IS THE ECONOMY REBOUNDING?
On the Friday before Labor Day, the Bureau of Labor Statistics released its monthly report, The Employment Situation. It reported good news – the unemployment rate dropped to 8..4 percent, higher than in February before the pandemic hit. We added 1.4 million jobs last month, the highest gain since the corona recession began. But while this is progress, it is no cause for celebration. The Black unemployment rate remains double-digit and has not dropped as rapidly as either the overall rate or the white rate, 7.3 percent. Eleven million fewer people held jobs in August than in March. And the "rebound" is not spread evenly across populations. The top 10 percent have already recovered. The bottom 40 or 50 percent are still struggling.
Democratic Vice-Presidential nominee Senator Kamala Harris told CNN that "one in five mothers is describing her children as hungry." The lines at the food banks have not gone down, and in some communities, they are getting longer. Once thought to be relatively immune to the virus, small-town America is now being hit, and forcefully. The challenge is that there are fewer hospitals or health care facilities in rural areas. Economic recovery is dependent on the development of a COVID vaccine, which the current President says will be ready in October or November. More realistic, such as Dr. Anthony Fauci, say a vaccine might not be ready until next summer or even later.
The bottom line is that the macro indicators may show some progress, but a deeper dive is far less optimistic. Hundreds of thousands of small businesses, including 40 percent of Black-owned companies, have closed, resulting in permanent job loss. Some of the hardest-hit industries include the leisure industries -- travel, dining, and more. Women, especially women of color, heavily populate some of these industries. While COVID hit women of color harder than others, recovery will not make these women whole.
The economy will not regain its position from early March. Indeed, the slight comeback in leisure industries has been partly a function of people enjoying safer, outdoor dining. The colder it gets, the more likely it is that people will choose to pass up dining out in favor of eating at home. People bought more groceries between March and August, not wanting to risk the possibility of contagion. Many have cautiously begun to eat out again, but restaurants lose money when they reduce seating because of social distancing.
By mid-September, we will know whether the Labor Day weekend will spark another COVID outbreak. And if there is another outbreak, count on the economy to slow again. Congress could at least prevent some of this if the Senate passed the HEROES (Health and Economic Recovery Omnibus Emergency Solutions) Act, which would extend unemployment insurance, provide relief for cities and states, and provide money for schools. The HEROES legislation has been caught in partisan drama, with a bipartisan group of Congressional representatives passing it, but with Senate Majority leader Mitch McConnell failing to even put the legislation up to a vote. Some Republicans dispute the need for the HEROES Act because of the latest unemployment rate data. But many states and local jurisdictions will lay off public servants – teachers, police officers, sanitation workers, transportation workers, health care workers, and others, pushing the unemployment rate back up.
The August Employment Situation report has more good news than bad. It indicates that for the fourth month in a row, things are improving. But this improvement is not enough, and it could be much better if our legislators would offer some assistance, especially to those at the bottom. Even though 45 has made the economy his issue, repeatedly proclaiming that he created “the best economy in the world” until COVID, his inability to grasp the many ways that COVID will continue to plague the economy raises issues about his sagacity and discernment.
Don’t celebrate the rebound yet. Don’t stop the pressure either. The Senate must pass the HEROES Act or face the consequences. If we want economic recovery AND economic justice, we must vote.
Dr. Julianne Malveaux is an economist and author. She can be reached through www.juliannemalveaux.com
Dr. Julianne Malveaux Economist and Author President, Economic Education For more information please visit www.juliannemalveaux.com or email email@example.com