The economic fallout from the coronavirus response has happened quickly, but its effects will be long-lasting. When Congress reconvenes in May 2020 to debate the next round of funding priorities, it must employ strategies that work in tandem to get economic relief to the wide range of people who need it: the millions who have lost jobs, small businesses that have been shuttered, states and cities facing budget shortfalls, and communities that are facing disproportionate health burdens. These policy approaches should be designed to provide significant support right away; effectively address the public health crisis; mitigate the economic harm to people; and begin to build towards an eventual equitable recovery.
Once COVID-19 is reasonably contained and many people go back to work, some businesses will remain permanently closed. There will be longer-term employment consequences for employees of those businesses and for those graduating or looking for new employment. Recent projections from the Congressional Budget Office (CBO) forecast a long overhang of the economic crisis, including a 10 percent unemployment rate 18 months from now. Historical patterns would suggest that in such an environment, Black workers could face unemployment rates as high as 20 percent. With possibly months of significantly elevated unemployment, potential additional waves of closures during intense social distancing, and slow rehiring, that scenario will clearly still require ongoing extended unemployment insurance (UI) benefits and direct cash payments for individuals and families. Continue reading.