Coronavirus recession shows fangs as retail sales dive; 42% of layoffs may be permanent
The deluge of bad numbers since the coronavirus struck is immense and growing. The tally that matters most—the body count from the virus—is headed for 90,000 by the end of the weekend and who knows where by the end of the month, to say nothing of the end of the year. These frightful losses are punctuated with images of refrigerated trucks overflowing with bodies, mass graves, funerals sparse with mourners, and the French-based Doctors Without Borders having to send a team into the Navajo Nation because the Indian Health Service’s rotten history of inadequate funding and staffing means healthcare workers on the largest Native reservation have been overwhelmed by virus cases and deaths.
Then there is the steady flow of unprecedentedly dreadful economic statistics.
First are the layoffs—36.5 million of them if you count by the number of people who have made new claims for unemployment insurance benefits. Add to those the millions of others who have lost their jobs but haven’t applied for benefits or who are not counted as unemployed because of the government’s definition of having “left the labor force.” All told, it would be optimistic to assume that the current layoff count is less than 44 million.
This week we also got the news about April retail sales—a plunge of 16.4%, double the drop in March, which was the worst since 1992, according to the Commerce Department. Plus the Federal Reserve reported that factory output fell 11.2% in April, the worst result since that measurement started being taken 101 years ago.
Then, in a 39-page report that got far too little media attention, the National Bureau of Economic Research estimated that 42% of job losses will be permanent:
Even if medical advances or natural forces bring an early resolution to the crisis, many pandemic-induced shifts in consumer demand and business practices will persist. Thus, much of the near-term reallocative impact of the pandemic will also persist, as indicated by our forward-looking reallocation measures. Drawing on our survey evidence and historical evidence of how layoffs relate to recalls, we estimate that 42 percent of recent pandemic-induced layoffs will result in permanent job loss. If the pandemic and partial economic shutdown linger for many months, or if pandemics with serious health consequences and high mortality rates become a recurring phenomenon, there will be profound, long-term consequences for the reallocation of jobs, workers and capital across firms and locations
This handful of numbers just covers the United States. Grim news about the immediate situation and scores of analysts’ grim outlooks are rife around the planet.
For instance, here’s the executive director of the U.N. World Food Program, David Beasley, addressing the Security Council at a virtual session three weeks ago:
So today, with COVID-19, I want to stress that we are not only facing a global health pandemic but also a global humanitarian catastrophe. Millions of civilians living in conflict-scarred nations, including many women and children, face being pushed to the brink of starvation, with the spectre of famine a very real and dangerous possibility.
This sounds truly shocking but let me give you the numbers: 821 million people go to bed hungry every night all over the world, chronically hungry, and as the new Global Report on Food Crisis published today shows, there are a further 135 million people facing crisis levels of hunger or worse. That means 135 million people on earth are marching towards the brink of starvation. But now the World Food Programme analysis shows that, due to the Coronavirus, an additional 130 million people could be pushed to the brink of starvation by the end of 2020. That’s a total of 265 million people.
Beasley adds that we could be looking at famine in three dozen countries.
There’s another number to consider as well. A month ago, in a New York Times op-ed, epidemiologists Britta L. Jewell and Nicholas P. Jewell wrote that if the United States had begun its social distancing just two weeks earlier than it did, the death toll here would have been far less:
On March 16, the White House issued initial social distancing guidelines, including closing schools and avoiding groups of more than 10. But an estimated 90 percent of the cumulative deaths in the United States from Covid-19, at least from the first wave of the epidemic, might have been prevented by putting social distancing policies into effect two weeks earlier, on March 2, when there were only 11 deaths in the entire country. The effect would have been substantial had the policies been imposed even one week earlier, on March 9, resulting in approximately a 60 percent reduction in deaths.
Could have. Should have. Didn’t. That’s pretty much a detailed account of the Trump regime’s entire response to the pandemic, as anybody knows who has followed the news except on Foxaganda.
Now, as we move ever closer from the Feb. 26 Trump assertion of “close to zero” virus cases to the five zeros of 100,000 deaths, the Republicans’ biggest worries besides their election chances seem to be the elimination of corporate liability if businesses reopen and workers get sick, and their view that unemployment benefits are too generous and will lead to millions sitting on their sofas eating bon-bons and binge-watching Netflix forever. The GOP is always concerned an extra nickel or two will enable layabouts among Americans in the lower economic tiers, but there’s never any concern about giant bonuses for top executives at companies with weak ledgers.
Instead of continuing to push their four-decade-long agenda of cutting taxes, cutting regulations, and cutting benefits, Republicans might at least give us a little hint about what they plan to do to replace the 42% of lost jobs that may never come back.
(Crossposted with DailyKos. Image by Sodahead)