Unemployment in the United States rose to nearly 15% in April, according to the Department of Labor’s latest figures — the highest rate since the 1930s Great Depression. The real figure could be as high as 20%, based on how the department classifies workers.
Since mid-April, millions more people have applied for unemployment insurance and the total unemployed at May 9 reached 36 million.
Eleven million workers reported working part-time, because they couldn’t find full-time work, up from 4 million before the pandemic.
Millions more people tried to apply for insurance, but the unemployment agencies were so swamped, they either couldn’t process these applications or were weeks late.
According to a poll published in the New York Times on May 15, “more than half of those applying for unemployment benefits in recent weeks were unsuccessful”.
The NYT article said: “In places where the fitful reopening has started, workers called back often face reduced hours and paychecks as well a heightened risk of infection. Declining to return, however, is likely to put an end to any jobless benefits."
Economist Rubeela Farooqi told the NYT: “It’s a very tough choice for those in the service industry and those at the lower end of the pay scale. Do you go back and risk getting sick, or have no money coming in?”
The service industries employ a high percentage of African Americans and Latinos. Also in the “lower end of the pay scale” are Native Americans and poor whites.
It is clear that the US economy and the working class have been hard hit.
Capitalists are pressuring both parties to lift all aspects of the shutdown. They want to get back to the business of making profit, even if that means more deaths.
Most states are trying to reopen businesses shut down by the pandemic. Some states are being cautious, linking businesses reopening to adoption of safety measures to keep the virus from spiking again, while others are more reckless.
An experiment is underway. Will the reopening ‒ with more and more people going back to workplaces where they may be exposed, and others travelling, and crowds developing without keeping safe distances ‒ result in a new spike in infections and deaths leading to a need for reversal?
Deaths from the virus reached 90,000 on May 18, according to the official count. We know the real figure is much higher, since the official figure comes mainly from deaths recorded in hospitals and nursing homes, where tests confirmed they were caused by the virus.
Big jumps in overall reported deaths compared to the norm prove the official figure is lower than the real number. Many deaths in homes, or on the streets, go untested, and are not recorded.
The Institute for Health Metrics and Evaluation at the University of Washington predicted that the death toll will rise, due to increased mobility of the population. Institute Director Dr Christopher Murray said some states that moved to reopen are experiencing double-digit spikes in reported cases.
There is a time lag between exposure and development of symptoms, and more time before deaths occur and are reported. It will take months to see the full results of the opening up of businesses in this experiment with peoples’ lives.
President Donald Trump hopes that a quick opening up of all the economy will mean it will come roaring back. Some bourgeois economists agree with him, at least to some extent. However, we should be more cautious. We are in a situation never before seen in the history of capitalism. We just don’t know what the short- or long-term economic effects will be.
If the economy continues to reopen without causing a big increase in new cases and deaths leading to a new shutdown, we may begin to get an idea of what those effects will be.
Just as the pandemic is international in scope, so is the economic impact. What happens to the world economy will affect the US. For example, the European Union has said it will experience a “deep and uneven recession” of historic proportions, with a contraction of 7.5% this year in its member countries. That certainly will have an effect on the US.
Worldwide, the pandemic has greatly lowered the supply of sufficient food, with large numbers of people in the Global South (oppressed nations, the majority of humanity) facing starvation. Just as the poorer nations suffer the most, within the US, the poorest are hit the hardest.
The pandemic is impacting African Americans, Latinos and Native Americans (especially the Navajo Nation) hard, with cases and deaths disproportionally high. They have been hit hard economically, too, along with poorer white workers.
Hunger has risen since the 2007–08 Global Financial Crisis, as the sluggish recovery has impacted poorer people negatively. It has risen sharply during the pandemic, with long lines at food banks. Outside some food banks, there are lines of people standing close together. Others have lines of cars stretching long distances.
The NYT reported on May 6 that, “lines outside food banks have stretched for miles, prompting some of the overwhelmed charities to seek help from the National Guard”.
This shortage of food is without modern precedent in the US, according to the NYT: “Among mothers with young children, nearly one-fifth say their children are not getting enough to eat, according to a survey by the Brookings Institution, a rate three times as high as in 2008, during the worst of the Great Recession.”
However, the Republican Party has so far refused to take effective action to alleviate the crisis and the Democratic Party’s alternative falls short.
“The reality of so many Americans running out of food is an alarming reminder of the economic hardship the pandemic has inflicted,” said the NYT.
“But despite their support for spending trillions on other programs to mitigate those hardships, Republicans have balked at a long-term expansion of food stamps — a core feature of the safety net that once enjoyed broad support but is now a source of a highly partisan divide.”
According to the NYT, the Democratic Party “want a temporary increase of food stamp benefits of 15% during the crisis”, while Trump and the Republicans are opposed. “Even as the pandemic unfolded, the Trump administration tried to push forward with new work rules projected to remove more people from aid.
“Trump and his congressional allies have agreed to only a short-term increase in food stamp benefits that omits the poorest recipients, including five million children.”
The Democrats' proposal is insufficient. The current food stamp program does not provide enough food, and it should be raised by more than 15%, and permanently.
Both Democrats and Republicans have worked to cut holes in the safety net. It was under former Democrat President Bill Clinton that some drastic cuts were made to it. In general, the Republicans have driven to the right the most, with the Democrats in their wake, but not as far.
It is quite possible we are entering a deep recession in the US and much of the world. If that indeed occurs, working people will bear the brunt of the suffering, including a rise in hunger.