 Hello, I'm Philip Cohen here to talk today about COVID-19 economic crisis. We're going to talk about what led to the crisis, the contours and extent of the crisis, and a little bit about some proposed solutions for where we are now. You may recognize this curve. This is the course of the pandemic from the beginning of March until now, the middle of September, late September. It's a familiar curve now with that big spike of deaths early on in April, then a decline, then a huge rise in cases in the summertime and a somewhat smaller rise in deaths. But I want to go back to understand the economic crisis, go back to here. March 15th, it looks like a very small pandemic at that moment. But at the time, it was a very big deal. As you can see from the New York Times, page one, March 16th. The virus toll is soaring, the economy is shutting down, business runs to a halt, schools, bars and restaurants are shutting down. And in New York, of course, New York was early because that's one place. The pandemic was so bad, but it gives you an idea of the shape of the shutdown or lockdown. It wasn't all because of the policy of locking things down. It was also people stop traveling, people became afraid, people stayed home. So you had a big contraction in the economy of all the things that involve people going places and doing things with other people. Now I'm going to show a lot of charts that have a lot of numbers and lines on them. And to help simplify the lesson from each one, I've put in red writing on each slide, the take home message for that slide. So if you're writing, if you're taking notes, that's where you should look first. We can quantify this shutdown, this closing down of social behavior using data from our mobile phones, which track our movements. And Google provides this data. This shows all 50 states and I've highlighted some of them. The amount of movement of people around their communities starting in March and up till the present. And you can see this huge decline, a huge contraction of social mobility in March that gets all the way down to almost 40% decline of movement. That's New York down there in April. Some states not nearly as much. And then things started opening up again later to varying degrees in different places. You can see the Sturgis Motorcycle Rally and South decoded there in August. But the general pattern is a huge contraction and then rebounding it different to different degrees. Of course, this was not limited to the United States and that's very important from an economic point of view. This just puts our overall economic contraction in some global perspective. These are the ten biggest economies in the world and going back to 2009. That first year, 2009, is going to be the Great Recession. What we used to call the Great Recession. And that's 5% decline in GDP, gross domestic product, the total economic activity in some places, very big. That red one is China, which always is a little bit different. But you can see a big decline, what used to be considered a very big decline in the Great Recession, followed by ten years of relative growth and prosperity, and then the last two periods there are the first two quarters of 2020. So the first six months, and this huge drop, an absolutely unprecedented drop in economic activity in many countries. The United States, not the worst by any means, but extremely bad, approaching a 10% drop in economic activity in the second quarter of 2020. What does that mean in terms of the United States? Jobs. This just shows you the number of people employed going back to 2000. You can see the little recession there after 2000. Then more and more and more people have jobs. Of course, the population is also growing during this point. A leading up to what used to be called the Great Recession 2007, 2009. A big decline in number of people employed all the way back down to about 129 million. And then this remarkable period of increasing employment all the way through the Obama years and continuing into the Trump years of more and more people employed up over 150 million people then employed. And then to March of this year, absolute drop. 22 million jobs lost in the United States, at least temporarily in March and April and the economic consequence of that is absolutely unprecedented. Here it is in percentage terms. You can see the percentage of people in their prime working ages, 25 to 54, employed again for the last 20 years. That rise since the Great Recession for both men and women and then the plummet in the last couple of months. So it's an 11% decline from February to April, proportionally a little bit larger for women for reasons that we'll understand in a minute. But that's the scale of that drop again. Nothing like this ever and we're way back to where we were, way back to lower than where we were during the Great Recession. Just briefly to put this again in context of previous economic recessions. That purple line is the 2020 recession, that's us right now. And you can see the drop is unprecedented. But the other thing to see is that the shape of what's happening now may be different. So we had a very rapid rebound in the first two months after, first three months after April as employment came back. We're still down 8% in employment and you can see the contrast with previous recessions which happened slower and then took longer to recover. We don't know if we're going to be rocketing back up or if we're going to be spending years and years coming back to where we were. So that's one question for now. So that's in terms of employment but we've also had a lot of businesses closed, especially small businesses. A good way to look at this is actually with Yelp. Yelp has been keeping track of the businesses that are listed as closed in their database. And they're up to approaching almost 100,000 closed businesses now and increasingly now they're permanently closed. So somewhere listed as temporarily closed or initially now converting to permanently closed. And so the permanently closed number of businesses is very high. Every one of these represents lost jobs, shattered hopes and dreams and so on. And they're all around the country. However, because of the nature of the shutdown, the businesses that are closed are not equally positioned across all sectors of the economy. You can see on the right that it's restaurants and retail that were the hardest hit. Those are the where we lost the greatest proportion of businesses shutting down, breakfast and brunch and burger and sandwich and gift shops, also clothing stores that suffered the most. And then the ones that suffered relatively least like lawyers and architects and accountants and some of outdoor work like trees and roofing and so on that continued going on. So not equally distributed. The pain of this shutdown and this great economic decline was not equally distributed by any means. These are the occupations that have the greatest decline in employment. This is the number of workers who were lost in each of these jobs. And you can see waiters, cooks, cashiers, retail sales, maids and housekeepers were among the hardest hit. In addition also some construction jobs and laborers as that work was canceled initially. But millions of workers just in these retail sales and restaurant jobs were lost. To get at the inequality of the losses, look at the census data that shows the loss of employment income. So these are people whose income went down from their jobs or from someone else in their household. So it's self or household member who lost money because of employment decline. And this basically is a catalog of U.S. inequality. Skipping gender, for a moment you can see Hispanic and Black workers are the most likely to have lost employment income over 50 percent of them. It's also single people, divorced and separated people. Then look at the income gradient. The people with the lowest incomes are by far the most likely to have seen a loss of income during this period. Also people with health problems. Fair health, poor health, good health, that decline there shows the people who already had more health problems are more likely to be suffering. And that's not, that's because of where they were socially located in the first place, the people with these service jobs and other jobs that were hard hit in places that were hard hit were people who were likely to already have health problems. Highly correlated with education. So people with less education are much more likely to have lost job income from this catastrophe. Households with children and younger people, more than older people. Older people, especially over 65, a lot of them don't have jobs to lose. So they're on their fixed incomes, retirement incomes or whatever. And those have not been so badly hurt. Just to get back to gender for a second, the reason that it's relatively similar for men and women is because most households have a man and a woman. So they're experiencing the same thing. But also there's more single parents, mostly women who are losing jobs because they're kind of jobs they have. On the other hand, old women who are retired, there are more old retired women who are not losing income. So I think that's why that balances out in the gender effect is relatively equal. But except for that, this shows a very strong, very strong relationship with all the things that we normally think of as inequality in this country. So it's exacerbating inequality. We're also not dealing with this crisis equitably. There are a lot of ways you could look at this. This is just one, the percentage of people who are unemployed, who are actually receiving unemployment benefits. It's a common myth that everybody who's unemployed gets the benefits. But in fact, it requires paperwork. It requires somebody to approve the paperwork. It requires the time and energy and know-how of how to get it. And you have to be in a place where the bureaucracy is supportive of that. So for all of these reasons, whites are much more likely than blacks who are unemployed to be getting unemployment benefits, Hispanics somewhere in between. And that has to do with the states they live in and the local governments and the access they have to this benefit that we're supposedly providing to help people through the crisis. So in addition to the certain kinds of jobs to be more likely to be affected, we also have inequality in how we're dealing with it. Now, separate from income, you can also ask a basic question like, do you have enough to eat? And amazingly, in the United States today, we have a very widespread situation of food insecurity, food scarcity. 22 million U.S. adults right now are living in households that didn't have enough to eat in the last week, that either sometimes or often didn't have enough to eat in the last seven days. This is as of the end of August. You can see for people who lost a job in the household, it's pretty common. 15% of those people don't have enough food. And then also black and Hispanic, more than white a nation. And look at the income under $25,000 income over a quarter of them didn't have enough food in the last week. Absolutely astounding numbers for the depth of the crisis and the emergency nature of this crisis. Lower education and also families with children are more likely to be food insecure at this moment, which is just terrible. Okay, let's talk about housing. Important background information to the current crisis is that rental cost burdens were already high and were rising for most renters in the last decade. So this chart shows people whose household incomes are under $75,000. The percentage of them who had a moderate or high cost burden from their rent, that is they're paying 30 to 50% of their income on rent, which is considered to be too much. So at the lower end under $15,000, most of them have cost burden, rental cost burden, and for all groups under $75,000, it's been increasing over the last decade. So we already have a housing crisis brewing in this country where people don't have enough money to pay for their housing and also pay for other things. So as the sociologist Matthew Desmond says, the rent deets first. And then where has this crisis taken us? The Census Bureau in that same survey asks people the percent living in households that are not currently caught up on rent. Are you currently caught up in rent in the household you're living in? 15% of people said they're not living in a household that is currently caught up in rent. It's highest among black households, lower among Hispanic and Asian, and lowest among white. Again, education and the income grade. And the same thing we're seeing, this crisis of food and income and also housing. I don't know what's going on with the people over $200,000. Why 12% of them are having a hard time paying their rent right now? That's something to look into. When people can't pay the rent, they get evicted. A huge part of the experience of poverty in this country involves eviction, involves getting kicked out of your house. And this has been happening during this pandemic, just like it does in the other time, with some exceptions, which we'll talk about. But first, let's just get a look at what it's like. Well, Deputy Benny Gantt with the Harris County Constable's office executes judges' orders to evit. Israel Rodriguez is the tenant at this apartment. It is not alone. 20-month-old Israel, his brother, four-year-old three-year-old, and her mother are some of the estimated 40 million Americans facing eviction in the downward spiral of the COVID economy. It ain't Russian, but do it again for me. Rodriguez admits he hasn't been paying rent behind thousands of dollars. It's my fault in eviction. It was like going out there in the corner. But when he, I lost my job. So it took me like a month to get another job. This is my change, but I ain't making it with 300 dollars. It's nearly 300 dollars. The scroller now carries their possessions. It's mainly the kids' clothes, because we inherit what's been told almost every day. Make sure we got no toilet paper, a little bit of paper for the kids. What are you going to do with all of your stuff? That's trash. They get thrown in the trash because we don't have a car, we don't have help. We don't have nobody that can come help us out right now. Nobody. We've got ourselves. We need to be with her. We need to be with her. How does you as a law enforcement feel about seeing a family like that? Oh, I forgot. I've got six kids. Six children. And, you know, the kids, you know, the mom and dad, and the most constituent stuff. Deputy Gantt, an officer for 45 years, is just starting his day. Eight evictions are on his list. A couple of victims are here. Two of them at each stop. People behind on rent are ordered to leave. Recessions. Hold out. Where are you guys going to go now? I'm going to the hotel. You can go to the hotel. As Deputy Gantt works through his list, we get word that 200 eviction orders have come through the Harris County Courts for this week. That's double what they normally saw for an entire month before COVID. 200 on Monday. What does that last a lot? Yeah. What does that say to you? Well, what that means is that they're ready to start having people who are losing population. It is a backlog. It's also just one person from one of America's hardest hit cities in evictions. The job takes its toll. I don't really want to put her out here. But I have to. And if this guy gets older. At this apartment, the tenant is an elderly woman. He can no longer afford the rent. The landlord to move her. And Sisto Munoz works. But he doesn't want to. I have a family name. I have a sister of my own. She's my mom. And we don't know. That's the place. That's the one I see you do. Midway through the eviction, Deputy Gantt decides it's too dangerous to evict her in the Houston summer heat. I'm not going to put her out here. And it's free. And we'll call social services instead. Is that the guy? But tomorrow or the evening? A one day retreat with an uncertain tomorrow. You have a situation where people aren't working. They don't have anything to invest in. Done a lot going to town. That's heartbreaking. That's just heartbreaking to see what these people are going through. I know there was a CDC announcement today. You've been reporting on it. Is it clear how it might work? Absolutely not. So at the end of the report, you see them mention the eviction moratorium and the confusion around that. Well, it's helpful in some ways and confusing in some other ways. It came from the Centers for Disease Control and so it's a health-based moratorium. This is you can't evict people under certain conditions where it may be spread the pandemic or be detrimental to their health. So there are five conditions for preventing that are necessary to prevent an eviction. You have to be seeking government assistance. You have to have an income below $100,000 or $200,000 for a couple. You have to affirm that you've had a substantial loss of income or an extraordinary medical expense. You have to be making partial payments if it's possible, if you can, and you have to say be able to show that being evicted now would lead to your homelessness or living and doubling up in crowded conditions which would be detrimental for public health. So those are the conditions that have to be met and then it's unclear because the guidelines are sort of vague and subjective who's going to actually be protected under this moratorium. It turns out it really depends what state you live in, even what county, even what judge you get when your eviction case comes to court. People still may have to go to court to fight these evictions. The other problem with this moratorium is it's not paying rent for people. It's just saying you can't evict them right now. So there's no relief for landlords. So a lot of landlords can't make their payments while they have tenants who are not able to make their rent payments. And then the rent, like the reporter said, the rent is accruing when the moratorium on eviction is up you will still have all the rent that you owed will now be a debt. So we'll have to resolve that later or else we're going to evict millions and millions of people when the moratorium ends. Okay, so what should we do? There's a lot of debate about what we should be doing about this economic crisis which is having such catastrophic consequences which is exacerbating inequality and which is not showing signs of rapid improvement at the moment. So here's one set of proposals from the Economist and Former Labor Secretary Robert Reich. Number one, the most pressing task of this stimulus bill is to contain COVID-19. Its catastrophic rates of sickness and death as well as tragic economic consequences require the boldest remedies this country is capable of mustering. There will be no economic recovery until the virus is contained. Other nations, among them Germany, South Korea and Italy have contained the pandemic with comprehensive testing, contact tracing and isolation. The House of Representatives wants to provide 75 billion dollars for these measures in addition to free access to coronavirus treatment and support for hospitals and other providers. This is the absolute minimum of what's needed. Number two, the bill must extend unemployment benefits to help people survive the worst economic crisis since the Great Depression. Previous coronavirus relief legislation added 600 dollars to weekly unemployment and extended coverage to gig workers and others not normally eligible. But these payments are about to end for roughly 25 million people. If they do, we can expect more human suffering and more joblessness because you see the extra purchasing power has helped sustain the economy. The payments should be continued at least through the end of the year as the House bill provides. Now some say the extra unemployment benefits have discouraged recipients from seeking jobs. That's rubbish. Given the size of the economic collapse, few jobs are available anyway. And normal unemployment benefits typically pay a small fraction of the wages of jobs that were lost. So even with the extra benefits, working people have a strong economic incentive to return to work once COVID is contained and these benefits expire. Not to mention it's good for the economy when people have extra money to spend to sustain remaining economic activity. And finally, it's beneficial to the public's health that as many people as possible avoid workplaces that pose any risk of infection. Keeping people home to contain the virus is the only way we get the economy back on track. Number three, the bill must prevent a potential wave of evictions and foreclosures. 32% of households missed their July rent or mortgage payments. The bill must extend the federal eviction moratorium and provide assistance for renters and homeowners to pay rent, mortgages, utilities, and other related costs. Substantial additional resources for housing assistance is a no-brainer. Number four, the bill must shore up state and local budgets. State and local governments are facing huge budget shortfalls over the next three years. Without federal aid, vital public services will be on the chopping block. Schools, childcare, supplemental nutrition, mental health services, low-income housing, healthcare, you name it. At a time when the public needs these services more than ever. For public schools, the issue isn't so much whether to reopen, but how to do so in a way that doesn't risk the health of students, teachers, and other school personnel. This will require substantial additional resources. If we could afford to give corporations a $500 billion blank check in the last round of relief legislation, we can surely afford to help struggling state and local governments. The House bill provides nearly $1 trillion to state and local governments, which is minimally adequate. Number five, don't compromise what's needed in the bill out of concern about the national debt. The real issue is the ratio of debt to the size of the economy. The government must spend large sums now to help the economy recover faster, thereby reducing the ratio of debt to the overall economy over the longer term. Besides, as we learned during the Great Depression and World War II, large spending to reduce human suffering and promote economic well-being is well worth the cost. It's what almost every other nation is doing. Now, not everybody agrees with those proposals, but that's one set, and they have some common elements which you'll see in a lot of the debate. One key point to be made through all of this that economists tell us is that it's good, it's necessary and fine for the government to be borrowing money, a lot of money right now to spend to help mitigate this economic crisis. Interest rates are very low. Getting the economy going is better for the national debt in the long run anyway, so spending money is good. The question is how to spend the money. One obvious thing to do, they've already done some and may do more. Cash stimulus, simply sending people money. Increasing unemployment insurance or continuing the emergency unemployment insurance that we had during the summer. Rental assistance, so not just a moratorium on evictions, but actually putting money in the hands of renters and landlords so that people don't get evicted and landlords can maintain their properties. Increasing food support, whether it's food stamps or support for meals in schools, including for schools that are closed. And then there's the huge problem of state and local governments that are having catastrophic budget crises of their own, which is leading to large-scale layoffs of people like firefighters and medical workers and all kinds of state and municipal workers. And so without a big infusion of cash from the federal government to state and local governments, we're going to see a lot more unemployment and declining services down the road.