Last week, a whopping 3.3. million Americans applied for unemployment as businesses struggling from the coronavirus fallout begin laying off workers.
The number is staggering. It’s more than quadruple the previous record set in 1982. But Treasury Secretary Steve Mnuchin doesn’t think there’s much to see here, calling the situation “irrelevant” and arguing that people will be fine again and the pain right now is temporary.
“I just think these numbers right now are not relevant, and you know, whether they’re bigger or smaller in the short term,” Steve Mnuchin said in a CNBC interview Thursday morning, according to Huffington Post. “I mean, obviously, there are people who have jobless claims. And again, the good thing about this bill is the president is protecting those people.”
“So you know, now with these plans, small businesses hopefully will be able to hire back a lot of those people,” he added. “Last week, they didn’t know if they had protections. They didn’t have any cash. They had no choice. Now with this bill passed by Congress, there are protections.”
You read that right. Mnuchin doesn’t want people to pay too much attention to the 3.3 million people who filed unemployment benefits last week.
But the coronavirus crash isn’t a simple shortage of cash. It’s a crisis on several different economic fronts that will require months, if not years, of aggressive government action to combat.
Global supply chains are breaking down as companies that manufacture goods in other countries find themselves unable to access factories and materials that they have relied upon for years. The collapse in U.S. consumer spending won’t simply return to normal.
The legislation’s protections for people who are laid off or struggling to pay the bills are simply too paltry to restore the plunge in purchasing power from unprecedented layoffs, not to mention the fear that most families are now experiencing.
Every household in America will be pinching their pennies for the foreseeable future, and that loss of spending translates into a loss of revenue for businesses, and lower payrolls. The loss of American purchasing power will resonate both at home and abroad. This may well culminate in a shock to the financial system akin to the meltdown of 2008.
But it’s worse. Thursday’s unemployment number is likely undercounting how many people are without work as well. Some people who have tried to apply for unemployment benefits have reported phone lines and websites frozen and jammed up by the crush of applicants. And people who are self-employed, undocumented, students or gig workers are ineligible to apply and therefore not counted.
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