Accelerating the recovery is needed
Process could be a long, slow one
As the nation began the process of “reopening” slowly but, we all hope, safely, there was encouraging news on the economic front. About two weeks ago, nearly 25 million Americans were receiving unemployment benefits, the Labor Department reported. By the beginning of June, the number had decreased to about 21.5 million.
We are making progress, then. How long before we are back to “normal?”
Not for a long, long time, possibly. Along with the encouraging report, the Labor Department had some disquieting numbers.
Though the general trend was toward more people going back to work, about 1.9 million filed initial requests for unemployment benefits during the last week of May. What happened to them?
A substantial number may have been employed by businesses suffering from a lag in recovery. But some also may have been working for companies that were forced to slash workforces at the height of the COVID-19 epidemic — and have learned they can operate with fewer people than they had on payrolls three months ago.
And undoubtedly, the business contraction in some industries will persist for many months, perhaps years. Our complex economy is not something that can be switched off, then switched back on at full power immediately.
COVID-19’s impact, then, will not be a wound that heals quickly but, rather, a handicap requiring a sustained period of rehabilitation.
That will be a challenge for local economic developers as well as state and federal economic policymakers. For example, how will the Federal Reserve address recovery? Will interest rates be held down for a long period of time? Or, on Capitol Hill, will Congress target recovery assistance to specific businesses in need of help, or, instead, continue to use a shotgun approach?
Clearly, for various reasons, the economic “normal” we recall from just a few months ago will not be coming back soon. Accelerating the process needs to be a key consideration in state capitals and Washington.