How The Government Can Guarantee Everyone A Job And Fix The Unemployment Crisis Immediately

Joe Weisenthal (0:11)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:16)

And I'm Tracy Alloway.

Joe Weisenthal (0:18)

So Tracy, we kind of have an extremely timely episode today, given the news.

Tracy Alloway (0:24)

This is gonna be one of those episodes where we have to definitely make sure that we say what day we are recording and what time, but it's jobs day.

Joe Weisenthal (0:32)

It's jobs day. That's right, it's July 2nd, 2020 So depending on when you're listening to this, take that into account.

And just about 30 minutes ago, we got the June jobs report. And at least on the headline measures, it was definitely better than expected.

Tracy Alloway (0:50)

Yeah, I'm looking at those now. So we have 4.8 million jobs added versus expectations of what was it? 3 point something, do you remember, Joe?

Joe Weisenthal (1:01)

Yeah, 3.2 million.

Tracy Alloway (1:03)

3.2 million. Yeah, so a huge beat on the expectations. And I'm looking at the chart. I know we've been debating about how best to chart all these various economic indicators, but you know, it looks like a V.

Joe Weisenthal (1:18)

If you just sort of look at the pure headline, I mean, it is jobs are coming back sooner than expected, I would say, and faster than expected. But of course, there's all kinds of caveats in there, including the fact that most of these, this snapshot of the economy was taken prior to this re-acceleration of the virus. So of course, there's a, in the US anyway, so there's a sense in which this is dated.

Also, you know, you have to look at permanent job losses, which continue to rise, even as total job losses continue to come down.

So I think like, you know, on the headline, it's good. It's good that the unemployment rate is already back down to 11%, though that's still worse than it ever was during the great financial crisis. But, you know, hopefully the headline trend continues. So for now, I guess that's hopeful news.

Tracy Alloway (2:14)

I mean, I do think there's a sense that unemployment is becoming obviously more of an issue. Like we are expecting the virus to reemerge at various points in time until we get a vaccine. We're expecting multiple waves of infections. And that means, you know, whenever the government orders people to stay confined or stay in lockdown, that we are probably going to see a hit to employment. And it's not through anyone's fault per se. It's basically policy-ordained unemployment. And so we as an economy or society need to start talking about that and how we kind of figure it out.

Joe Weisenthal (2:53)

Absolutely. And this really sort of like gets to the key thing. So it's like we have this massive, even if it's getting better, and it is, we have this massively high unemployment rate. We had a massively high unemployment rate just a decade ago.

And we went between the last crisis and this one, we had elevated unemployment on a historical basis up until extremely recently. I like maybe like in 2019 or 2018, we might've been close to what economists might call full employment, though that's a very nebulous term. But there is this permanent feature, it seems, of the US economy and arguably even going back to the post.com era as well when the term jobless recovery first started talking that like underemployment or elevated unemployment seems to be a more or less permanent feature of the economy and periods of when we could say anyone can get a job who wants one seem to be a depressingly rare crisis or no crisis.

Tracy Alloway (3:58)

You mentioned full employment there. And I mean, as you point out, that in itself is kind of a weird idea. The notion that because we have an unemployment rate at something like three or 4% that we're at full employment even though millions of people still don't have jobs. It's kind of funny that that's the accepted norm. And again, I think one of the things about the coronavirus crisis is one of the unique things about the crisis is that it is opening up these bigger conversations about what employment should mean.

Joe Weisenthal (4:30)

Yeah, totally. And also, even prior to the crisis, economists needed to do some soul searching because we got down to some 4% unemployment as recently as earlier this year. But there was a point in 2017 or 2016 where like, oh, unemployment can't go below 5%. Then it went below that. It's like, oh, unemployment can't go below 4%.

And we never got associated with surge in inflation. So there are just all kinds of reasons to just sort of rethink employment in this country or in any economy and what we're capable of and how many people are left behind, unemployed, underemployed in jobs that don't pay them well, even during the so-called boom time.