Over the last two months the US has witnessed more than 30 million workers filing for unemployment benefits. Although unemployment benefits are being provided to some of the people, these benefits are not reaching everyone due to wide disparity in processing claims and eligibility criteria. A federal job guarantee programme can help in providing basic necessities.
Timothy McBride, Bernard Becker Professor at Washington University in St. Louis’ Brown School, tweeted an article detailing how mass unemployment can be avoided if a federal job guarantee is provided.
The current unemployment benefits programme is inefficient and uses disparate policies to process claims leaving many unemployed workers at risk of food insecurity, depression and losing their homes.
A federal job guarantee programme can help unemployed people by providing minimum wages enabling them to meet basic needs and maintaining their health.
Mass unemployment is a choice. A federal job guarantee could eliminate it. https://t.co/PQw714V1dM
— Timothy McBride (@mcbridetd) May 4, 2020
Ludovic Subran, chief economist at Allianz, tweeted about the consequences of premature easing of lockdown measures and withdrawal of public health interventions and economic stimulus packages. He noted that such measures can lead to second wave of infections prolonging economic recovery or a W-shaped recovery.
Subran shared examples of previous epidemics such as the Spanish flu, which affected the US for more than two years due to resurgence in infections. Similarly, the premature ending of economic stimulus packages in 2011 after the global financial crisis impeded economic recovery. Subran noted that the US should learn from these mistakes and not repeat them to ensure a quick economic recovery.
How to Avoid a W-Shaped Recession by Jeffrey Frankel @ProSyn https://t.co/3QXmQqwk5P | Policymakers should remember “W” stand for premature "withdrawal" of public-health or economic-stimulus measures. As previous crises have shown, such proposals should be avoided like the plague
— Ludovic Subran (@Ludovic_Subran) May 4, 2020
Lawrence Lepard, an investment manager, shared an article on about the possibility of increase in inflation in the current economic downturn. The article details that in the current environment of fiscal easing and commodity shortages can lead to inflation.
Some central bankers believe that a little inflation may be good considering the amount of stimulus spent. An environment where thousands of workers are facing unemployment inflation, however, can cause further damage.
Even a calamity of disease, death and economic destruction afflicting the world all at once isn’t enough to suppress the notion that inflation could return with a vengeance https://t.co/iY9cf5PnSa via @markets
— Lawrence Lepard (@LawrenceLepard) May 4, 2020