the Great Recession. Economists’ projections that unemployment could exceed the record 25 percent seen at the height of the Great Depression are becoming mainstream.
Jobs lost so far have tended to be concentrated on the lower-wage end, Tim notes, and have hit workers in the hospitality and restaurant industries especially hard. One small silver lining, Katherine notes, is that states are creating job portals for the few industries — like grocery stores, shipping and health care — seeing upticks in labor demands during the pandemic. In New Jersey, Katherine says, they have around 50,000 job openings listed, although they skew toward lower-paid positions.
While it’s clear that the pace of job loss is unprecedented, we still don’t have a full understanding of the scope of the coronavirus’ effects on unemployment, Rebecca said. The jobs report for April, which comes out the first week of May, should deliver a clearer picture of the virus’ full effect on the economy. We’ll also keep an eye on the unemployment rate and on lagging indicators like wages and bankruptcies. The most up-to-date figures from the Bureau of Labor Statistics put the unemployment rate at 4.4 percent, but that fails to factor in the recent crush of claims. Most estimates put the current unemployment rate in or near double digits.
Congress’ $2 trillion relief package, H.R. 748 (116), signed into law last month extended unemployment benefits to gig workers, independent contractors and others who previously were ineligible. But state unemployment agencies and the Department of Labor are struggling to process record-breaking claims, causing delays for laid-off workers anxious to receive their checks.
The CARES Act allocated $1 billion to help states with administrative costs associated with the influx of unemployment claims, but states governments are saying they need more money to overhaul antiquated filing systems. States have also been clamoring for guidance on how to implement the benefits Congress passed. In New Jersey, Katherine notes, officials are scrambling to find the few remaining computer programmers familiar with the 60-year-old coding language undergirding the state’s unemployment system. Nearly 215,000 New Jerseyans field for unemployment benefits last week, an all-time record.
Democrats for years have been pushing for paid leave, Tim points out. Now, they have it, albeit on a temporary basis through the end of the year. Look for congressional Democrats to push for a long-term extension of paid leave. Working in their favor: Once you give people benefits, it becomes politically very difficult to take them away. Meanwhile, the Senate adjourned on Thursday without agreeing to a deal to deliver additional relief to small businesses, hospitals and local governments, after Republicans and Democrats blocked each other’s proposals.
It’s difficult to predict when there will be a national relaxation of stay-at-home orders, Adriel notes, and also difficult to quantify how effective they've been. There’s still a lot of scientists don’t know about the virus. Epidemiologists modeling its spread are predicting a rolling series of hot spots, with New Orleans and Detroit becoming new epicenters of Covid-19’s spread as evidence begins to cautiously mount that New York’s curve is flattening. Still, President Donald Trump appears impatient to reopen the economy.
Other areas to keep an eye on include potential drug shortages — which we’ve already seen for the malaria drugs Trump has hyped as potential treatments for the coronavirus, without substantial evidence — and how the Covid-19 pandemic may permanently reshape the American health care system. One potential change could be the widespread adoption of telemedicine. The government has lifted regulations and restrictive payment policies on telehealth, freeing up the health care system to more fully embrace the technology during the era of social distancing. It’s quite possible this could become the new normal, Adriel says, though it’s not a panacea: An increased reliance on telehealth could exacerbate disparities in care between poor communities that don’t have access to health systems that employ the technology and wealthier communities that do.