Speaker 1: My name is Rachel Hagemeier. I am lucky enough to
Speaker 1: work as the manager of Education and Community Engagement at
Speaker 1: the Canton Symphony Orchestra in Canton, Ohio.
Speaker 2: I am a.
Speaker 1: Recent graduate of the Baldwin Wallace Conservatory of Music, where
Speaker 1: I majored in bassoon performance and Arts Management and Entrepreneurship.
Speaker 1: As someone who is in their first year of professional work,
Speaker 1: I did not think that a global pandemic was going
Speaker 1: to be my biggest worry while on the job, since
Speaker 1: the majority of our patron base are elderly and more
Speaker 1: at risk to COVID nineteen. We were watching the outbreak
Speaker 1: very closely. Over the last week of February and the
Speaker 1: first week of March, when reports of cases in America
Speaker 1: were becoming far more frequent, we knew that we had
Speaker 1: to start thinking about what would happen if we closed down.
Speaker 1: We watched preparedness videos and started creating plans for working
Speaker 1: from home, canceling concerts, etc. We hoped that we wouldn't
Speaker 1: have to use any of these plans, but unfortunately that
Speaker 1: was not the case. This is my fifth week working
Speaker 1: from home and the Symphony has now canceled all of
Speaker 1: our concerts and events through the end of the season,
Speaker 1: which is June twelfth. We canceled our fundraiser and have
Speaker 1: announced we'll be doing a shorter season next year. Working
Speaker 1: from home isn't all that bad. I've been able to
Speaker 1: connect with our community through online educational videos and more
Speaker 1: social media presence. But I've been worried. Worried about our musicians,
Speaker 1: who make their living in a gig economy. With this
Speaker 1: pandemic and the shutdown of live music, so many people
Speaker 1: have lost their source of income. Thankfully, the Canton Symphony
Speaker 1: has been able to pay musicians a portion of what
Speaker 1: they would have received for concerts canceled. But what about
Speaker 1: the income from smaller concerts we were going to put on.
Speaker 1: What about other orchestras. What about their gigs for weddings, Easter,
Speaker 1: maybe even this coming summer.
Speaker 3: Nothing.
Speaker 1: I've been worried for our students and the community's teachers.
Speaker 1: Seniors have had their last year taken away from them. Students'
Speaker 1: ability to learn their instruments in an ensemble setting has
Speaker 1: been taken away from them. I'm worried for the future
Speaker 1: of the symphony. How long will we be able to
Speaker 1: support this financially? A grant from the government will only
Speaker 1: last so long. America's orchestras and the arts in America
Speaker 1: are suffering because of this pandemic. We are unsure how
Speaker 1: this will affect things in the long run, but there's
Speaker 1: a strong likelihood that this could break many organizations. Life
Speaker 1: is now planning for a future that is uncertain. Life
Speaker 1: is now trying our best to connect with our community
Speaker 1: through rebroadcasts of concerts, virtual orchestra, online education content, and
Speaker 1: home videos for musicians. I am trying to use this
Speaker 1: time to work on collaborations and projects I didn't have
Speaker 1: time for before. I'm trying to stay positive, but it's
Speaker 1: hard when the future is uncertain. I know this isn't forever.
Speaker 1: I'm grateful that I work in a field that expresses
Speaker 1: the human experience and connects people despite political, racial, geographical,
Speaker 1: or economic differences. Music is something all humans have in common.
Speaker 1: It's something we can share while we are separated during
Speaker 1: this pandemic. I only hope that the organizations that provide
Speaker 1: these experiences to the world will be supported through this
Speaker 1: pandemic and come out of the other side stronger than ever,
Speaker 1: ready to spread the joy and connection that music provides.
Speaker 3: My name is a Leah Crabtree and I live and
Speaker 3: work in Seattle, Washington with my girlfriend and our menagerie
Speaker 3: of pets. The industry we both work in is hospitality.
Speaker 3: I am a bartender and server at a sports bar
Speaker 3: in downtown in the Financial District. I have been in
Speaker 3: this industry now for over ten years, and while it
Speaker 3: can be difficult, I really enjoy the fast paced nature
Speaker 3: and the social interaction. I first became aware of COVID
Speaker 3: nineteen back in early January. We were discussing it at
Speaker 3: work and later discovered one of the first US cases
Speaker 3: was in our state. It wasn't until March that things
Speaker 3: became more apocalyptic. About a weekendo March, more and more restaurants, bars,
Speaker 3: and hotels were laying off staff or deciding to close
Speaker 3: up for the month. As our customers dwindled, so did
Speaker 3: our hope of getting through this winter. We had all
Speaker 3: just made it through the slowest months for sales in
Speaker 3: our industry, and we're looking forward to spring, when business
Speaker 3: would inevitably start ramping up monetarily during the winter months,
Speaker 3: those who have savings from the summer are living off
Speaker 3: of that, so when spring hits, we are all out
Speaker 3: of hot water and can afford to live actual lives
Speaker 3: and not be ruled by work. By March fifteenth, when
Speaker 3: the orders came that we had to shut down, there
Speaker 3: were many restaurants that had already permanently closed. Corporate restaurants
Speaker 3: will most likely make it through this pandemic unscathed, but
Speaker 3: many of the other restaurants that have made Seattle their
Speaker 3: home will struggle to make it through.
Speaker 4: This.
Speaker 3: Rent is very high and has already been pricing not
Speaker 3: only business but people out of the city for years.
Speaker 3: Adding to that the amount of food that has gone
Speaker 3: to waste or given away, the cost of restocking the
Speaker 3: walk in fridges will be nearly unaffordable. Most of us
Speaker 3: live day to day while we work. Our paychecks don't
Speaker 3: particularly go a long way, as much of the money
Speaker 3: we earn as in cash. There is an execut of
Speaker 3: order that landlords cannot evict during this time, and utilities
Speaker 3: will not be shut off, but they continue to accrue,
Speaker 3: forcing those of us that cannot pay into debt. I
Speaker 3: struggle to think about how long this pandemic will continue
Speaker 3: when we slowly get back to normal. How long will
Speaker 3: some of us be out of work? How long will
Speaker 3: we be able to survive through this. I lost my
Speaker 3: health insurance, so I cannot afford to go to my
Speaker 3: therapist until I get either health care from the state
Speaker 3: or go back to work full time. I am struggling
Speaker 3: with the decision of potentially getting into another line of work,
Speaker 3: but if I get a job, I no longer qualify
Speaker 3: for benefits and would then have to wait longer to
Speaker 3: receive anything through my employer. I am stuck between a
Speaker 3: rock and a hard place, and the only thing I
Speaker 3: can do now is wait and try to enjoy this staycation,
Speaker 3: make the best out of this time I get to
Speaker 3: spend with my partner and our pets.
Speaker 1: My name is Jessica. I'm twenty seven years old and
Speaker 1: live in a semi rural town in New South Wales, Australia.
Speaker 1: Up until a few years ago, I worked in childcare
Speaker 1: before I started caring full time for my elderly grandparents,
Speaker 1: both of whom have many medical conditions such as diabetes,
Speaker 1: chronic obstructive pulmonary disease, emphysema, and heart failure. Prior to
Speaker 1: the pandemic, our days were simple, busy but simple morning
Speaker 1: medication breakfast. Then our days would consist of doctor's appointments
Speaker 1: or errands. On average, there were four to five medical
Speaker 1: or care related appointments per week. Afternoons would usually consist
Speaker 1: of social activities, more errands or rest. Then nights were
Speaker 1: more medications and showering. I first started really feeling the
Speaker 1: impacts of the pandemic in March. My grandparents were told
Speaker 1: to limit when they leave the house and to self
Speaker 1: isolate due to their health conditions. They were and still
Speaker 1: are vulnerable and at risk. This also meant I had
Speaker 1: to do the same, so I didn't spread the germs
Speaker 1: to them. Unfortunately, we live a day to day life.
Speaker 1: When I comes to finances, due to caring for them,
Speaker 1: I cannot commit to a job. Their appointments and medical
Speaker 1: needs take up a lot, if not all, of my time.
Speaker 1: I'm fortunate to get welfare from the government, but this
Speaker 1: only goes so far, especially right now during the pandemic,
Speaker 1: we cannot afford to bulk buy things, and during the
Speaker 1: initial panic buying it was hard to get our hands
Speaker 1: on anything. I was full of guilt here. I am
Speaker 1: supposed to care for them, but I couldn't even provide
Speaker 1: the simple things like toilet paper and bread due to
Speaker 1: our finances and medical needs. It was also hard to
Speaker 1: self isolate or quarantine ourselves. It's a constant battle between
Speaker 1: protecting them from the virus and protecting them from their
Speaker 1: medical issues. There's always judgment from people. Why do I
Speaker 1: need to go out so much? Why can't I just
Speaker 1: stay at home? Why am I putting myself and loved
Speaker 1: ones at risk? I ask myself these questions too, But
Speaker 1: the answer is simple. My grandparents' lives depend on it.
Speaker 1: They depend on me. Being stuck at home is hard
Speaker 1: on my grandparents. I can see the negative effect it
Speaker 1: has had on their physical and emotional well being. They're
Speaker 1: no longer able to attend their rehabilitation and physical therapy,
Speaker 1: leading to more pain and a decrease in their ability
Speaker 1: to move around. Emotionally, they're missing their social outings. They
Speaker 1: feel alone. They're older, and technology isn't easy to understand
Speaker 1: for them. They, like me, are also scared. I'm terrified
Speaker 1: of the potential of my grandparents getting COVID nineteen because
Speaker 1: I know their chances of survival if the infection was severe,
Speaker 1: would be slim to none. I couldn't live with the
Speaker 1: guilt if I was the reason they caught the virus,
Speaker 1: even if I know that my leaving the house is
Speaker 1: in their best interest. Right now, it's a constant struggle
Speaker 1: and I feel like whether I leave the house or not,
Speaker 1: I lose. There is no winning until there is a
Speaker 1: vaccine or some end to this pandemic.
Speaker 3: Thank you so much to everyone who took the time
Speaker 3: to send us those amazing first hand accounts. We really
Speaker 3: appreciate it. Thank you so much.
Speaker 1: We've read every single one and really really enjoy reading them.
Speaker 1: Wish that we could have every single one on the podcast,
Speaker 1: but thank you all so much. Yes, Hi, I'm Erin
Speaker 1: Welsh and I'm Erin Olman Updyke, and this.
Speaker 3: Is this podcast will kill you.
Speaker 1: Yes, we are on episode nine.
Speaker 3: Episode nine. That's a lot of episodes, Erin, I know,
Speaker 3: in a very short amount of time, a very short
Speaker 3: amount of time.
Speaker 1: This is our Anatomy of a Pandemic series, where each
Speaker 1: episode we're discussing a different aspect of the COVID nineteen pandemic.
Speaker 1: So this week is quite a bit of a deviation
Speaker 1: from our normal because we're going to try to wrap
Speaker 1: our heads around the economic impacts that we've seen so
Speaker 1: far and what we might expect to see moving forward.
Speaker 3: Yeah, So Aaron, we are disease ecologists and epidemiologists. Why
Speaker 3: are we talking about the economy?
Speaker 1: Okay, it's a good question, I.
Speaker 3: Mean, and it's we are talking about it for many
Speaker 3: different reasons. Yeah.
Speaker 1: So, one of the things that we've always tried to
Speaker 1: do with this podcast is explore the many different ways
Speaker 1: that disease has impacted humanity.
Speaker 3: Right.
Speaker 1: Our normal episodes take the form of one disease that
Speaker 1: we explore through space and time, Right, Like, we talk
Speaker 1: about the biology of how it makes you sick, but
Speaker 1: we also spend a lot of time on the history
Speaker 1: of how this disease has moved through populations and the
Speaker 1: impacts that it has had across many different facets of humanity.
Speaker 3: Right. And if you've listened to an episode before, you
Speaker 3: know that you can't look at these diseases or these
Speaker 3: epidemics in a vacuum. You have to consider other aspects
Speaker 3: because they involve people, and people are very complex creatures
Speaker 3: with culture and politics and history and thought and all
Speaker 3: of these different aspects that you lose a lot by
Speaker 3: just looking at it in a very directed way. And
Speaker 3: so we're kind of using this pandemic as an opportunity
Speaker 3: to say, hey, look at the myriad ways that COVID
Speaker 3: nineteen is impacting life and humans and humanity. And so
Speaker 3: that's why we kind of decided to dive into the
Speaker 3: economic discussion of this pandemic, right.
Speaker 1: It's something that I think had this pandemic happened in
Speaker 1: the past, we would have touched upon the economic impact
Speaker 1: of it in our history section of a normal podcast.
Speaker 1: But it's just like we're living through this now, right,
Speaker 1: rather than looking back on this historically, and so we
Speaker 1: do want to make sure that we're looking at all
Speaker 1: the aspects of it.
Speaker 3: Absolutely. Yeah, so okay, So, but before we dive into
Speaker 3: this aspect of COVID nineteen, we have a few pieces
Speaker 3: of business to cover. So once again, first hand accounts,
Speaker 3: we are still looking for them if you are still
Speaker 3: willing to provide them. And we also want to again
Speaker 3: thank everyone, every single person who is sent in their
Speaker 3: first hand account. We really appreciate it. Another piece of
Speaker 3: business is alcohol free episodes, So again you can find
Speaker 3: episodes with the quarantiney talk edited out under the episode's
Speaker 3: tab on our website. And one last thing, we have
Speaker 3: bookshop dot org affiliate page. You can find a link
Speaker 3: on our website underneath the books tab to bookshop dot
Speaker 3: org and that'll take you to our affiliate page on
Speaker 3: bookshop dot org. And so Bookshop is once again an
Speaker 3: online bookseller that works with independent bookstores to help them
Speaker 3: sell books. And I think we have one more.
Speaker 1: Thing of the most important piece of business. It's quarantiney time.
Speaker 3: Is quarantiny time? Okay, what are we drinking this week?
Speaker 1: Quarantiney number nine stands to reason, uh huh, what's in
Speaker 1: this one?
Speaker 3: Erin this one is basically the last word? So what's
Speaker 3: in the last word? It is jin lusardo, limejuice and chartruse.
Speaker 2: Yum.
Speaker 3: Yeah, it's delicious. Actually, it is fantastic. There we go, easypsy.
Speaker 3: That's going to be a fun one to make the
Speaker 3: suberita for. I don't know what I'm gonna do. How
Speaker 3: do you substitute chartruse? What flavor is chartrus It's like
Speaker 3: a million herbs, It's like basically the KFC, a million
Speaker 3: unknown herbs and spices.
Speaker 1: Herbal tea, herbal iced tea.
Speaker 3: That could be a good. Well, we'll see, we'll make
Speaker 3: it work.
Speaker 1: Don't worry, don't worry. We'll find a way.
Speaker 3: We will. Okay, we will post the recipe for our
Speaker 3: quarantine and our non alcoholic with Suberita on our website
Speaker 3: this podcast will kill You dot com and follow along
Speaker 3: in all of our social media to see the Quarantini
Speaker 3: posts in real time.
Speaker 1: All right, So this episode, we are absolutely, without a doubt,
Speaker 1: going further outside of our wheelhouse than we've ever gone before.
Speaker 1: But like we already said, we feel it's a really
Speaker 1: important topic to address in the context of this pandemic.
Speaker 1: So we're talking today about economics. We've all seen the
Speaker 1: headlines about unemployment rates skyrocketing. Probably every single one listening
Speaker 1: knows at least one person who's out of work right now.
Speaker 3: I know I do, or are themselves out of work
Speaker 3: exactly right.
Speaker 1: It's a really scary situation for a lot of people
Speaker 1: financially right now.
Speaker 3: But like we said, we're disease ecologists an epidemiologist. We
Speaker 3: don't know anything about economics or the economy. I don't
Speaker 3: think I could give a definition of the word economy
Speaker 3: before this interview, and frankly, I'm not sure I could
Speaker 3: right now after we've already had it.
Speaker 1: But I did learn a lot.
Speaker 3: Yeah, we learned a ton. So as usual, we sought
Speaker 3: out the expertise of someone who does know what they're
Speaker 3: talking about, and we were thrilled to get to speak
Speaker 3: with Martha Gimble, who has extensive experience in economics and
Speaker 3: economic research, and we will let her introduce herself and
Speaker 3: explain how in the heck we even measure the status
Speaker 3: of the economy, whatever that means, right after this break.
Speaker 2: My name is Martha Gimble.
Speaker 4: I'm the manager of economic research at Schmidt Futures, which
Speaker 4: is a philanthropic initiative started by Eric and Wendy Schmidt.
Speaker 4: My background is in economic policy and labor market data.
Speaker 4: So in a previous life, I was the research director
Speaker 4: at indeed dot com, which I think I'm still contractually
Speaker 4: obligated to say is the world's number one job search website.
Speaker 4: And before that, I worked on the Hill at the
Speaker 4: Joint Economic Committee, which is Congress's sort of internal economic
Speaker 4: think tank, and then worked at the Council of Economic
Speaker 4: Advisors at the White House and also at the Department
Speaker 4: of Labor, where I specialized in unemployment insurance, among other things.
Speaker 1: Excellent, Well, thank you for coming on to talk to
Speaker 1: us today. We are, as we told you, not experts
Speaker 1: in the economy. So we're wondering if you could help
Speaker 1: first sort of set the stage for us a bit
Speaker 1: in terms of what the economy in the US, or
Speaker 1: if you could talk a little bit about what it
Speaker 1: looked like broadly, what did it look like in the
Speaker 1: months leading up to this pandemic, and what are some
Speaker 1: of the indicators that we use to know how the
Speaker 1: economy is doing.
Speaker 4: Yeah, so, if you look at the economy in the
Speaker 4: United States leading up to the pandemic, it was in
Speaker 4: incredibly good shape. We had record low unemployment rates. Perhaps
Speaker 4: more importantly, and I can get into why we care
Speaker 4: about this, we had the employment population ratio among what
Speaker 4: economists like to refer to as prime age, which by
Speaker 4: which we mean age twenty five to fifty four.
Speaker 2: Never let economists name anything. Workers was, you know.
Speaker 4: Continually improving. We had really fast wage growth for low
Speaker 4: wage workers in particular, which is exciting because those are
Speaker 4: the workers who most need a wage. And so what
Speaker 4: you had was an economy where workers could find work,
Speaker 4: Workers who had even given up on finding work were
Speaker 4: coming back into the labor market, and the workers who
Speaker 4: most needed a raise were getting a raise.
Speaker 1: Wow, that's good news.
Speaker 4: Yeah, that was a great time to be alive.
Speaker 3: Oh boy, So can you talk a little bit more
Speaker 3: about these indicators? Are there some that are more important
Speaker 3: than others?
Speaker 2: Yeah?
Speaker 4: So, I think the thing that often confuses non economists
Speaker 4: the most is the unemployment rate. So economists mean a
Speaker 4: very specific thing when we unemployment rate, we mean that one,
Speaker 4: you don't have a job. I think that part is obvious,
Speaker 4: but we also mean that you are actively looking for work.
Speaker 4: And so that can end up being really confusing to
Speaker 4: a lot of people, and it can also end up
Speaker 4: skewing the numbers a little bit, particularly if people feel
Speaker 4: really discouraged by the labor market. You saw this during
Speaker 4: the Great recession. And so people often say that the
Speaker 4: unemployment rate is you know, fake, or it's not counting
Speaker 4: the right thing, and you know that's not right. It's
Speaker 4: just counting a very specific definition of unemployment. That means
Speaker 4: that sometimes people are more likely to look at the
Speaker 4: employment to population ratio, and that is exactly what it
Speaker 4: sounds like. It is the share of the population age
Speaker 4: sixteen or over, because we don't really care four year
Speaker 4: olds are working with a job. Then we get into
Speaker 4: the prime age restriction and the re and we do
Speaker 4: that is that we have an aging population, and in
Speaker 4: the same way that we're okay with four year olds
Speaker 4: not working, we're also okay with eighty year olds not working.
Speaker 4: That's not really an indication of economic health. And so
Speaker 4: if you restrict to the percent of the population ages
Speaker 4: twenty five to fifty four with a job, that's been
Speaker 4: a pretty good barometer in recent years of people coming
Speaker 4: back into the labor market and finding work. I'm going
Speaker 4: to insert a brief caveat here, which is that it
Speaker 4: doesn't work particularly well if you're looking trying to compare
Speaker 4: today to say, nineteen fifty two, because if it were
Speaker 4: nineteen fifty two, the three of us probably would not
Speaker 4: be working. So you had so many women who've come
Speaker 4: into the labor market, which means that the percentage of
Speaker 4: the population with a job you would just expect to
Speaker 4: have gone up. So you can't do historical comparisons in
Speaker 4: the same way going way back.
Speaker 2: With that number.
Speaker 4: But if you're looking at say now versus two thousand,
Speaker 4: it's less of a concern.
Speaker 3: It's very interesting, yeah, yeah.
Speaker 1: And so when you look at the population overall with
Speaker 1: a job, does this mean sort of any type of
Speaker 1: employment even if it's part time employment or anything like that.
Speaker 4: Yes, and this is another incredibly important indicator that we
Speaker 4: look at. So there is something that the Bureau of
Speaker 4: Labor Statistics calls part time for economic reasons, which is
Speaker 4: a very fancy way of saying you're part time, but
Speaker 4: you don't want to be. So there's the rate of part.
Speaker 2: Time work overall.
Speaker 4: But there are plenty of people who work part time
Speaker 4: and that works for them, and we're good with that. Like,
Speaker 4: if you want to work twenty hours a week and
Speaker 4: you have twenty hours, great, we are on board. So
Speaker 4: part time for economic reasons is the share of the
Speaker 4: labor force. And by the way, when I say labor force,
Speaker 4: I mean people who are either employed or unemployed who
Speaker 4: are working part time but would prefer full time work.
Speaker 3: Okay, gotcha, gotcha? Okay. So moving on from this beautiful
Speaker 3: image of strong economy and growth, growth, growth, that kind
Speaker 3: of has changed, right and in the past month or
Speaker 3: several months. So could you kind of take us through
Speaker 3: a timeline of the economic impact that COVID nineteen has
Speaker 3: had so far, starting with like, when what were the
Speaker 3: first signs that we saw something is wrong or that
Speaker 3: this pandemic is going to have a major effect, and
Speaker 3: were there certain industries that felt the impacts of the
Speaker 3: pandemic first, and then maybe kind of bring us up
Speaker 3: to where we stand right now as of April fourteenth
Speaker 3: at three pm Eastern time.
Speaker 4: So I'm going to start off with one caveat before
Speaker 4: I dive into your question, which is that we were
Speaker 4: in this amazing place of growth, growth, growth, and also
Speaker 4: we had just been coming back from the great procession
Speaker 4: we had been dealing with the recovery in the mid
Speaker 4: two thousands. And the reason that all that is important
Speaker 4: is that there are you know, plenty of economic indicators
Speaker 4: going into this that weren't even back to where they
Speaker 4: were in the late nineteen nineties early two thousands, which
Speaker 4: is the last time that we think of the economy
Speaker 4: as being you know, quote unquote really strong. So it's
Speaker 4: important to emphasize that the economy was doing good, but
Speaker 4: not as well as it could have been, and so
Speaker 4: we lost out on all this potential when this happened,
Speaker 4: which is really sad. So let's start with the timeline
Speaker 4: of what happened. In late February early March, we were
Speaker 4: starting to hear some you know, rumblings about what these
Speaker 4: numbers were going to look like, and the number of
Speaker 4: people who were losing their jobs, who were losing hours,
Speaker 4: where people weren't making reservations at restaurants anymore. Open Table
Speaker 4: released some data that was very scary about that in particular,
Speaker 4: and you know the issue with labor market data is
Speaker 4: that it often lags and it's incomplete. So the first
Speaker 4: data that we got was in mid March about unemployment
Speaker 4: insurance claims, and that spiked from where it had been,
Speaker 4: which was in the low two hundreds, and it had
Speaker 4: been there for a while and that was very low,
Speaker 4: which is both good and bad, and we can get
Speaker 4: into that later, but it spiked into the high two hundreds,
Speaker 4: so still not you know, historically at the levels say
Speaker 4: that you saw in the Great Recession. But was particularly
Speaker 4: scary about that was the speed at which it was happening, right,
Speaker 4: So we saw a jump of about a third in
Speaker 4: a week, and the highest it ever got during the
Speaker 4: Great Recession of like a one week jump was fourteen percent,
Speaker 4: So that was very scary. Of course, the week after
Speaker 4: that was even scarier, where it jumped up to multi millions,
Speaker 4: and then the week after that into more than six million.
Speaker 4: And the week after that stayed at more than six million.
Speaker 4: And so what you've seen is this, I mean, don't
Speaker 4: know hell else to put it except insane number of
Speaker 4: people losing their jobs in an incredibly short timeframe. And
Speaker 4: so it's this real whiplash. We also got what is
Speaker 4: referred to as the Employment Situation, which the Bureau of
Speaker 4: Libor Statistics releases every month. So you know, if listeners know,
Speaker 4: like they look up their phone and they get a
Speaker 4: news alert that says the unemployment rate was x percent
Speaker 4: and we added x number of jobs, that's the employment situation.
Speaker 3: A lot of.
Speaker 4: Predictors hadn't expected the Employment Situation report to show that
Speaker 4: much because of when the data was gathered, and so
Speaker 4: this is this kind of technical thing, but you know,
Speaker 4: it says that this is the report for the month
Speaker 4: of March, but of course the data's not gathered March
Speaker 4: first to March thirty first. It's gathered at a specific point,
Speaker 4: and it's gathered around the week of the twelfth, which
Speaker 4: was a little bit before it seemed like things were
Speaker 4: really hitting the fan, and so people like me thought, oh, well,
Speaker 4: like maybe it won't be that bad, and it was bad.
Speaker 4: We lost seven hundred thousand jobs, which, of course, compared
Speaker 4: to the multi millions that we then lost in the
Speaker 4: next few weeks, now looks like a cake walk. But
Speaker 4: I think it gets to this point of things were
Speaker 4: bad even before we thought they were bad. The unemployment
Speaker 4: rate jumped up quite a bit. The part time for
Speaker 4: economic reasons rate that we were talking about earlier also jumped.
Speaker 2: And there's a.
Speaker 4: Couple of things that I think were really scary about
Speaker 4: that report, not just that it happened harder and faster
Speaker 4: than we were expecting.
Speaker 2: One is where the.
Speaker 4: Job losses were, so they were almost entirely in leisure,
Speaker 4: in hospitality, particularly food and service drinking places, which I
Speaker 4: think makes sense. The other place that we saw a
Speaker 4: lot of job losses was what's in ambulatory health care services.
Speaker 4: I told you guys that economists should never be allowed
Speaker 4: to name anything, but think of that as like doctors' offices,
Speaker 4: dentists offices, home health care aids. You know, people talked
Speaker 4: about healthcare is being a safe place going into this pandemic,
Speaker 4: but of course that's not true for all types of
Speaker 4: healthcare jobs. And if you're, for instance, a physical therapist,
Speaker 4: it's really hard to do your job right now. And
Speaker 4: so what's scary about that is that we lost seven
Speaker 4: hundred thousand jobs, and that was truly just the beginning,
Speaker 4: right Like that was just these you know, we're not
Speaker 4: seeing these follow on effects in you know, let's say
Speaker 4: accountants who could do their work from home, but their
Speaker 4: services are no longer needed, so we're you know, that's
Speaker 4: still starting to show up in the data. The most
Speaker 4: depressing statistic in the report to me was what BLS,
Speaker 4: the bure of liber Statistics. BLS identified as what they
Speaker 4: considered to be a survey error, and so they had
Speaker 4: specifically said to people, if your employer has sent you
Speaker 4: home because you can't work, you are designated as unemployed,
Speaker 4: as but on temporary layoff. And people didn't answer the
Speaker 4: question that way.
Speaker 2: There was a big spike.
Speaker 4: In people identifying themselves as employed but absent from work.
Speaker 4: And it could be that there's some percent of them
Speaker 4: who really were employed but say we're in quarantine or
Speaker 4: something like that. But the spike was big enough that
Speaker 4: BLS thinks that people answered the question wrong. And I
Speaker 4: think that this gets at this, I mean, just hugely
Speaker 4: depressing psychology of this, right of you have people who've
Speaker 4: been told by employers like we're furloughing you, we're sending
Speaker 4: you home for a couple of weeks, but our intention
Speaker 4: is to hire you back, and workers are relying on that,
Speaker 4: but we don't actually know that employers will be able
Speaker 4: to hire people back. We don't even know that some
Speaker 4: of those employers will still exist. And so you have
Speaker 4: this big group of people who are telling government survey
Speaker 4: people that their job is still there for them, and
Speaker 4: in fact, that job may not be there for them
Speaker 4: at the end of this. So we'll see how that
Speaker 4: number evolves. But that was the number that sort of
Speaker 4: I found most depressing end up setting.
Speaker 3: Yeah, and that's where we are. Oh yeah, that is
Speaker 3: depressing and upsetting.
Speaker 1: Yeah, yeah, And that kind of actually gets into the
Speaker 1: next question that we had, and that is looking at
Speaker 1: sort of the difference in impact that this is having
Speaker 1: on employers versus employees, and sort of the difference in
Speaker 1: impact that these changes and this sort of i mean,
Speaker 1: this global pandemic is having on small businesses versus large
Speaker 1: corporations versus the individual consumer and employee. So could you
Speaker 1: talk a little bit about those differences that we're seeing
Speaker 1: in terms of impact.
Speaker 4: Yeah, I mean I think the answer is unless you're
Speaker 4: like Chlorox or Zoom, no one's doing that well, right.
Speaker 4: I mean, it's just it's really hard. A huge amount
Speaker 4: of consumer spending has just been sucked out of the economy.
Speaker 2: I mean, you can look at me.
Speaker 4: I am very lucky.
Speaker 2: I still have a job. I am not spending money
Speaker 2: like I.
Speaker 4: Used to because I can't. I would love to go
Speaker 4: get my haircut, I would love to go out to dinner,
Speaker 4: but I literally cannot spend that money. There's a group
Speaker 4: of us on Twitter that it's affectionately referred to as
Speaker 4: econ Twitter, which is basically a bunch of economists getting
Speaker 4: very nerdy about economics on Twitter. And someone asked this
Speaker 4: question of what are policies that you support now that
Speaker 4: you wouldn't have supported a couple of months ago, And
Speaker 4: someone somewhat sarcastically responded to everything, but it is really true.
Speaker 2: Right.
Speaker 4: So you've seen conservative economists saying get money to individuals
Speaker 4: and workers, do it yesterday, write them direct checks like
Speaker 4: this is a nightmare. You've seen more liberal economists saying
Speaker 4: save businesses or these workers won't have jobs. Get to
Speaker 4: get back to like, get them money, get them yesterday,
Speaker 4: and you know, there's actually been pretty fair amount of
Speaker 4: agreement among economists.
Speaker 2: You know, there's disagreement on the.
Speaker 4: Edges we always love to argue, but we all agree
Speaker 4: that workers need direct supports and businesses also need direct supports.
Speaker 4: This isn't something that frankly, we necessarily would have expected
Speaker 4: a lot of people to plan for, you know, saying
Speaker 4: to a restaurant, well, why didn't you plan for a
Speaker 4: situation in which you couldn't open your doors for six
Speaker 4: to twelve to eighteen months, Like, that's just we wouldn't
Speaker 4: ever have expected them to plan for that. And so
Speaker 4: we really are in the situation where we both need
Speaker 4: to be supporting workers so that they can survive and
Speaker 4: stay home and buy groceries, and also supporting businesses so
Speaker 4: that workers have a place to go back to. If
Speaker 4: you're not dealing with both sides of this, it's kind
Speaker 4: of scary to think about what the economy could look
Speaker 4: like on the other end of this.
Speaker 3: Yeah, So one of the questions that like, and I
Speaker 3: see headlines and discussions of oh, the stock market is this,
Speaker 3: or the stock market is that, and this is like
Speaker 3: a complete like, obviously I know nothing about this the
Speaker 3: stock market and the economy. What does it mean to
Speaker 3: the average human being? I guess, like to the average
Speaker 3: person in the US, when the stock market increases or
Speaker 3: when it decreases, does it mean anything?
Speaker 1: No?
Speaker 3: I knew.
Speaker 1: It makes me feel better.
Speaker 3: I knew it all along.
Speaker 4: The stock market is not the economy. About fifty percent
Speaker 4: of American households, I always read the exact number, but
Speaker 4: it's something like that, don't hold stock, and you know.
Speaker 4: I think one thing that can be particularly frustrating to
Speaker 4: people is you'll often see headlines that say things like,
Speaker 4: you know, six point six million Americans filed for unemployment,
Speaker 4: the stock market rose by x percent, and everyone's like,
Speaker 4: what is going on? In that particular case, the stock
Speaker 4: market had already priced in that millions of Americans were
Speaker 4: going to file for unemployment. They already knew that was
Speaker 4: going to happen. At the same time, or around the
Speaker 4: same time, the FED announced a huge injection of money
Speaker 4: into the markets, And so what the stock market was
Speaker 4: responding to was not the unemployment insurance claims, which it
Speaker 4: already priced in. It already knew it was going to
Speaker 4: be millions of people who had lost their jobs.
Speaker 2: But this new good.
Speaker 4: Information that the Federal Reserve was riding in on its
Speaker 4: white horse to help that. Being said, you know, the
Speaker 4: stock market is made of people. That sounds like I'm
Speaker 4: talking about you know, smiling green but people. And the
Speaker 4: question is do a bunch of people know what's going
Speaker 4: to happen over the next six months? And if you
Speaker 4: think that no one really knows what's going to happen
Speaker 4: over the next six months, you know, the stock market
Speaker 4: doesn't really know either, which is part of the reason
Speaker 4: why you've seen so much volatility there. You know, in
Speaker 4: recent weeks, I've often compared the stock market to just
Speaker 4: like the stock market, like many of us, right now
Speaker 4: is just like a cranky toddler who needs a nap
Speaker 4: and a snack. And it does and it got a
Speaker 4: snack from the Fed and it was very happy about that.
Speaker 4: But it's just not gonna settle down for a while
Speaker 4: until it's a lot clearer what's going to happen.
Speaker 3: Mm hmm, yeah, makes sense. So this right now is
Speaker 3: being what we're going through now is being termed as
Speaker 3: a global recession, right, Like, is that is that accurate?
Speaker 1: Yeah?
Speaker 4: I mean it's it's interesting.
Speaker 3: Right.
Speaker 4: So economists have like very technical definitions of a recession,
Speaker 4: and technically we haven't hit those definitions of a recession yet,
Speaker 4: and I think that it tells you a lot that
Speaker 4: economists are not waiting for those indicators, are just like, no, no,
Speaker 4: this is a recession.
Speaker 2: We're in it. We're not questioning. This is not a drill.
Speaker 2: This is not a drill.
Speaker 4: I'm going to anticipate a question from some of the listeners,
Speaker 4: which is is it a recession or a depression? So
Speaker 4: depressions are interesting because there isn't just like a specific
Speaker 4: definition of a depression. A depression is a period of
Speaker 4: high unemployment that goes on for a long period of time.
Speaker 4: We are at a high period of unemployment, so we
Speaker 4: have already lost more jobs than the total number of
Speaker 4: people who are unemployed at the height of the Great Recession.
Speaker 4: Like we are like, we're we're like, we are at
Speaker 4: a high level of unemployment. We are into double digit unemployment.
Speaker 4: The only question is how far we go. That then
Speaker 4: raises the question of how long we stay in this,
Speaker 4: And that's a really hard question to answer, and I
Speaker 4: know people really want answers on that.
Speaker 3: And so do I.
Speaker 4: The problem is is that it depends on the actions
Speaker 4: that policymakers take, and it also depends on the public
Speaker 4: health prognosis. Right, So if by some miracle, someone pops
Speaker 4: up tomorrow and says, I have a vaccine. We've you know,
Speaker 4: been secretly testing it on humans for all this time,
Speaker 4: and we're totally good to go, and I've manufactured billions
Speaker 4: of doses and we're going to roll it out no problem,
Speaker 4: then we'd come back right like then it would be okay.
Speaker 4: The problem is the longer that this goes on for,
Speaker 4: the more you have what economists refer to as scarring.
Speaker 4: People run out of savings, they haven't worked in a while,
Speaker 4: and so their connections to help them find jobs go away.
Speaker 4: The businesses that they had connections to may have gone
Speaker 4: out of business. And so the longer this goes on for,
Speaker 4: the harder it is to come back from. And this,
Speaker 4: you know, it's not comforting, but it's really an open
Speaker 4: question at this point, and no one really has the answer.
Speaker 2: It's really hard.
Speaker 3: Yeah. One of the things that I've been so curious
Speaker 3: about is comparing this to the nineteen eighteen influenza pandemic,
Speaker 3: which is the closest thing that I can think of
Speaker 3: in terms of like, well, a pandemic, that global pandemic
Speaker 3: that has led to essentially like the shuddering of a
Speaker 3: lot of things. But like, to my very basic knowledge,
Speaker 3: what we were always taught was like, oh, the Roaring twenties,
Speaker 3: everything was great and then there was a great depress
Speaker 3: So like, was there a huge economic impact of the
Speaker 3: nineteen eighteen influenza? Was it short term? And then like
Speaker 3: recovery or like what what are some of the differences
Speaker 3: or do you think are the key differences between what
Speaker 3: we're going through now and what happened there.
Speaker 4: Yeah, so there's a couple of key differences. So the
Speaker 4: first answer to your question is with the usual caveats
Speaker 4: about historic economic data and that we're guessing et cetera,
Speaker 4: et cetera, et cetera. Our best guess is that GDP
Speaker 4: dropped by about six percent because of this pandemic. Now,
Speaker 4: the thing we have to keep in mind is that,
Speaker 4: and stick with me here, nineteen eighteen is not twenty twenty,
Speaker 4: and there are some minor differences. For one thing, there
Speaker 4: was a war in nineteen eighteen, and that, you know,
Speaker 4: makes a big difference on mobilization of resources and ability
Speaker 4: to come back from things, you know.
Speaker 2: The other things.
Speaker 4: It's just that our economy is really different. So if
Speaker 4: you think about nineteen eighteen, and again the usual caveats
Speaker 4: about historical economic data apply, but you know, we were
Speaker 4: much more heavily into manufacturing and we were much more
Speaker 4: heavily into agriculture. Right, So like if you're working on
Speaker 4: the family farm and there's a pandemic, you can still
Speaker 4: keep working on the family farm, right. And you may
Speaker 4: have debt, you may have issues, but there's a place
Speaker 4: for you to go and work. And people may not
Speaker 4: be buying as much of your produce, but you have
Speaker 4: a place to live and you're making your food. And
Speaker 4: please don't ask me any other questions about farming because
Speaker 4: I don't know. But you know, think about it. Now,
Speaker 4: we're a services economy. We are really reliant on consumer spending.
Speaker 4: That's what drives the US economy. And consumers aren't spending right,
Speaker 4: Like we're not going and getting haircuts, we're not going
Speaker 4: out to dinner, we're not going to the gym. We're
Speaker 4: not spending money on all of these things. And no
Speaker 4: matter how much money you give us, at a certain point,
Speaker 4: we're just not going to have, you know, once we've
Speaker 4: got rent and food and Netflix. Right now, there's just
Speaker 4: not that much else for us to spend money on,
Speaker 4: and so any attempted economic forecasting is a fool's game.
Speaker 4: That being said, you know, there was a study that
Speaker 4: came out, I believe yesterday, that was suggesting that we
Speaker 4: could get a ten percent drop in year over year
Speaker 4: GP at the end of this year, which is bigger
Speaker 4: than we saw with the nineteen eighteen flu pandemic. And
Speaker 4: I think that just reflects that we're in a different
Speaker 4: world than we were, and in some ways we're a
Speaker 4: lot better off. Right Like in nineteen eighteen, they didn't
Speaker 4: know how to treat that. We have a much better
Speaker 4: public health and healthcare system in my understanding, But you know,
Speaker 4: from an economic perspective, we're we're so much more interconnected,
Speaker 4: and we're so reliant on spending that other people are doing,
Speaker 4: and so that could really have impacts.
Speaker 3: Yeah, that makes a lot of sense.
Speaker 1: So I know you kind of touched on this a
Speaker 1: little bit already, but does it seem and I know
Speaker 1: also that you're a US economics expert, but are there
Speaker 1: any places, whether it's industries or countries, that seem to
Speaker 1: be at all resilient to this or is this sort
Speaker 1: of just everyone is equally in the toilet at this point.
Speaker 2: You know, as.
Speaker 4: Regards to countries, one of the countries that is in
Speaker 4: a really good situation right now, and stick with me
Speaker 4: on this is the United States. So we just talked
Speaker 4: about how horrible things are in the US, but it
Speaker 4: is so much better to be US than it is
Speaker 4: to be so many other countries. And one reason for
Speaker 4: that is because people really want dollars right now, like
Speaker 4: dollars are a really safe place to be. That's caused
Speaker 4: various fluctuations in the financial markets. But it also means
Speaker 4: that borrowing is really really cheap for us right now.
Speaker 4: So you know, you see the federal government talking having
Speaker 4: already allocated, you know, trillions of dollars, talking about spending
Speaker 4: even more. You haven't heard anyone, or at least any
Speaker 4: moe reputable talk about the national debt.
Speaker 2: And that's both because this is.
Speaker 4: Not the time, but also because our borrowing rates are
Speaker 4: so low it really kind of doesn't matter. And I
Speaker 4: want to be clear, like I am not an economist
Speaker 4: who thinks that government debt doesn't matter. Like I am
Speaker 4: someone who thinks that you know, long run, you have
Speaker 4: to think about how much you're borrowing and how much
Speaker 4: you're spending, et cetera. But right now it doesn't matter
Speaker 4: like spend. It give people money. And so we're actually
Speaker 4: in a pretty good situation relative to a lot of countries,
Speaker 4: which is also very scary.
Speaker 2: Within the United States.
Speaker 4: You know, I think a lot of people have gotten
Speaker 4: a bit of a shock over the past few weeks.
Speaker 4: You know, when this first started happening, there were a
Speaker 4: lot of people who really thought that the carnage was
Speaker 4: going to be controlled in services that were provided face
Speaker 4: to face, so restaurant servers, trainers, employees at gyms, haircutters.
Speaker 4: I keep coming back to haircutters, which gives you a
Speaker 4: sense of how I feel about my hair right now.
Speaker 3: Things like that.
Speaker 4: The problem is those people then stop spending, and other
Speaker 4: companies are scared to invest, and so then the question
Speaker 4: becomes not just can you do your job from home?
Speaker 4: But will people pay you to do your job from home?
Speaker 4: And that moves us away a little bit from is
Speaker 4: your job face to face? But this question of just
Speaker 4: our people going to pay for your company's work right now,
Speaker 4: So the distinction now isn't so much Are you a
Speaker 4: computer programmer versus a hairstylist, because as a computer programmer
Speaker 4: you can usually work from home. But are you a
Speaker 4: computer programmer who works for a company whose services are
Speaker 4: still needed right now as opposed to a computer programmer
Speaker 4: who works for a company whose services aren't needed as
Speaker 4: much right now?
Speaker 2: You know that I think is going to be.
Speaker 4: Really hard and more and more of a shock to
Speaker 4: people as time goes on, and it's it's really really scary,
Speaker 4: and no one knows where it's going to go next
Speaker 4: or how long this is going to go on for,
Speaker 4: and it makes it really hard for companies and people
Speaker 4: to make decisions.
Speaker 3: M Yeah, like the primary effects and the secondary effect
Speaker 3: and it just like seems to just sort of like
Speaker 3: ripple out and out and out and out to all
Speaker 3: these other industries.
Speaker 1: The longer that it lasts, just the.
Speaker 3: Big that ripple, right. Right. So one of the areas
Speaker 3: you know, specifically in the US talking about the industries
Speaker 3: or groups of people that have been heavily impacted is
Speaker 3: you know, there's been a lot of discussion about the
Speaker 3: gig economy and how much the US relies on sort
Speaker 3: of you know, low paid workers with no protection from
Speaker 3: their employers. So, you know, is our reliance in the
Speaker 3: US on these types of workers, on this type of
Speaker 3: gig economy? What are the implications that this pandemic is
Speaker 3: having for that aspect.
Speaker 4: So I do want to address this issue about the
Speaker 4: gig economy really quickly because I think it's something that
Speaker 4: sometimes people get a little confused about. So the conversation
Speaker 4: about the gig economy has in some ways outpaced the
Speaker 4: data about the gig economy. We have very bad data
Speaker 4: on the gig economy. It's not collected particularly well. The
Speaker 4: best data that we have actually suggests that it's a
Speaker 4: relatively small percent of people who do what we think
Speaker 4: of as traditional gig work.
Speaker 2: And I think one.
Speaker 4: Issue that you have is that for a lot of people,
Speaker 4: these kinds of informal or less certain work were really
Speaker 4: hidden to us before. Right. So for instance, David Will
Speaker 4: who's a professor, has talked a lot about how hotels
Speaker 4: outsourced their cleaning staffs, and so their cleaning staff wouldn't
Speaker 4: atually work directly for the hotel, but they would be
Speaker 4: contracted out. We don't see that, right, like we just
Speaker 4: see that the hotel room's been cleaned. We do see
Speaker 4: our uber driver, we do see the postmate who's coming
Speaker 4: to bring us food. And so these places that work
Speaker 4: had been much more uncertain and that people hadn't been
Speaker 4: able to rely on the traditional protections of work. I
Speaker 4: think part of the conversation just comes from it becoming
Speaker 4: more visible to a certain group of us. So with
Speaker 4: that caveat, and if people are interested in this, they
Speaker 4: can google BLS Contingent Workers Survey and there's a lot
Speaker 4: of data about that. Yes, workers in the United States
Speaker 4: have a lot fewer protections than workers in other countries.
Speaker 4: And if you think about the workers who are most
Speaker 4: vulnerable in almost every sense of the word right now,
Speaker 4: they are the ones with fewer protections. So like grocery
Speaker 4: store workers very unlikely to have paid sick leaf, very
Speaker 4: low paid, very exposed to this virus. You know. I
Speaker 4: think one thing that you're seeing right now is people
Speaker 4: really realizing how much the day to day functioning of
Speaker 4: the economy is really reliant on people who are incredibly
Speaker 4: poorly paid and work under really tough conditions and who
Speaker 4: we don't necessarily treat very well. But if they work
Speaker 4: walk off the job, the rest of us are in
Speaker 4: a lot of trouble. I think there is this question
Speaker 4: around how do we as a society think about compensating
Speaker 4: people who are doing this very poorly paid but also
Speaker 4: right now very dangerous work.
Speaker 3: Yeah, is that something that you think will change in
Speaker 3: the future.
Speaker 2: Oh, it's just.
Speaker 4: So hard to predict how these things go, which is
Speaker 4: like a theme of this entire conversation. You know, I
Speaker 4: think it's unclear. I think you've already seen a certain
Speaker 4: amount of labor activism and labor unrest among these workers.
Speaker 4: And also at the same time, these workers are incredibly vulnerable.
Speaker 2: They may not have.
Speaker 4: Savings, and more workers are becoming unemployed and need to
Speaker 4: feed their families, and so it's really unclear I think
Speaker 4: where this is all headed. But I think this is
Speaker 4: actually transitioning into this broader point, which is that right now,
Speaker 4: economic policy is public health policy, and public health policy
Speaker 4: is economic policy. So people keep saying, like, what is
Speaker 4: the number one policy that we need to save the
Speaker 4: economy right now? And the response is fix the public
Speaker 4: health crisis. Like anything else we do is just band
Speaker 4: aids on this until the public health crisis is done.
Speaker 4: At the same time, in order to fix the public
Speaker 4: health crisis, you have to make sure that the economy
Speaker 4: is functioning reasonably and that people have enough money to
Speaker 4: feed themselves and feed their families and have a place
Speaker 4: to live. You know, if people lose their homes and
Speaker 4: go into homeless shelters and can't feed their kids, well, one,
Speaker 4: they're not in a place where they can't keep the
Speaker 4: coronavirus from infecting them.
Speaker 2: Homeless shelters are bad for that.
Speaker 4: And also like they're going to leave and try to
Speaker 4: find shelter and try to find a job and be
Speaker 4: going out in the world and circulating around. And so
Speaker 4: there's been this question around some of the economic policy
Speaker 4: actions that have been taken of, like why are we
Speaker 4: paying people so much an unemployment insurance right now? Then
Speaker 4: they won't look for work. And this is a huge problem.
Speaker 4: This is the thing that ECON must refer to as
Speaker 4: moral hazard. And the thing is right now, like we
Speaker 4: don't really want people looking for work, Like we don't
Speaker 4: want people leaving their homes. We want people to stay
Speaker 4: home and sit there and stay safe. That is incredibly
Speaker 4: important right now. And so like some of these you know,
Speaker 4: traditional calculations fall by the wayside.
Speaker 1: Yeah, and so that kind of was going to be
Speaker 1: one of our next questions is are the current benefits
Speaker 1: that we have enough to keep people at home and
Speaker 1: to sort of address this public health crisis at this point.
Speaker 4: Yeah, so the changes to the unemployment insurance system are encouraging.
Speaker 4: That being said, one of the big issues that you
Speaker 4: have right now is that people can't get access to
Speaker 4: those benefits because we do not have a very good
Speaker 4: government infrastructure in this country. It's just not something we've
Speaker 4: ever really invested in. And so you look at other countries,
Speaker 4: they've invested in their social safety that's a lot more
Speaker 4: and with that comes a easy financial connection to their
Speaker 4: citizens that they can utilize at a time like this.
Speaker 4: We haven't done that, and so the unemployment insurance system
Speaker 4: right now is just breaking under the load. The systems
Speaker 4: weren't set up for this. They weren't even really ready
Speaker 4: for a regular recession, and this is not a regular recession.
Speaker 4: And so, you know, one of the things that's incredibly
Speaker 4: important for us to be thinking about moving forward is
Speaker 4: investing in the infrastructure of government and making sure that
Speaker 4: we have that and it's functioning. You know, it's not
Speaker 4: just for workers.
Speaker 2: You've seen the same.
Speaker 4: Complaints with the small business program. Paycheck Protection Program or PPB,
Speaker 4: but has also run into technical issues and also with
Speaker 4: the twelve hundred dollars checks that are supposed to be
Speaker 4: being sent out. And so you know, we haven't invested
Speaker 4: in the day to day functioning of government, and the
Speaker 4: moment when you find out that things are breaking is
Speaker 4: almost always the moment where you most need them not
Speaker 4: to break.
Speaker 3: Yeah, so I know that you said that guessing at
Speaker 3: the future is a fool's game, and so so let
Speaker 3: us ask you what's going to happen. No, I won't
Speaker 3: ask you what's going to happen, but I guess what
Speaker 3: I do want to ask is what do you think
Speaker 3: it will take to recover? And how will we know
Speaker 3: when we have recovered whatever whatever recovered means, What does
Speaker 3: that look like?
Speaker 2: Oh, that's such a good question.
Speaker 4: So one thing I want to point now is that
Speaker 4: it's not just getting back to where we were before,
Speaker 4: because you know, and this was something we were talking
Speaker 4: about earlier. Where we were going into this was a
Speaker 4: labor market that still had room to grow, and there
Speaker 4: were still people who were benefiting from the really.
Speaker 2: Tight labor market.
Speaker 4: And so you know, a full recovery doesn't just mean
Speaker 4: getting back to three point five percent unemployment. It means
Speaker 4: continuing to get all those people who were coming back
Speaker 4: into the labor market, who were getting wage increases the
Speaker 4: full benefits of that. And it's just so frustrating, right
Speaker 4: like we've had we've lost decades. I mean, it's so frustrating.
Speaker 4: You know, as far as how long is this going
Speaker 4: to take? I think this could take a really long time,
Speaker 4: and I think people have to really be emotionally prepared
Speaker 4: for that. You know, think of how long it took
Speaker 4: us to come back from the Great Recession, and that
Speaker 4: was a different situation, and that was a financial crisis,
Speaker 4: et cetera, et cetera.
Speaker 2: But this is worse in a lot of.
Speaker 4: And always really I don't know why I said a
Speaker 4: lot of ways. And recovery is not going to be tomorrow,
Speaker 4: and it's not going to be next month, and it's
Speaker 4: probably not going to be this year, and frankly, it
Speaker 4: may not even be next year. It just takes a
Speaker 4: really long time. And we also have to keep in
Speaker 4: mind that there are people for whom the impacts of
Speaker 4: this are going to stretch for years. We know that
Speaker 4: graduating into a tough economic situation impacts your earnings for
Speaker 4: a really long time. We know that losing your job
Speaker 4: impacts your earnings for a really long time, and so
Speaker 4: you know, we have to keep in mind that for
Speaker 4: a lot of people, it's not like, oh, I'll just
Speaker 4: find another job in six months and it'll all be okay.
Speaker 4: Let's just not the way it works, and so we
Speaker 4: as a society have to be prepared for that.
Speaker 1: Are there Are you seeing any innovative solutions that people
Speaker 1: are proposing or starting to implement in terms of of
Speaker 1: like social safety net, like you were saying, to help
Speaker 1: alleviate this current crisis, but also to try and put
Speaker 1: things in place to prevent something like this from happening again.
Speaker 3: We need a silver lining.
Speaker 1: Yeah, we need to end not too depressing?
Speaker 4: Is that economist anywhere? You know? I mean, I think
Speaker 4: on the federal government side, you know, it feels like
Speaker 4: it's been so slow, but they've actually moved incredibly quickly
Speaker 4: like this is. I mean, it is unprecedented the speed
Speaker 4: in which with which this happened, and is unprecedented the
Speaker 4: speed with which Congress acted. You've also seen the Federal
Speaker 4: Reserve taking unprecedented actions to shore up the economy and
Speaker 4: so you know, so far policymakers have actually been doing Okay,
Speaker 4: I like to be clear. You know, if I were
Speaker 4: in charge, are there things that I would have done differently? Like, yes, absolutely,
Speaker 4: I would have You know, we need more money for
Speaker 4: all of these programs. We need more money yesterday. We
Speaker 4: need our unemployment insurance infrastructure to work better, you know,
Speaker 4: all of these things. But the economic response has not
Speaker 4: been backed. We just need more of it. So that's
Speaker 4: my silver lining for silver lining among the commas.
Speaker 3: Silver as it gets.
Speaker 1: I don't know what color you'd call that, opalescent maybe.
Speaker 3: Yeah, yeah, shimmering in any capacity, right, It's like an
Speaker 3: oil slick though, so oh dear, oh yeah. Well well,
Speaker 3: so looking forward again, what are some positive changes you
Speaker 3: hope to see come out of this? Maybe, whether that's
Speaker 3: policy or just in terms of how you know, people
Speaker 3: think about the economy or how interconnected people are finally
Speaker 3: realizing all of these different aspects are. What are some
Speaker 3: of the positive changes you hope will come out of this?
Speaker 4: People really start investing in our own employment insurance system.
Speaker 4: This is something that a group of us have been
Speaker 4: screaming about for years, and no one ever pays attention
Speaker 4: to UI when it's not a recession, because it's not
Speaker 4: a recession, but it's incredibly important. It's a thing that
Speaker 4: people assume will be there for them when they lose
Speaker 4: their job. It often isn't, And I'm hoping people really
Speaker 4: take a good look at it and try to figure
Speaker 4: out a way to make the system work better, you know,
Speaker 4: both from a design perspective and also from a tech
Speaker 4: infrastructure perspective for people moving forward.
Speaker 2: I also think it's.
Speaker 4: Helpful that you've seen policy makers move at least by
Speaker 4: you know, US standards relatively quickly to get people the money.
Speaker 2: That they need.
Speaker 4: Should we we be moving faster? Like, yes, absolutely, And
Speaker 4: I don't want anyone to think that. I don't think that,
Speaker 4: But you know, I'm hopeful that when the next recession
Speaker 4: comes around, you know, we'll remember that one of the
Speaker 4: most efficient ways to help people who have lost their
Speaker 4: jobs or in financial stress is to give them money,
Speaker 4: which isn't that complicated. But sometimes we make things more
Speaker 4: complicated than they need to be.
Speaker 3: Yeah, yeah, this is kind of a like, pardon this
Speaker 3: silly question, but where's the money coming from? This? Is
Speaker 3: this is such a good question here. I don't get it.
Speaker 2: Yeah, we're borrowing.
Speaker 4: We're borrowing a lot of money, but we're borrowing it.
Speaker 4: It's such cheap amounts of money. Like, we are borrowing
Speaker 4: money so cheap it is practically free.
Speaker 2: Wow.
Speaker 3: So you know we have this, these twelve hundred dollars
Speaker 3: checks that are going out to some people. Is twelve
Speaker 3: hundred dollars is going to be enough to get people
Speaker 3: through these next few months, to keep the economy you know,
Speaker 3: a float or whatever. A float means no.
Speaker 4: And this is why one of the things that a
Speaker 4: lot of economists are most focused on right now is
Speaker 4: in whatever legislative package passes next, what you need is
Speaker 4: what we refer to as triggers for the help that
Speaker 4: we're giving to both individuals but also businesses. And so
Speaker 4: what we mean by that is and if people are interested,
Speaker 4: you can look up the work of Claudia som A Saahm.
Speaker 4: She's an amazing economist, but you know, she's done all
Speaker 4: of this work about how we think about using the
Speaker 4: unemployment rate to trigger on and off different programs. And
Speaker 4: this is already something we have a little bit in
Speaker 4: the unemployment insurance program. But you know this is going
Speaker 4: to be too stressful and it's not going to work
Speaker 4: well if every month or two Congress has to come
Speaker 4: back and go like, well, where are.
Speaker 2: We how do we feel about this? Where do we
Speaker 2: think we're going?
Speaker 4: Like, it's a lot easier if we say the checks
Speaker 4: will continue until the unemployment rate has hit x percent,
Speaker 4: or the checks will continue until hill you know, the
Speaker 4: number of new cases is experts, you know, whatever, we
Speaker 4: think the right set of triggers is in the situation.
Speaker 2: But you know, doing these.
Speaker 4: Kinds of one offs is just is really hard, and
Speaker 4: so putting these kinds of triggers on for you know,
Speaker 4: this kind of relief is really important.
Speaker 3: What a fantastic interview. Thank you so much, Martha for
Speaker 3: talking to us and taking so much time out of
Speaker 3: your day. We really appreciate it. We really appreciate it.
Speaker 1: Also, that was so thrilling my brother what my brother
Speaker 1: works in, like I don't know something financial.
Speaker 3: I still don't understand what he does.
Speaker 1: But he was like very jealous that we got to
Speaker 1: interview Marreth. They gimba, she's a big deal. So thank
Speaker 1: you so much for taking the time to talk to us.
Speaker 3: That was great. Yes, okay, so what have we learned? Well,
Speaker 3: Number one, I've learned a lot about how we actually
Speaker 3: measure the economy, because really I didn't know any of
Speaker 3: these things. I didn't know the metrics and what they meant.
Speaker 3: And so what we have learned from this interview is
Speaker 3: that prior to this outbreak, the US economy was really
Speaker 3: in an upswing. We were seeing growth, not just low
Speaker 3: unemployment numbers, but actual increases in wages, and that one
Speaker 3: number that Martha mentioned, the unemployment population ratio, that was improving.
Speaker 3: So basically, even though we weren't fully back to you know,
Speaker 3: pre two thousand and eight Great Recession crash numbers, the
Speaker 3: economy was really looking strong and was in a period
Speaker 3: of growth before all this happened.
Speaker 1: Absolutely. Number two, the second thing we learned is that
Speaker 1: we have lost a ton of jobs, like many, many
Speaker 1: tons of jobs. It's like hard to wrap your brain around,
Speaker 1: it really is. And it's not just in sectors that
Speaker 1: you might have expected, like the service industry and like
Speaker 1: face to face businesses, but even in things like healthcare
Speaker 1: that you might have thought were sort of safe industries
Speaker 1: in a pandemic. And because of all these job losses,
Speaker 1: and of course because we're all staying at home, and
Speaker 1: not going out and spending money. Even people who have
Speaker 1: jobs that they could in theory do at home are
Speaker 1: feeling the strain because so many companies and businesses are
Speaker 1: losing money and in some cases letting people go.
Speaker 3: Because of it.
Speaker 1: I'll also add that even for those of us who
Speaker 1: are at home and in theory still working, and Martha
Speaker 1: didn't say this specifically, but I'm almost positive that all
Speaker 1: of us are seeing massive dips in our productivity simply
Speaker 1: because of how difficult it is to focus. Whether that's
Speaker 1: because you have kids at home with no childcare, or
Speaker 1: you are ill yourself, or you have loved ones who
Speaker 1: have fallen ill that you're helping care for, or because
Speaker 1: I don't know, the world is crashing down around us
Speaker 1: and it's kind of hard to focus on your job.
Speaker 3: Absolutely number three, and this is a really scary one.
Speaker 3: I think we don't know how long this is going
Speaker 3: to last, and we don't know what businesses are going
Speaker 3: to survive. We don't necessarily know what it's going to
Speaker 3: look like on the other end of this thing, basically,
Speaker 3: And so while a lot of people may think or
Speaker 3: at least hope that their jobs are waiting for them,
Speaker 3: when this is all over. There is so much uncertainty
Speaker 3: about literally everything right now now that it's very possible
Speaker 3: that many people will be out of work not just
Speaker 3: during this pandemic but also after it ends. And so
Speaker 3: while we can't predict exactly what the overall impact of
Speaker 3: this pandemic is going to be on our economy, it's
Speaker 3: entirely possible, and some people are actually predicting that the
Speaker 3: effects are going to be much greater than what we
Speaker 3: think happened as a result of the nineteen eighteen influenza pandemic,
Speaker 3: which really is kind of the closest thing that we
Speaker 3: can compare our current situation to. Either way, this is
Speaker 3: already worse than two thousand and eight, which is pretty
Speaker 3: scary to think about, and we don't really know how
Speaker 3: long it's going to take to recover.
Speaker 1: Oh yeah, it doesn't get better. Number four. Many of
Speaker 1: the people most affected financially by this outbreak are the
Speaker 1: same people who are vulnerable in many other ways, with
Speaker 1: no sick leave, very poor or no health insurance, or
Speaker 1: in some cases still work but in incredibly unsafe conditions
Speaker 1: right now. So, right now, economic policy is public health policy.
Speaker 3: I might always argue that's like one hundred percent always
Speaker 3: the case.
Speaker 1: But all economists even agree on this right now, which
Speaker 1: apparently is not a thing that happens very often to
Speaker 1: get economists to agree on things. So the most important
Speaker 1: thing that we have to do in the US and
Speaker 1: across the globe right now is address the public health
Speaker 1: crisis at hand and get the epidemic itself under control
Speaker 1: to try and minimize the economic damage.
Speaker 3: Yeah, totally, yep. Number five. The US especially needs to
Speaker 3: invest in our social safety nets, including our unemployment insurance program,
Speaker 3: if we hope to have any chance at addressing this
Speaker 3: current crisis and preventing issues like this in the future. Snaps, snaps.
Speaker 3: While the economic impacts of this pandemic are just as
Speaker 3: global as the health impacts, like we talked about in
Speaker 3: the Disparities episode, not everywhere is going to feel this
Speaker 3: impact equally. We learned that the US is in a
Speaker 3: pretty good position financially to be able to borrow lots
Speaker 3: of money at low rates, but our lack of government
Speaker 3: infrastructure with regards to social programs makes it difficult to
Speaker 3: actually get that money to where it needs to be,
Speaker 3: basically in the hands of people who need it, and
Speaker 3: in countries that have stronger social programs in place, it's
Speaker 3: easier to actually mobilize and get people the help that
Speaker 3: they need at a time like this. And so I
Speaker 3: think that this is like this episode was hard because
Speaker 3: it was depressing, yes, and seemed very scary, very However,
Speaker 3: I think that one of the silver linings, even though
Speaker 3: in the interview I don't think we had any strong
Speaker 3: silver linings. But you know, one of the things that
Speaker 3: I think we can take away from this is that
Speaker 3: this is going to be used as a teachable moment,
Speaker 3: a massive global teachable moment. Public health is economic health.
Speaker 1: Yeah, I have a very small silver lining.
Speaker 3: What's that I don't have to.
Speaker 1: Worry about the stock market or ever learn what the
Speaker 1: Dow really means.
Speaker 3: I love that part. I was like I knew it,
Speaker 3: Like I felt so validated in my life. Yeah, I
Speaker 3: don't understand. I still don't understand what the stock market does,
Speaker 3: but guess what.
Speaker 1: I don't have to doesn't matter to me.
Speaker 3: Someone's going to write it and be like, actually, it'll
Speaker 3: be my dad.
Speaker 1: Actually that he'll text me as soon as this episode
Speaker 1: comes out and he'll be like, let me, I thought
Speaker 1: I've explained to you.
Speaker 3: Aaron I'll be like sorry dad, oh boy. Yeah. Anyways, anyways,
Speaker 3: so thanks again to Martha for giving us that fantastic interview.
Speaker 1: Yeah, it was really great to talk to you, and
Speaker 1: we really enjoyed it.
Speaker 3: We did. I was gonna say, we owe you a
Speaker 3: haircut when this is all.
Speaker 1: Over, totally, we'll venmo you for a haircut.
Speaker 3: Yeah.
Speaker 1: Thank you also to Bloodmobile for providing the music for
Speaker 1: this episode in all of our episodes.
Speaker 3: And thank you to you listeners for sticking with us
Speaker 3: through these tough times.
Speaker 1: Tough times. Yeah, hope you hope you can find a
Speaker 1: silver lining of your own.
Speaker 3: Let us know. Yeah, actually that would be great, That
Speaker 3: would be great.
Speaker 1: Can you tell us what your silver linings are? We
Speaker 1: need them, please, we all need them.
Speaker 3: We all need that. We should do a silver linings episode.
Speaker 1: Okay, I like that.
Speaker 3: Actually all right in the works. Well until next time,
Speaker 3: wash your hands.
Speaker 1: You fill the animals. M