"The cost of closed schools"

 https://www.axios.com/economic-cost-closed-schools-e2c7a948-e89f-4431-9f1e-a900a422749c.html

Schools closing due to corona virus are affecting more than just our nation's education. It’s affecting our economy as well. It is estimated that learning virtually instead of in a classroom is costing us 700 billion dollars in lost revenue and productivity. This is due to childcare difficulties now that children are no longer attending school. These difficulties are forcing working parents - which are estimated to be one third of America's workforce - to take time off and watch their children. It is estimated by Barron's Analyst that we are losing 3.5% GDP from school closures. Obviously, this is heavily affecting our economy right now, but how much will it affect our economy in the long run? This makes me wonder how long it will take for us to see the total long term effect school closings have on our economy.

"Fed adopts new strategy to allow higher inflation and welcome strong labor markets"

 https://www.marketwatch.com/story/fed-unanimously-adopts-new-strategy-widely-seen-as-leading-to-easier-policy-2020-08-27?mod=economy-politics

The Fed has made the decision to surpass the United States' standard inflation target of 2% in hopes to boost the labor market.  No specifics were given regarding how high inflation would be let to run, but skepticism regarding whether inflation would far exceed the 2% at all emerged from experts.  This decision was made by The Fed after reviewing the experiences of other large economies who have seen inflation drop too low and become extremely difficult to reverse. Essentially, increasing the inflation target was done in a preventative effort.  

It is most likely that this shift toward support of a stronger labor market will impact minority groups and low-income workers the most.  Jerome Powell, Fed Chairman, does not expect this to completely turn around the United States' unemployment crises, however.  It is expected to assist in bringing the unemployment rate down, but not wholly fix the issue. 

As we near the presidential election, this makes me curious how it will impact voters.  As discussed in class, when inflation and/or unemployment are in poor shape, the party in office tends to get booted. Could this have the same impact? 

"$300 Unemployment Benefit: Who Will Get It and When?"

 https://www.nytimes.com/article/stimulus-unemployment-payment-benefit.html?auth=login-google

The Trump administration and many other states have agreed to distribute $300 to those who are unemployed from the Federal Emergency Management Agency who gives out disaster relief payments. So basically these funds are coming from the federal funds disaster savings. People without jobs with small unemployment benefits will not get the $300, but only those who already get the $100 weekly check. After the delays in the spring because of backlogs in the system, now states have the ability to keep the checks flowing to those who qualify for the check. Republicans are hoping for a smaller, $200, payment while Democrats are looking to give out larger sums of money. This extra liquidated cash sent out to people will stimulate the economy because more people will go to restaurants and retailers in the short run.

We know this is helping the economy in the short run, but how do you think it will stimulate and stabilize our economy in the long run?

As permanent economic damage piles up, the Covid Crisis is looking more like the Great Recession

As businesses closed due to the nationwide lock down during April and March, many people were suddenly unemployed with most of that unemployment expected to be temporary. Yet half a year later, only 37 percent of employees have been called back to their previous employers while 33 percent of workers that were put on furlough in March were laid off for good. That means that 3.7 million U.S. citizens have been permanently unemployment as of July with expectations between 6.2 million and 8.7 million unemployed workers for later this year. The problem with permanent unemployment is that the more time people spend unemployment, "their labor market skills atrophy, their connections to the employers weaken and many start getting discouraged and ultimately leave the workforce" and the loss of those skills, trust, and social networks with an employer takes money and time to rebuild that up.

While the shutdown affected the least advantaged of society that do not have the access to resources (ie. low-skilled workers/hard labor workers), these low-skilled workers could also speed up the economic recovery. The less-skilled, less-educated service workers who have been laid off may have an easier time finding an equivalent job in a different industry than the highly specialized workers searching for a job that fits their skills and education. Though this really depends on which industries are recovering. 

The issue of unemployment during this will test politicians as they argue on which how temporary or permanent this bout  unemployment is and what policies that should be employed.

https://www.washingtonpost.com/business/2020/08/25/permanent-economic-damage-piles-up-covid-crisis-is-looking-more-like-great-recession/#comments-wrapper

The GDP of a Mask

why-the-economic-value-of-a-face-mask-is-5614

    In the first six month of the year, rich world GDP has fallen by about 10%. In more recent months, face coverings have been largely recommended and enforced by law. Economists around the world are wondering if face coverings could help speed up recovery. The basic idea is that if more people wear face coverings, more people will be able to leave their residence, and utilize public transportation and entertainment. Calculations by Goldman Sachs suggest that a 15% rise in mask wearers will reduce the daily growth of cases by 1%. That eliminated the need for lockdown measures that would shrink the GDP by 5%. The Economist continued these calculations until finding that a single American wearing a mask could save the GDP by $56.14. These numbers suggest that governments should do more to increase the number of mask wearers throughout the world.

Shecession

The current recession has begun to be labeled by some as a ‘Shecession,’ because job and income losses are impacting women more than men. From February to May, 11 million women lost their jobs in comparison to the 9 million men who lost their jobs because of the pandemic. These losses ultimately erase a decade of labor gains women have made in the workforce, wherein 2019 women made up 50.04 percent of the workforce. The reasoning for the pandemic’s disproportionate impact on men and women stems from occupational segregation, where men are more likely to hold a managerial position, and because women still take on the majority of child care responsibilities. The second point is particularly important because with schools moving online and childcare options disappearing, more women had to reduce their work hours to care for their children. The ability for women to recover from the recession relies heavily therefore on childcare recovery plans. In the meantime, as women are more likely to remain jobless, the gender pay gap is likely to grow and overall wage growth will stall. Other than childcare recovery plans, what other policies could help mitigate the disproportionate impact on women? Or, another question, how will families adapt to becoming a one-income family instead of two?

https://19thnews.org/2020/08/americas-first-female-recession/

Fiscal policy multipliers

 Today's article from the Markets Insider points out that both the economy and the stock market historically performed better under Democratic than under Republican presidents. The main driving force seems to be the difference between the government spending and tax multipliers, which we will discuss in Chapter 3