On Labor Day of 2020, we have seen a situation dramatically different from the decade or so behind us.
Then, the longest economic expansion on record helped to give millions new jobs and bigger paychecks for the past 10 years. Stock markets flew higher, giving more middle-class Americans the prospects of greater family wealth and a more secure retirement one day.
What a turnabout a tiny virus has achieved.
And that turnaround means that we need urgent action from the U.S. Congress to provide help to keep families in rent and groceries.
Last week, more than 800,000 people filed claims for new unemployment benefits. About 29 million Americans were receiving some form of unemployment assistance as of mid-August.
Even as the stock markets have been reasonably solid since the crash originally inspired by the coronavirus, these staggering numbers are more signs that the “real” economy is rather divorced from Wall Street.
The loss of federal supplements for unemployment insurance — in Louisiana, boosting the top check to $847 per month — are starting to be felt in some data about consumer spending. While there seems to be considerable support for some other type of federal supplement, gridlock on Capitol Hill has prevented the Congress from acting on it.
What is the correct number? Who knows? At $600, it’s not enough for an apartment in Los Angeles, but it pays the rent in Lafayette. Surely the great minds on Capitol Hill can agree upon some sort of resolution of this crisis.
In the immediate term, President Donald Trump tapped a disaster reserve fund to pay temporary supplements of $300. The Louisiana Workforce Commission is one of only a handful of agencies among the states having its act together and is actually now making payments from those limited resources.
But they are limited resources, just like those in the bank accounts of millions who are unemployed because of the coronavirus pandemic and its harsh economic effects. The some 350,000 recipients in Louisiana need the $300, but that money will not last forever, and it’s also a limited amount of cash to support a family.
There are other issues in a coronavirus relief bill on the Hill, aid to local governments and schools among them. Still, as Labor Day passed with no action, there will be an impact on consumer spending, because many families will not have other funds to fall back upon.
That lag should concern policymakers at every level, but ultimately Congress has to make decisions and pass legislation that helps out those who can’t earn a living today.