‘A prolonged depression is virtually guaranteed without significant federal aid to state and local governments’

‘A prolonged depression is virtually guaranteed without significant federal aid to state and local governments’
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‘This is the 10th week that initial jobless claims are three times the worst week of the Great Recession.’

— Heidi Shierholz, a senior economist at the Economic Policy Institute

More than 3.1 million workers applied for unemployment benefits in the last recorded week, according to data released Thursday by the Bureau of Labor Statistics. That includes 1.9 million people who applied for regular state unemployment insurance, plus 1.2 million people who applied for Pandemic Unemployment Assistance or PUA. That’s a new federal program for people who are jobless, but are not eligible for traditional unemployment insurance, including those who are self-employed.

“At this point, 15 states and the District of Columbia are not yet even reporting PUA data. This means PUA claims are still being under-counted,” said Heidi Shierholz, a senior economist and director of policy at the progressive Economic Policy Institute, a Washington, D.C.-based think tank. “This is the 10th week in a row that initial unemployment claims are more than three times the worst week of the Great Recession.”

“The unemployment situation is going to get worse before it gets better, and unemployment benefits applications will continue to flood in,” Shierholz said, “and we should never forget that overall numbers mask the fact that recessions do not hit different race and gender groups in the same way, because of things like occupational segregation, discrimination, and other labor market disparities.”

“Policy makers need to do more,” she said. “For example, a prolonged depression is virtually guaranteed without significant federal aid to state and local governments. We also must provide more funding to state unemployment insurance agencies to hire staff to speed up processing and to make improvements to websites and other administrative infrastructure.”

Others have pushed back on fears of another Great Depression. Cullen Roche, author of the “Pragmatic Capitalism blog,” said it’s impossible to make such a prediction. “The U.S. economy is massively different than it used to be,” he wrote. “In 1929, the economy was basically a manufacturing and agriculture economy, with over 40% of GDP coming from those two sectors. In the post-war era, it became massively more diverse. Manufacturing and farming are now only 10% of GDP, and no sector makes up more than 10%.”

Source: MarketWatch

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