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Technologically advanced systems needed to help unemployed – leading macroeconomic influencers

29 Apr 2021 (Last Updated April 29th, 2021 08:37)

Economists believe that revamping the unemployment systems will help in providing aid to those who need it.

Technologically advanced systems needed to help unemployed – leading macroeconomic influencers
Credit: Valerii Evlakhov/Shutterstock.com

Economists believe that revamping the unemployment systems with technologically advanced infrastructure will help in providing aid to those in need and boost the economy.

Dr. Chloe N. East

Dr. Chloe N. East, economics assistant professor at University of Colorado, Denver, shared her article on the need to invest in technologically advanced infrastructure for state unemployment systems and pre-setting benefits based on the economic conditions. This will help in adjusting benefits automatically to the level of need and helping those people who are struggling the most thereby stabilising the economy.

The flaws in the existing unemployment system were exposed during the pandemic with some people barely receiving any benefits, while others earning more than what they did when they were working. Many employers found it difficult to rehire employees as the increased unemployment benefits acted as an incentive for employees to stay at home.

Several proposals have been made to overhaul the unemployment system including one made by Arindrajit Dube of the University of Massachusetts Amherst, which aims to keep the duration of jobless benefits based on the unemployment rate. For example, states with a jobless rate below 5% will provide benefits for 26 weeks, while those with 10% would provide benefits for 98 weeks.

Armine Yalnizyan

Armine Yalnizyan, an economist, shared an article on how lawmakers and policy makers in the US are focussing on improving childcare in order to boost the economy. Childcare is often unaffordable and inaccessible, and the situation has been exacerbated by the pandemic. Since the start of the pandemic, more than 2.5 million women have left the workforce majorly due to the high cost and lack of childcare.

The US President Joe Biden recently introduced the American Families Plan, which includes funding for childcare and universal preschool. Democratic and Republican lawmakers have also presented their proposals recognising the need to provide childcare. Experts believe that childcare issue not only affects parents but also the broader economy and needs to be taken seriously to ensure economic growth.

A report from the National Women’s Legal Center has found that providing access to high-quality childcare to those who need it will boost the number of women with young children working full-time by 17% and lifetime earnings by $130bn.

Sonal Varma

Sonal Varma, an economist, shared an article on how business activity in India saw the steepest weekly decline in more than a year by 24%, according to Japanese brokerage firm Nomura. The mobility restrictions and cautious consumer behaviour amid the second coronavirus wave in the country were attributed to be the main reasons behind the decline.

The impact on other areas of the economy such as manufacturing, agriculture, and online based services, however, remained low. The decline in business activity is much less than that registered during the nationwide lockdown last year. Nomura noted that pent up demand could return soon as the vaccination rate increases.

Tim Bartik

Tim Bartik, senior economist at the Upjohn Institute for Employment Research, shared an article on new research highlighting how the pandemic led to increase in unemployment and lack of education among young adults in the US. The research identified disconnected youth aged between 18 and 24 years who were neither employed nor in any training programmes.

The research found an increase in the disconnection rate from 13% in February 2020 to 25% after the pandemic started in April 2020. The number of youths employed during the summer continued to fall although the number of youths employed part-time returned to pre-pandemic levels.

The youth disconnection rate still remained high towards the end of 2020 mainly due to the fall in school enrolments. The research shows that the disconnection rate could have long-term effects on the earnings of young people.