By: Renaldo C. McKenzie
As businesses reopen following the shutdown due to COVID, the issue is now changing from needing people to go back to #work to needing #customers. So that they’re offering massive discounts & doing promotions to generate business They thought that ending the stimulus would help.
Businesses were having to hire to meet demand, but they never thought that #demand was also driven by the very thing that they wanted to end that was generating this demand: profit. Now that the #stimulus has dried up, people are not spending as much & businesses have to re-posture themselves. So that they now have to lay off as soon as they’ve hired. There were great hopes for a return to almost normal this fall as federal #unemployment benefits halted, but they’re not panning out. Repeated #covid-19 outbreaks & escalating shortages of key goods have brought a volatile fall.
According to a story published in the Times Magazine; “The economic impact of COVID-19 will cut deeper than any recession in living memory. The monetary-policy report submitted to Congress in June by the Federal Reserve noted that the “severity, scope, and speed of the ensuing downturn in economic activity have been significantly worse than any recession since World War II.” Payroll employment fell an unprecedented 22 million in March and April before adding back 7.5 million jobs in May and June. The unemployment rate jumped to 14.7% in April, the highest level since the Great Depression, before recovering to 11.1% in June” (https://time.com/5876606/economic-depression-coronavirus/)
The data reflects conditions from mid-June–before the most recent spike in COVID-19 cases across the American South and West that has caused at least a temporary stall in the recovery. Signs of corporate economic distress are mounting. And second and third waves of coronavirus infections could throw many more people out of work. In short, there will be no sustainable recovery for now as the “free money” ended and unemployment remains high and is climbing with rising inflation. Businesses will remain closed; not only due to covid or lack of hires, but also lack of customers who were home benefitting from this free money that they were willing to spend. I recently checked my letterbox and notice that suddenly there has been a plethora of mails from various restaurants, delivery companies and retail chains offering huge discounts and promotions as a way to get me to spend. While their employees complain of slowed business. One Uber Eats delivery driver and company stated that they are feeling the pinch as business is really slow and the pandemic money dries up and employment rising.
Hiring slowed sharply in August, #supplychain issues have worsened, #inflation remains high and #consumersentiment plunged in August and remains near its #pandemicera low. While September #jobs numbers was expected to show some improvement over August, forecasters keep pushing out predictions for a full #economicrecovery further and further.
What has been the response from congress concerning this? Silence…. Unless that this new bill to increase the debt ceiling includes a provision for an infrastructure bill that would boost employment and deal with the social and economic lack and inequities in the society that continue to leave black and brown people behind.
WASHINGTON—The Senate voted along party lines Thursday to raise the U.S. borrowing limit into December,
The fact is that not only are we at the brink of a worsening economic crisis, According to The Times “there are millions of Americans who have returned to work this year as health risks have subsided, but a full jobs rebound is a long way off, and the recovery so far has largely left behind Black Americans and workers without college degrees.”