Podcast Summary
The State of Employment amid the Covid-19 Pandemic: While some jobs have been added to the market, the unemployment rate remains high, particularly among lower-paid workers in retail and restaurants. Automation and lack of demand may cause some jobs to be lost permanently. Economic policies like Universal Basic Income may offer solutions.
The Covid-19 pandemic caused a massive job loss, with the unemployment rate estimated at around 19-20%. However, in May 2020, the US Department of Labor reported the addition of 2.5 million jobs, contrary to the predicted loss of 8 million jobs. Regardless, the unemployment rate remains high as many lost jobs, particularly in retail and restaurants, may not return soon. High-income employees and middle managers may suffer job loss, but lower-paying jobs may be permanently lost due to automation or lack of demand. Employment policies like 'Ban the Box' meant to help low-income employees may backfire, causing further discrimination. Making good economic policy is challenging, especially during a crisis. Andrew Yang's proposal of a Universal Basic Income of $1,000 per month for every American adult is one such policy solution worth considering.
The Urgency of Universal Basic Income During the Pandemic: Andrew Yang advocates for widespread adoption of universal basic income to prevent further job losses and provide immediate financial relief, while also investing in infrastructure and healthcare to boost the economy.
The pandemic has accelerated the automation of several jobs, leading to hundreds of thousands of job losses globally. Andrew Yang stresses the urgency of adopting universal basic income on a much larger scale than what he championed before the pandemic. He believes that we need to get money into people’s hands immediately to prevent the unimaginable from happening, as we're already seeing long food lines and material scarcity in communities around the country, which will only get worse. Instead of bailing out the banks and expecting them to lend money to small businesses, the government should adopt an everything-on-the-table approach. This includes putting money into people’s hands, state governments, hospitals, nonprofits, schools, and healthcare organizations. The government should also employ people directly for contact tracing and infrastructure jobs to prevent individuals from leaving the workforce entirely.
A Call for a New Marshall Plan to Rebuild America: The government should focus on families' well-being factors, not just GDP and stock market prices, by investing in a new Marshall Plan-scale initiative to create a path forward for millions of Americans and avoid a long-lasting depression. Accepting the reality of job losses is crucial to finding solutions.
To avoid a long-lasting depression, the government needs to do more and become the payer of first resort. A new Marshall Plan-scale initiative is necessary to rebuild the country and create a path forward for millions of Americans. The key change needed is to measure the economy and progress by how families are doing, focusing on well-being factors such as health, mental health, kids' success rates, and environmental sustainability rather than GDP and stock market prices. The scars from this historic crisis will be long and deep, and millions of jobs are gone for good. Accepting this reality is crucial to moving forward and finding solutions.
Andrew Yang's vision for a modern economy with Universal Basic Income: Andrew Yang believes that implementing Universal Basic Income can improve society's well-being, as demonstrated by successful pilot programs in Hudson and Finland, and a Y Combinator research trial. He is advocating for emergency cash relief to Americans during the pandemic.
Andrew Yang sees the need for an economy modernization that focuses on the wellbeing of society. The implementation of a universal basic income (U.B.I.) can bring positive changes in people's lives, as shown by the pilot programs in Hudson, New York, and Finland. The Y Combinator research trial also shows great potential for U.B.I. success. Yang has been involved in conversations with a dozen members of Congress regarding an emergency cash relief bill that would provide $2,000 a month for every American until pre-pandemic levels of employment are regained. The cost can be covered by redirecting 20 percent of G, echoing past wartime circumstances.
Andrew Yang's Plan for Direct Cash Payments to All Americans: Andrew Yang proposes giving money to all Americans to prevent an economic crisis, even if they don't need it. This approach has bipartisan support, but may face political obstacles. Other solutions are also being explored.
Andrew Yang advocates for direct cash payments to all Americans, regardless of income, to prevent another Great Depression. The money would come from the same place as the $1.5 trillion in corporate tax cuts. Yang believes in being overinclusive rather than underinclusive, with the option to claw back the money if it's not needed. He also notes that many Americans who had good years in 2018 are now in desperate circumstances. Despite bipartisan support for this approach among the majority of Americans, the current political climate may hinder its implementation. However, Abigail Wozniak, a research economist at the Federal Reserve Bank of Minneapolis, discusses other options to prevent a pandemic-induced job apocalypse from turning into another Great Depression.
Balancing Financial Aid Distribution During a Pandemic: The government needs to find a balance between providing financial aid to those in need during a pandemic and preventing unintended consequences, such as disincentivizing people from returning to work or exacerbating unemployment.
The government had a 'don't target' approach towards aid distribution during the Covid-19 pandemic, which led to unconditional financial support for those in need. This conflicts with the 'everybody, freeze' instinct to maintain the current economy and prevent the spread of the virus. The generous unemployment benefits may have unintentionally incentivized people to stay out of work, exacerbating the unemployment issue. Economists predict that people respond to incentives, and it's challenging to leave money on the table. The government needs to strike the right balance between preserving the current economy and supporting businesses to recover quickly while facing a potential fundamental shift in our economy.
Strategies for Reducing Permanent Job Loss During COVID-19: Policy choices like work-sharing programs can keep workers employed while the economy recovers. Re-employing people in their old jobs is the fastest way to get them back to work. Anticipating job growth sectors and encouraging workers to transition can prevent further job loss.
The COVID-19 pandemic has caused a substantial reallocation of jobs, with some sectors being severely damaged while others experienced a boost. The return to full employment may not happen anytime soon. Public-policy choices could help reduce the amount of permanent job loss and keep workers attached to their jobs, such as work-sharing programs. The fastest way to re-employ people is to take them back to their old jobs because the reallocation of workers is full of friction. A useful case study of what factors lead to nontraditional or new work choices can be seen in the influx of men into nursing over the past few decades. To prevent more job losses, it is essential to anticipate what sectors are likely to grow and encourage workers in shrinking industries to transition to these sectors.
Factors Influencing Men's Entry into R.N. Work in the U.S. and the Role of Strong Institutions: The job market and economic conditions, as well as access to education and training, play a significant role in men entering R.N. work. However, the lack of safety nets in the U.S. and institutional failures during the pandemic highlight the need for policy change.
Men are more likely to enter R.N. work when they are in good economic times and have proximity to colleges, making this a potential policy lever. The U.S. job market's lack of safety nets contributes to people feeling insecure about embarking on new careers, and American capitalism's dynamism complicates the issue further. Comparing the U.S. labor market to those of other nations may not be a productive solution, as institutions and policies are drastically different. The pandemic highlighted the importance of strong institutions, which U.S. institutions have failed to provide. Other countries, such as South Korea, Taiwan, and Germany, have utilized their institutions effectively during the pandemic.
The Paths Nations Can Take During COVID-19: To avoid inequality, poverty, and fascism, countries must choose wisely among four scenarios: maintaining the status quo, becoming more authoritarian, turning to corporations, or strengthening the social safety net and implementing the right policies.
Acemoglu suggests that COVID-19 is a critical juncture in history as it presents various paths for nations to take. The first scenario involves maintaining the status quo, which will not solve any existing problems. The second scenario is worse as it involves becoming more authoritarian like China or China-lite, which combines authoritarianism with inefficiency. The third scenario involves turning to corporations, which could worsen the economy's inequality and democratic nature. The fourth and better option is to strengthen the social safety net and implement the right regulations, monetary, and fiscal policies, just like how the US responded to the Great Depression. Implementing these policies is crucial if we wish to avoid inequality, poverty and ultimately, fascism in our modern and globalized economy.
Navigating Volatility in the Job Market: Instead of relying on uncertain predictions, financial assistance without job attachment can potentially benefit vulnerable populations such as ex-prisoners in reducing recidivism rates and overcoming discrimination in a tough job market.
Predicting the future, especially in times of volatility and uncertainty, is almost impossible but we still try to do it. Hard-hit industries, ex-prisoners, and recent graduates are especially vulnerable in this job market. However, policies like Ban the Box, which aimed to help ex-prisoners get jobs, had unintended consequences of increased discrimination against young black and Hispanic men, especially in a down economy where employers had more power to discriminate. Instead, providing financial assistance, without a job attached, has shown to have beneficial impacts on reducing recidivism among ex-prisoners. While the optimal amount and duration of financial assistance are still unknown, this approach is promising in helping vulnerable populations in the job market.
Investing in Individuals Post-Prison Release: Providing long-term cash payments to people leaving prison could be an effective way to reduce recidivism rates and benefit society as a whole. Economists are researching the potential benefits of U.B.I. programs for this population.
Investing $1,000 in individuals upon their release from prison can be a more beneficial choice than forcing them to return to prison in a year or two. Though there were unemployment benefit experiments in the 1970s, more research needs to be done on long-term cash payments. Economist argues that it would be worthwhile to target resources towards people leaving prison. They are currently researching the potential benefits of U.B.I. programs and are open to the idea.
