[Snorlax94]

I recently looked up some data that I think helps describe what's happening in the US, and this, along with a recent column by Paul Krugman, makes me feel somewhat better that the jobs for many can rebound fairly quickly.

First, I looked up sectors of the economy by contribution to GDP. Travel/Hospitality/Arts/Entertainment/Recreation, Retail, and Air Travel add up to only about 6% of the US GDP. Maybe a little bit more based on the year and how things are defined.

But then when you look at employment data for these sectors, these sectors that are hardest hit contribute well over 17% of jobs. 

So that's how you can easily see unemployment hitting over 20% at its peak.

The good news, if there is any, is that for retail and many restaurant jobs, first, unemployment benefits should cover a good chunk of their lost wages. Second, there is a bit less of a loss of human capital -- if you lose a job being at a cashier, short-order cook, or waitstaff at one shop or restaurant, hopefully it's relatively easier to get re-hired at a different one. The unemployment benefits can be a reasonably small chunk of stimulus costs. If unemployment hits a peak where 40M Americans are receiving $1800 a month, that's $72B a month, and how many months will it be? If the US doesn't royally screw this up, the vast majority of Americans will be unemployed in total (even if there are two waves) for less than 6 months. Or, the total cost of paying unemployment for all of these hard-hit Americans should stay under $450B, which is a relatively small portion of the stimulus costs. Remember, the Tax Act of 2017, which unnecessarily inflated the US economy's deficit when things were already running well, increased the budget deficit by about $500B a year, each year. So to think of the scale, paying unemployment for 40M Americans for 6 months will be less than each year of the tax cuts for corporations (with special loop holes for real estate).

*Some* Americans will face unemployment for longer, and yes, some business owners will lose their businesses (or, they will lose their capital, which, fair or not, is how capitalism works. If the economy grows great, you reap the upside. If there is a brobdingnagian shock, you lose the investment. I think more should be done for small business owners who didn't have the resources to diversify and are hard-hit.) Some things will not come back in less than 6 months, but a LOT will. Retail + Restaurants contribute over over 17M  jobs, and they are largely totally closed across the US now, but I expect they'll all be permitted to re-open in a few months.

Some stores and restaurants will continue with less employment. The worst case is for a handful of industries where jobs will not-reappear quickly -- concession sellers at stadiums and concerts, employees at movie theatres and live theatres. But at least, that is a small portion of unemployment.



In fact, in a recent Paul Kruman email newsletter, he compared job recovery in pre-1990 recessions and post-1990. Pre-1990, recessions tended to be more like this one, by things like economic shocks where the shops/restaurants/theme parks are all there and ready to go when they can. Post 1990 recessions were often caused by business over-extension, so even when conditions improved and consumers wanted to spend their money, the businesses couldn't respond and grow as quickly. Krugman points out this recession is more like a pre-1990 recession, unless the federal government screws it up, and he thinks they probably will.

I think it's more of a hybrid. Less of a rosy picture than the typical pre-1990 recession because many jobs will not come back in the short-term (like clubs and movie theatres). But look how employment-typically roars back. That should be the case for the strong majority of Americans currently on unemployment.

The focus should be on a competent recovery. The employment picture brightens rapidly as long as the US doesn't keep screwing this up.

[Snorlax94]

I recently looked up some data that I think helps describe what's happening in the US, and this, along with a recent column by Paul Krugman, makes me feel somewhat better that the jobs for many can rebound fairly quickly.

First, I looked up sectors of the economy by contribution to GDP. Travel/Hospitality/Arts/Entertainment/Recreation, Retail, and Air Travel add up to only about 6% of the US GDP. Maybe a little bit more based on the year and how things are defined.

But then when you look at employment data for these sectors, these sectors that are hardest hit contribute well over 17% of jobs. 

So that's how you can easily see unemployment hitting over 20% at its peak.

The good news, if there is any, is that for retail and many restaurant jobs, first, unemployment benefits should cover a good chunk of their lost wages. Second, there is a bit less of a loss of human capital -- if you lose a job being at a cashier, short-order cook, or waitstaff at one shop or restaurant, hopefully it's relatively easier to get re-hired at a different one. The unemployment benefits can be a reasonably small chunk of stimulus costs. If unemployment hits a peak where 40M Americans are receiving $1800 a month, that's $72B a month, and how many months will it be? If the US doesn't royally screw this up, the vast majority of Americans will be unemployed in total (even if there are two waves) for less than 6 months. Or, the total cost of paying unemployment for all of these hard-hit Americans should stay under $450B, which is a relatively small portion of the stimulus costs. Remember, the Tax Act of 2017, which unnecessarily inflated the US economy's deficit when things were already running well, increased the budget deficit by about $500B a year, each year. So to think of the scale, paying unemployment for 40M Americans for 6 months will be less than each year of the tax cuts for corporations (with special loop holes for real estate).

*Some* Americans will face unemployment for longer, and yes, some business owners will lose their businesses (or, they will lose their capital, which, fair or not, is how capitalism works. If the economy grows great, you reap the upside. If there is a brobdingnagian shock, you lose the investment. I think more should be done for small business owners who didn't have the resources to diversify and are hard-hit.) Some things will not come back in less than 6 months, but a LOT will. Retail + Restaurants contribute over over 17M  jobs, and they are largely totally closed across the US now, but I expect they'll all be permitted to re-open in a few months.

Some stores and restaurants will continue with less employment. The worst case is for a handful of industries where jobs will not-reappear quickly -- concession sellers at stadiums and concerts, employees at movie theatres and live theatres. But at least, that is a small portion of unemployment.



In fact, in a recent Paul Kruman email newsletter, he compared job recovery in pre-1990 recessions and post-1990. Pre-1990, recessions tended to be more like this one, by things like economic shocks where the shops/restaurants/theme parks are all there and ready to go when they can. Post 1990 recessions were often caused by business over-extension, so even when conditions improved and consumers wanted to spend their money, the businesses couldn't respond and grow as quickly. Krugman points out this recession is more like a pre-1990 recession, unless the federal government screws it up, and he thinks they probably will.

I think it's more of a hybrid. Less of a rosy picture than the typical pre-1990 recession because many jobs will not come back in the short-term (like clubs and movie theatres). But look how employment-typically roars back. That should be the case for the strong majority of Americans currently on unemployment.

The focus should be on a competent recovery. The employment picture brightens rapidly as long as the US doesn't keep screwing this up.