James Gordon
On Friday, he will sign additional orders at the City Council that will provide more assistance to working families.
Democrats have made it clear that another comprehensive economic assistance bill, including $1,400 in stimulus payments, will be their first legislative priority.
Economists, including Janet Yellen, Biden’s choice for Treasury secretary, say more help is needed to stop the bleeding before the federal government can try to rebuild the economy. Here are three reasons:
1. The economy continues to decline
In the first week of the year, the number of new applications for unemployment benefits exceeded 900,000, the first time since August. The number of applications fell only slightly last week and remains at its highest level in months.
The U.S. economy has lost 9.8 million jobs from pre-recession levels. This means more jobs than were lost in 2008 after the financial crisis.
Although most well-paid workers returned to work over the summer, unemployment among low-paid workers remains stubbornly high.
Nearly 25 percent of workers earning less than $27,000 a year remain unemployed, according to Harvard University’s Opportunity Insights project, which tracks the recovery. By comparison, the overall unemployment rate is about 6.5%.
2. It may get worse before it gets better.
Covid’s increasing number of cases and deaths and the resurgence of local chain efforts make it difficult to keep the company afloat.
The number of open and operational small businesses has declined by almost 30% from pre-crisis levels and has continued to decline over the course of the downturn.
The winter weather is making it difficult for businesses such as. B. Restaurants, difficult to attract customers to outdoor patios.
And economists warn that more jobs could be lost in the coming months, despite the launch of the vaccine.
3. Traditional incentives do not work during a pandemic.
Traditional incentive programs, such as one-time direct payments or tax credits, are not as effective when the recession is caused by a health crisis, says John Friedman, professor of economics at Brown University and co-director of Opportunity Insights.
People still won’t go out to eat or spend money on other entertainment if they don’t feel safe, no matter how much money they have in their bank account – and it also means they won’t buy as many new clothes or other things as they otherwise would.
Instead, we need to help those most affected by the pandemic to get through the next six to nine months until this health crisis is over. Then we can rebuild the economy, Friedman said.
He indicated that increases in unemployment benefits, food stamps and rent assistance were programs that could be a temporary stopgap for people at this time.
If Biden has already renewed deportation protection, he will need Congress to extend federal unemployment benefits and increase food stamps. He also urged lawmakers to provide funds for child care, restore paid vacations for emergencies, create new subsidies for struggling small businesses and subsidize health insurance premiums for those who lose their jobs.
CNN’s Anneken Tappe contributed to this report.
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James Gordon
