Posted on 05/10/2020 7:58:31 PM PDT by SeekAndFind
Yesterday's employment report for April showed 20.5 million jobs lost and an unemployment rate of 14.7%. This is its worst since the Great Depression. It was at a 50-year low of 3.5% just two months ago.
Awful, yes, but only half as bad as it looks for the economy.
Why? Because roughly half of American workers can earn more from unemployment benefits than they earned at their jobs prior to the coronavirus shutdown, according to Eric Morath at the Wall Street Journal. On top of state unemployment, federal coronavirus stimulus is adding $600 per week.
With my sister, I co-own Red Frog Coffee in Longmont, Colorado. We applied for and were approved to receive a modest Paycheck Protection Program loan that will help us slowly restart operations while enforcing mitigation measures. When my sister reached out to employees to make the return-to-work schedule for this month, half of the staff said they did not want to return to work until their unemployment benefits ran out at the end of July. One employee claims to be making $3,000 per month, far more than he made from salary and tips. Many small businesses report similar situations.
Employees making this rational choice will keep the unemployment figure high, which looks bad, but they are not suffering what unemployed people usually suffer. Their temporarily higher incomes improve their financial lives, which will prove beneficial to the economy as it struggles to its feet.
Among the half of America’s unemployed workers who are not making more than they made at work, many will return to their jobs this month or next as the economy reopens. They did not “lose” their jobs during the shutdown any more than they lose them each weekend during normal times. When the planned closure is over, they will return to work.
One could look at the job losses a different way.
Instead of saying, “What? Twenty million people lost their jobs last month?” we could say, “Wow! Ten million people are making more staying home than they made at work, and the other 10 million should be back to work soon.”
Add in extra stimulus, such as the $1,200 payments from the IRS to individuals with an adjusted gross income of less than $75,000, and it’s easy to conclude that economic damage is not nearly as high as the unemployment figure would lead us to believe.
This is not normal unemployment. It is temporary, and for half of those affected it is a financial boost, not burden.
------------------------------------------------------
Jason Kelly is the author of “The Neatest Little Guide to Stock Market Investing” and “The 3% Signal,” plus he writes an investing newsletter called The Kelly Letter.
Interesting take...
Instead of saying, “What? Twenty million people lost their jobs last month?” we could say, “Wow! Ten million people are making more staying home than they made at work, and the other 10 million should be back to work soon.”
Not likely unless rioting really ramps up. 24 states are Democrap Govenor ran.
Twenty trillion here thirty trillion there...
My personal opinion...if I asked an employee to come back and help me reopen my business and they refused so they can continue collecting unemployment, they wouldn’t be asked a second time. It’s a sign of moral and physical laziness.
Interesting but worthless. You cannot print your way out of this. Fiat money is worthless with no production. This is madness, open the country up, let us go back to work, stop this unconstitutional crap and give us our freedom back, something no rat governor had authority to take away.
Last numbers I read was 33M, not 20.5M.
I don’t see real structural damage.
Once upon a time all the textile factories left the US.
Once upon a time all the shoe factories left the US.
Once upon a time a lot of car factories left the US.
But this time isn’t like those other times.
This time, the mocha latte factories didn’t go anywhere.
The retail shops with jazzy urban fashions didn’t leave and move to China.
The gyms didn’t move away.
I think just about everything will be up and running before the election.
Once the employer offers you employment, does that not cancel any unemployment benefit?
Gyms can move? An oxymoron if ever there was one. Are the patrons suppose to move with it to China?
Where I live in IL where the lockdown was and remains strict, all the manufacturers I know of never missed a beat. Evidently it’s pretty easy to be considered “essential”. And that’s good news for local economies because primary jobs like manufacturing bring in outside money that is re-spent more thsn once (multiplier effect). The demand for those secondary goods and services is as strong as it was before and consumption will quickly return.
Is this from the Babylon Bee?
So why doesn’t everyone just stop working and simply let the feds print Trillions of dollars every month and pay everybody $5000 a month then?
What a bloody joke of an article.
Precisely my point. Glad you caught that. The service economy shut down, but the service economy doesn’t travel overseas. Most of these places will reopen in the same location with the same people as soon as the panic lifts. It’s NOT like heavy industry which DID move overseas when unions forced labor costs in America to rise too high some decades ago.
It is my understanding that that is precisely what is to happen!
But, you KNOW there will be massive cheating!
L8r
Biggest industrial countries in the world. Output in Trillions of dollars
1 China 4.566
2 European Union 4.184
3 United States 3.602
4 Japan 1.368
Plenty of industries still in the US.
This is a domino-effect and if all lockdowns were ended at this moment, things would still worsen before they got better.
Simply: You ain’t seen nothin’ yet. A coffee business may bounce back and rehire employees - or hire better ones - but I estimate perhaps half of the businesses shuttered may not be able to weather the downturn.
Besides: What happens when the unemployment and handouts run out?
And we haven’t really seen what’s going to happen to public budgets. This man-made disaster is going to get a whole lot worse before it’s going to get better. I hope I’m wrong, but I believe that the reason it’s not being debated is because the truth is catastrophic, including possibly seeing a democrat for POTUS in November.
It is like having a two month snow day. The snow is melting and things are ginning up again.
All these people making more money doing nothing than they made when they were working are going to be real disappointed about going back to work. I wouldn’t be surprised to see protests and strikes for the “pay” they were making during the shutdown. Then the Rats can starting pushing universal income to “support” the protesters and pound on Trump for being mean. It will be another Rat meltdown.
Peter Navarro said on Fox that the ramping up of mask production has started to resurrect the textile industry. Look for that to be one of the industries to booms, quickly.
Can the shoe industry also make a major come back?
What other industries might come back from overseas with a vengeance?
PDJT has been trying since Nov. 2016 to convince and bribe/shame industries to return to US soil and away from China. This Wuhan virus is the catalyst to make that happen.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.