Aug 02, 2020
Walters: California economy faces tough slog
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It now seems like ancient history, but only a few months ago, California’s economy was roaring.
“By any standard measure, by nearly every recognizable metric, the state of California is not just thriving but, in many instances, leading the country, inventing the future, and inspiring the nation,” Gov.Gavin Newsom boasted in February’s state of the state address.
“We remain the fifth-largest economy in the world — enjoying 118 consecutive months of net job growth, some 3.4 million jobs created since the Great Recession and nearly 4 million small businesses call California their home. More than half of all U.S. venture capital still flows to California companies. We’ve averaged 3.8% GDP growth over five years — compared, respectfully, to 2.5% national growth.”
Just eight days later, Newsom delivered his first webcast report on the coronavirus infection, quickly followed by his March 4 state of emergency declaration and the first of many orders that would shut down much of the state’s economy.
The economy quickly imploded as hundreds of thousands, and then millions, of Californians lost their jobs. Two months later, with California’s infection rates relatively low and unemployment soaring to levels not seen since the Great Depression, Newsom eased up. He allowed a partial “reopening” of some economic sectors and a few hundred thousand Californians went back to work.
The respite was, however, short-lived. As infections, hospitalizations and deaths surged in July, Newsom reimposed economic shutdowns, many jobs once again vanished and Californians were left wondering about the state’s economic future, and their own.
The latest report from the state Employment Development Department reveals that unemployment hit 16.4% in May — four points higher than the peak of the Great Recession a decade ago — and then dropped a bit to 14.9% in June during the brief reopening. Since then, it’s climbed again, but how high we don’t yet know.
Lodging and food service workers have been hit the hardest, but there are no exempt sectors in those grim numbers.
As high as it is, the official jobless rate is a bit misleading, because it is a percentage of the state’s labor force, and thus doesn’t count those who have dropped out. California’s labor force has shrunken by about 400,000 persons in the past year and including them as jobless pushes the real unemployment rate up by at least two percentage points, knocking on the door of 20%.Related Articles
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Overall, employment in June was 2.5 million below what it had been a year earlier, which corresponds to having 2.5 million more Californians collecting unemployment insurance benefits than in June 2019. The extra $600 a week in benefits that Congress provided to jobless workers has buoyed California’s consumer economy by more than $5 billion a month, staving off housing evictions and foreclosures, but they expired last week and it’s uncertain whether they will be reinstated, eliminated or reduced.
Legislative leaders are proposing a state-only relief program that would maintain extra jobless benefits, but it hinges on borrowed money and its fate is equally uncertain.
After the rollercoaster ride of the past five months, and with COVID-19 still rampaging, it’s evident that the V-shaped recovery some economists predicted — a rapid decline followed by a rapid expansion — is not going to happen.
It’s more likely to be a U-shaped recovery when, and if, it happens. That is, we will probably see a fairly long period of low output and high unemployment and, whenever the pandemic is tamed, a gradual expansion — but no one can predict when the worst will be over.
It’s going to be a very tough slog.
Dan Walters is a CalMatters columnist.
News Source: mercurynews.com
Trump Insists GOP Senators That Do Not Support Him Will Lose Their Elections
Meaghan Ellis August 13, 2020 0 Comments
President Donald Trump is warning that Republican lawmakers who do not support him will likely fall short in the November Congressional election.
During a phone interview with Fox Business on Thursday, Trump weighed in on the Republicans’ uphill battle to maintain control of the Senate.
Trump claims those who aren’t “as supportive” of him could be in jeopardy of losing their seats.
“We’re fighting very hard in the Senate. I’ll be honest, the Senate is tough,” Trump told Maria Bartiromo on Thursday. “We have a couple of people that aren’t as supportive of Trump as they should be, and those people are going to lose their elections.”
He continued, “The ones that don’t support, and I’m just talking, take a look … you have a few people that want to be cute, and those people are going to lose their elections,” Trump added. “And that’s a problem for the Senate.”See Trump’s remarks below:
Over the last couple of months, inter-party division has grown within the Republican Party amid discussions about the next coronavirus relief package.
Trump’s remarks come just one day after Senate Majority Leader Mitch McConnell (R-Ky.) admitted that control of the Senate could “swing either way” for the upcoming Congressional election, as previously reported on IJR.
“They are tough challenges,” McConnell admitted. “What I’d tell you is this is a tough fight. It could go either way. We’re optimistic we can hold on.”
“This was always going to be a tough cycle for us,” the senator said, adding that there is “a lot of exposure around the country.”
Despite Trump’s claims about Senate seats being in jeopardy for those who are not as supportive of him, McConnell has reportedly signaled vulnerable Republican lawmakers can “distance” themselves from Trump, according to CNN.
“These vulnerable senators can’t afford to explicitly repudiate Trump,” one senior Republican told CNN. “They just need to show they are independent on issues important in their states.”