We are in new territory and sailing in uncharted waters. Be there dragons on the way. or submerged reefs ahead? Oh, and did a mention that the guide is blind and senile, and the captain and senior officers have no idea what a compass is?
Last month’s analysis of the US labour force data – Tip of the iceberg – the US labour market catastrophe now playing out (April 6, 2020) – presaged what was to come. We now know more about the size of the iceberg. It is unimaginably large. Words fail really. This is one of those all-time historical events that make the severe crises of the past (early 1980s, 1990s, GFC – look like blips). On May 8, 2020, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – April 2020 – which shows that the US labour market has collapsed into territory never before recorded. And, given that the data released was drawn from samples that went up to April 12 (establishment survey) and April 18 (household survey), and so doesn’t fully capture the extent of the unfolding catastrophe. More recent data released by the US Department of Labor (unemployment insurance claimant data) shows the situation worsened in the last two weeks of April. In the last two weeks of April 2020, more than 9 million extra workers registered unemployment insurance claims. All the aggregates are demonstrating dramatic shifts to the point that graphs are becoming rather binary – the rest of history and now. The employment-population rate plunged 8.7 points to 51.3 per cent, which is the largest monthly fall since the sample began in January 1948. The U6 measure of broad labour underutilisation increased by 14 points to 22.8 per cent. This is the largest monthly rise in this measure since it was first published in January 1994. The situation will get worse. Its already catastrophic and it demonstrates a massive policy failure from the Federal government. Instead of directing trillions into the top-end-of-town, the US government should have guaranteed all incomes and introduced large-scale job creation programs and a Job Guarantee as an on-going safety net. Instead it is watching over people dying and people’s material prosperity being destroyed....
I have never seen these sorts of monthly shifts.
No-one has.
The scale of the crisis requires dramatic interventions.
The current position of the US government has biased their stimulus spending towards the corporate sector and high income earners.
It disadvantages precarious workers and those losing jobs.
The US government should immediately announce an unconditional Job Guarantee and guarantee salaries for all workers made redundant....Not gonna happen. Watch out below. Anvil dropping.
"Precarity" is taking on new meaning.
Let's be clear about this. It is a massive failure of capitalism based on "the intelligence of markets" and also a massive failure of representative democracy as only the top of the town is protected institutionally and workers serve as pawns in the game of keeping the wealthy wealthy.
Bill Mitchell – billy blog
US labour market data – we have never been here before!
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
See also
The Guardian
43 Million Americans Could Lose Health Insurance Amid Pandemic
10 comments:
Failure? Lobbyists invested a good chunk of money, and they expect returns.
What's the job in a Job Guarantee gonna be these day? Staying home? Then why not a Citizen's Dividend, not guaranteed wage slavery?
The problem with MMT is not that it goes too far but that it stops short of justice.
That's both cowardly and cynical.
Anvils, Andrew. They're about to drop anvils.
Speaking of anvils, the virus is illustrating the absurdity that all citizens may not use their Nation's fiat in account form so as to make getting funds to all of them instantly a possibility for the National Government.
The ways in which humans manage their affairs is absurd. There is a sincere belief among the ruling class, that if workers are not kept desperate, they won't want to work (for them).
”What's the job in a Job Guarantee gonna be these day? ”
There’s a time after these days. Those millions who’ve lost their jobs will not immediately get a job when these days are over. That will take time and that’s where the job guarantee steps in.
So what about the interim period?
The interim period is the time from whence the anvil is released, to the time it strikes the worker on the head.
Bill Mitchell is just hysterically parroting data that is, likely, rearward looking. What good is that? Does he mention that in a period of less than a month the fiscal response has ramped up by nearly $1 trillion above where it was at this time last year? (And last year was a record.) And more is on the way. There's been unprecedented monetary response, too.
Does he mention that states are starting to open up?
Let's see what happens. Things may get a lot worse, but right now policy is moving in the right direction.
"the fiscal response has ramped up by nearly $1 trillion above where it was at this time last year?"
And the state institutions are still incompetent Mike and there STILL some fiscal that is not getting to the filers for unemployment:
https://www.cnbc.com/2020/05/12/florida-unemployment-benefits-delayed-as-residents-face-eviction.html?__source=twitter%7Cmain
Maybe the states are stealing the UE funds to pay the state civil servants and retirees????? Where are states getting their revenues these days????
Or else at least they cant process the claims in a timely fashion...
In any case STILL MORE fiscal on the way....
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