Ending unemployment benefits in the US could impact millions of workers and damage the economy, say leading macroeconomic influencers

23 July 2020 (Last Updated July 23rd, 2020 07:26)
Ending unemployment benefits in the US could impact millions of workers and damage the economy, say leading macroeconomic influencers

As economies start to reopen cautiously, unemployment benefits announced during the start of the pandemic will soon come to an end. The abrupt ending of these unemployment benefits along with high unemployment rates could further damage economic recovery, macroeconomic influencers share their views on the Covid -19 impact.

Paul Krugman

Paul Krugman, Nobel laureate, shared an article on how ending the unemployment benefits scheme in the US may push millions of workers into poverty. The $600 per week in unemployment benefits helped workers to meet their expenses.

The benefits scheme is scheduled to expire at the end of July, which economists fear will further damage the economy. Without these benefits, workers will cut their spending and may even be evicted from their homes.

Without unemployment benefits, workers will be forced to look for jobs that may expose them to the virus unless the government takes necessary steps.

Jim Stanford

Jim Stanford, economist and director at Centre for Future Work, shared an article on how Australian companies that received payments under the jobkeeper scheme laid off more than 700,000 workers who were ineligible.

The government’s decision to exclude more than one million short-term casual workers and temporary work visa holders from wage subsidies has highlighted the impact on these workers. The exclusion led to the majority of the job losses due to the pandemic to be borne by these workers.

Timothy McBride

Timothy McBride, Bernard Becker Professor at WUSTL, shared an article on how the number of coronavirus cases in the US could be as much as two to 13 times higher than those actually reported. According to a study based on antibody tests, people showing no symptoms may be spreading the virus.

The study indicates how in some areas the gap between estimated infections and reported cases narrowed as testing capacity improved. The article notes the need to increase testing to control the spread of the disease and highlighted the need for face masks and social distancing.

Mohamed El Dahshan

Mohamed El Dahshan, a development economist, shared an article on the impact of the Covid-19 pandemic on Egypt. The tourism industry was the first to be impacted by the pandemic, which quickly spread to related industries such as hospitality, travel, food and beverages.

The informal sector accounts for more than 50% of the economy employing two thirds of labour. Workers employed in this sector do not have access to social protection. During 2017-2018, approximately 60% were under the poverty line as per estimates by the World Bank. The economic downturn may push even more people into poverty, the article adds.