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The following is a reprint of the regional economic update email from Zach Silk of Civic Ventures, sent regularly each week and posted with permission. You can find more content by the team at Civic Ventures at their blog, Civic Skunkworks.
The September jobs report headlines this morning may have superficially looked decent—the unemployment number ticked down to 7.9 percent, and a below-expectations 661,000 jobs were added—but the truth is that the K-shaped recovery continues, with the wealthiest Americans recovering while everyone else loses ground. The number of Americans who have now permanently lost their jobs—as opposed to being temporarily furloughed—has gone up. The damage is particularly egregious for groups that have traditionally been excluded from the economy. In the month of September, 865,000 women dropped out of the labor force, as compared to 216,000 men. And as economist Brendan Duke tweeted this morning, “If you count labor force dropouts since February as unemployed, the Black unemployment rate would be 16.9% instead of [today’s] reported 12.1%.”
This pain is not felt equally by all. A recent economic survey of American households found that 86 percent of Latino households reported financial difficulties, 60 percent of Black households, and “just” 50 percent of white households. If you’d like to examine the disparities so many Americans are seeing in this K-shaped recovery, you should take a few minutes to explore this new reporting and interactive infographic from The Washington Post, which shows how the COVID recession is the most unequal in history. Seven months into what the White House has described as a V-shaped recovery, Black men and women, and mothers of school-age children, lag the furthest behind in regaining employment.Take a moment to scroll through the data here.
Here’s what we are watching this week:
- The latest numbers on the scope of the economic crisis
- The local reaction to the economic crisis
- The need for an investments-first statewide response
- The public response as measured by public opinion research
I’ll continue to share what we here at Civic Ventures are thinking, reading, and talking about in short, occasional updates like this.
The Latest on the Impacts of Covid-19
- Washington unemployment insurance claims during the week of September 20-26:
- 17,734 Washington workers filed new regular unemployment insurance claims (down).
- 13,333 workers filed new Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims (down).
- 2,552,168 initial claims have been filed since the start of the pandemic from 1,377,102 unique individuals.
Initial regular unemployment claims in Washington remain 237 percent higher than last year’s weekly new claims.
Nationally, another 1.4 million Americans filed for new unemployment benefits last week – that’s 787,000 for regular unemployment and 650,000 for PUA.
- REMINDER: if you see an outlet reporting that only 787,000 Americans applied for unemployment last week, they’re separating regular UI from the PUA program for self-employed and gig workers.
- This marks 28 consecutive weeks where new single-week jobless claims were higher than any week during the Great Recession.
- More than 26 million Americans are currently receiving unemployment insurance.
Today’s federal jobs report shows a swift slowdown in recovery, as employers brought back 661,000 jobs in September. That’s down from 1.5 million jobs recovered in August. The national unemployment rate fell to 7.9 percent, but as The New York Times reports, that’s “in part because nearly 700,000 people left the labor force.”
Here’s a chart from Cornell showing how job losses during COVID compare to previous recessions:
A new EPI report looks at data from the Bureau of Economic Analysis and concludes that consumer spending has slumped since the end of the additional $600 unemployment benefits that were established in the CARES Act. In fact, allowing the $600 benefits to expire “pulled $667 billion in purchasing power out of the economy in August alone.”
Ann Saphir at Reuters fact-checked the (relatively few) economic arguments made by both candidates in the first presidential debate on Tuesday. One eye-opening fact Biden mentioned during the debate which raised a lot of eyebrows—the fact that one out of one thousand Black Americans have died of COVID—is, unfortunately, very true.
As I mentioned above, Disney kicked off a new round of high-profile layoffs this week, eliminating 28,000 jobs, largely from its theme parks in Florida and California. More than two-thirds of the layoffs fell on hourly employees, but executives and salaried employees lost their jobs as well.
Applications for new US businesses have increased at the highest rate since 2007, reports the Wall Street Journal. Some are being founded because Americans see an opportunity to launch a business they’ve always wanted to run, and others are being founded because there are no other job prospects available.
A little reminder: Despite the claims of people like Fox Business’s Jim Varney, stock market rallies are not producing a “wealth effect” that’s trickling down to all Americans. In fact, “84 percent of all stocks owned by Americans belong to the wealthiest 10 percent of households,” including 401Ks.
Emily Stewart at Vox explains why small businesses have been uniquely suffering during the period of slow reopening from lockdowns, and why just throwing the doors open and announcing the economy reopened won’t work.
Local Reaction to the Crisis
Locally, one big economic story has eclipsed everything else. Citing “the unprecedented global pandemic,” Boeing announced Thursday that it will move 787 Dreamliner production out of Everett and toward its South Carolina manufacturing line.
Jon Talton at the Seattle Times provided tough but fair analysis of the situation: It does cost more to do business in Seattle, Talton writes, but choosing low-wage South Carolina over high-quality Seattle is something akin to corporate suicide. Here’s a good summary from the piece, but you should definitely read the whole thing: “No company could have received more cooperation and corporate welfare (incentives) than Boeing did from Washington state and Snohomish County. Boeing’s unions folded to please Chicago. If this isn’t “business friendly,” I don’t know what is. Unless you want cheap… the Puget Sound region provides a relatively high-cost but very high-quality business environment for aerospace. In the anti-union, politically red Southeast, you get what you pay for.”
As Mayor Durkan told the New York Times, Seattle’s passage of a minimum wage for Lyft and Uber provide much-needed protections for gig economy workers at a time when business is erratic and more safety features are needed.
Katie Wilson’s latest column for Crosscut offers some policy ideas to help Washington state renters and landlords get through the upcoming eviction crisis without bankrupting tens of thousands of people and leaving thousands more on the street.
A national childcare awareness organization found that Washington state’s child care industry is crumbling. Dahlia Bazzaz at the Seattle Times reports that roughly “16% of the state’s 5,000-plus licensed child care providers were closed as of Sept. 21. With their closure went the combined capacity to serve more than 38,000 kids.”
Real-time Analysis of the Economic Crisis
We are providing regular commentary on our content channels including analysis of the trickle-down policies that fueled the disastrous federal pandemic response, explorations of the system-wide economic fragility that the downturn has exposed, and explanations of policies that will build a stronger and more inclusive economy.
In our Civic Skunkworks Medium publication, Paul Constant discusses Boeing’s decision to move its 787 Dreamliner production line to South Carolina, and what the company once meant to Seattle.
The Pitchfork Economics podcast this week features an interview with Abdul El-Sayed about his role on the Biden-Sanders unity task force. El-Sayed walks Nick and Goldy through the most important points in the Biden transition team’s health care plan.
On Facebook Live, Jessyn and I discussed the one positive moment from the presidential debate—Joe Biden’s description of the K-shaped recovery.
And with the Supreme Court set to consider some of the most essential pieces of the Affordable Care Act exactly one week after the election, Paul Constant examines what the future of health care might look like in the United States.
Like most of you, we at Civic Ventures spent the weekend reflecting on the loss of Justice Ruth Bader Ginsburg. She was among a handful of the most consequential characters in American civic life, and she dedicated her incomparable brilliance to the work of increasing equality for all Americans. It’s important—and also healthy—to grieve this loss, to acknowledge the debt we all owe her, and to recommit to the neverending fight for justice to which she dedicated her life.
Be kind. Be brave. Wash your hands. Mask up.