20% Unemployment Rate

Recall how bad things were in 2009-2010 when the unemployment rate was 10%.
Let the idea of a 20% unemployment rate sink in.

U.S. Treasury Secretary Steven Mnuchin warned Republican senators on Tuesday that the country’s unemployment rate could hit 20% if they failed to act on a proposed coronavirus rescue package, a person familiar with the closed-door meeting said.

Mnuchin met with senators to persuade them to pass a $1 trillion stimulus package that would send cash to Americans within two weeks, and backstop airlines and other companies. The Senate is majority-controlled by President Donald Trump’s fellow Republicans.

A Treasury official said Mnuchin was not providing a forecast but trying to illustrate the potential risks of inaction.

It might be hyperbolic, just to scare the senators into action.
OTOH, it might be true.

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In Ohio, more than 48,000 people applied for jobless benefits during the first two days of this week. The tally during the same period the prior week: just 1,825.

In neighboring Pennsylvania, about 70,000 people sought unemployment aid in a single day — six times the total for the entire previous week.

It's the same story in Minnesota, New York, Massachusetts, etc.
Many of these layoffs won't be temporary.
Plus there are two major problems.

Yet 21 states began the year with less than the amount recommended to remain solvent in an average recession, according to a U.S. Department of Labor report...
The last recession led to the insolvency of unemployment trust funds in 35 states that collectively racked up more than $40 billion of debt to keep paying unemployed workers. In many states, those debts were repaid through higher taxes on employers.

To shore up their trust funds, some states also cut the amount and duration of benefits for those who became unemployed in the future.

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Unemployment insurance was always insufficient to live on, and Republican governors made it that much worse during the Obama years.
But even that isn't the biggest problem.

For one, gig workers — who represent a greater share of the workforce than in the past — don’t qualify for unemployment benefits, said Wandner, a former actuary at the Department of Labor. Uber, Lyft and other companies employing gig workers don’t pay taxes that fund states’ unemployment insurance trust funds.

“That’s a big problem,” said Wandner, especially since the coronavirus’ economic hit seems particularly acute in service industries replete with gig workers.

In another twist, part-time workers who lose their jobs also can’t collect benefits in many states unless they can prove they are looking for full-time work, experts said.

Insufficient tax funding has also led many states — mostly in the South — to reduce the maximum duration and amount of unemployment payments, and make it more difficult to apply and be eligible for benefits, Wandner said.

Gig workers are about to starve.
The gig economy is about to be exposed for what it always was: exploitation.

At a national level, workers collecting unemployment replace roughly a third of their prior weekly wages. That’s a reduction from around 37% a few decades ago, according to a report published in January by the Upjohn Institute.

The share of unemployed workers collecting unemployment checks has also dropped nationally, to about 30% today from more than 40% a decade ago, according to the Upjohn Institute. In North Carolina, just 11% of unemployed workers receive benefits, the lowest share of any state.

“There are states that don’t want to pay benefits,” Wandner said. “And they do a good job at not paying.”

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Killing the economy (and real people will starve too) because for-profit medicine didn't want to prepare for an epidemic is really not ab good idea. And Trump's idea to just print money paper over it just accelerates the transfer of real assets to the 0.1%

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I've seen lots of changes. What doesn't change is people. Same old hairless apes.

boriscleto's picture

That the computer system has 'crashed' 100k tried to sign up Tuesday.

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" In the beginning, the universe was created. This has made a lot of people very angry, and is generally considered to have been a bad move. -- Douglas Adams, The Hitch Hiker's Guide to the Galaxy "

Cassiodorus's picture

https://podcasts.apple.com/us/podcast/ep-53-emergency-podcast-system-the...

And then there is the economic dislocation. With the current leadership 20% will be too low. Think maybe 60% unemployment. "I will be voting for Biden because Trump is worse." How about if y'all just do something about the complete abdication of leadership that's already taken place, the idiots in DC, the idiots who are cutting hospital beds and bailing out the rich from the idea that the current economy is going to exist in two years. Today's Philippine economy is going to look really good in two years.

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"The war on Gaza, backed by the West, is a demonstration that the West is willing to cross all lines. That it will discard any nuance of humanity. That it is willing to commit genocide" -- Moon of Alabama

Raggedy Ann's picture

I don’t know if my grandson is still employed. I’m trying to get hold of him.

Life is changing.

Edited to add ~ I read somewhere that maybe Herr Drumpf will start a big public works project and become FDR. What a kick in the pants that would be.

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"The “jumpers” reminded us that one day we will all face only one choice and that is how we will die, not how we will live." Chris Hedges on 9/11

PriceRip's picture

@Raggedy Ann

          there are plenty of WPA like projects that need to be started,

RIP

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Raggedy Ann's picture

@PriceRip
Who cares who gets it done as long as something is done. He is more "liberal" than he appears. Remember, he was a Dimwit before he was a Rethug and just as we say about people like Warren - once a Rethug - or Clinton even. So, I'm in favor and think it would be a hoot if he, of all people, could pull it off. He would surely be re-elected. He might anyway, but you never know.

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"The “jumpers” reminded us that one day we will all face only one choice and that is how we will die, not how we will live." Chris Hedges on 9/11

edg's picture

@Raggedy Ann

In 2016, Trump campaigned on a $550 billion infrastructure plan. The plan got stalled in Congress after he was elected. In 2019, he worked with Democrats to develop a $2 trillion infrastructure plan. Result:

The tentative accord to repair the nation’s roads, revitalize mass transit and expand broadband systems was reached at a private White House meeting Tuesday between Trump and Democratic leaders in Congress, who said they were pleasantly surprised by the president’s willingness to back a large-scale spending effort.

But the initiative has run into immediate opposition from Republicans who balk at the hefty price tag and from conservative allies who are pushing lawmakers to block it. Those opposed to the deal include Trump’s top aide, Mick Mulvaney, and Senate Majority Leader Mitch McConnell (R-Ky.), who is not in favor of the spending, according to people who have spoken to him.

Source: Washington Post

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Daenerys's picture

@edg might be the worst person in the US right now. Fucking piece of shit asshole.

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This shit is bananas.

Raggedy Ann's picture

@edg
I just commented to PriceRip above that I think it would be a hoot if he could pull it off. We need it to happen, after all.

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"The “jumpers” reminded us that one day we will all face only one choice and that is how we will die, not how we will live." Chris Hedges on 9/11

edg's picture

@Raggedy Ann

Republicans risk a lot if they don't do everything in their power to deal with the virus and combat the potential depression.

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snoopydawg's picture

but their employers say that they aren't fired they just don't have any hours to work therefore they get denied benefits. I'm betting lots of employers are cooking the books to screw people out of getting them. But of course I'm not surprised. You?

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Which AIPAC/MIC/pharma/bank bought politician are you going to vote for? Don’t be surprised when nothing changes.

edg's picture

@snoopydawg

I don't think those people are being truthful. Employers don't decide who gets unemployment. It's a joint Federal/State program with specific eligibility rules set by states under Federal guidelines. And you don't need to be fired. In fact, in some cases, being fired results in denial.

If you voluntarily quit your job or were fired for misconduct, your claim for unemployment may be denied. Not everyone who is unemployed is eligible for unemployment benefits. To collect benefits, you must be temporarily out of work, through no fault of your own.

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TheOtherMaven's picture

@edg

Some states have turned a deaf ear and awarded unemployment compensation anyway. But it isn't universal.

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There is no justice. There can be no peace.

edg's picture

@TheOtherMaven

There's a lot of attention being paid to unemployment because of the virus. And employers that get caught lying can be liable for thousands of dollars in penalties per employee and can face felony criminal charges. I know companies have lied in the past and I know a few will try now, but it's much harder to get away with during mass layoffs than with an occasional employee here and there.

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@edg
the appeal process in order to get UI, yes, employers have some say in who gets UI.

Note: I won the appeal

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edg's picture

@gjohnsit

From snoopydawg's comment: "their employers say that they aren't fired they just don't have any hours to work therefore they get denied benefits".

Not having hours to work is the very definition of a layoff.

I doubt your situation was similar to that of the millions of bar, restaurant, hospitality, etc. employees being laid off due to coronavirus. And you won, as do most people who appeal unless they were fired for proved misconduct or quit voluntarily.

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@edg
I was working full-time for PacBell a lifetime ago.
I even had a union.

It was a very different situation

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@edg
furlough rather than a lay-off notice I don't think you are eligible for unemployment benefits. Theoretically you still have your job. There should be restrictions on the use of furloughs, but I suspect the line will be pushed.

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edg's picture

@FuturePassed

Understanding Furloughs

A work furlough equates to a temporary lay off by an employer to cut payroll costs. The furlough generally has a predetermined beginning and end date. Most furloughs end after a few weeks. During the furlough period, the employee does not receive pay. What many workers do not know is that a work furlough generally qualifies them for unemployment benefits. Employees also can request to use paid personal time or paid vacation time during the furlough period. This provides them with pay during part or all of a furlough period.

Source: Chron -- What Is Unemployment Furlough?

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