There is no part of coronavirus that isn’t utterly terrifying. Due to many businesses shutting down as a result of the rapid spread of the disease, millions are dealing with unemployment. The coronavirus recession is real, and it’s already happening. A recession like this is so different from anything we’ve ever seen before. That makes it even more complex.
What’s most eye opening is that the coronavirus recession isn’t affecting any one industry over others. Of course, many are ones that directly deal with the public. The food service industry is hurting. Bookstores are closing, as is your favorite local coffee shop.
I’m lucky that the coronavirus recession isn’t currently affecting me financially. But if I’m learning anything, it’s that what’s happening today could be completely different tomorrow. As a single parent, the fear of my finances being impacted is terrifying. My son’s father has lost his job already. He lives only two blocks away, but as a result of losing his job, he has to move out of our neighborhood. Not having him nearby is going to be hard to adjust to; however, I’m thankful he has somewhere to safely relocate to.
Stacey Trombley and her husband are already victims of the coronavirus recession. She spoke to Scary Mommy via email about their situation. Both work for the same casino in Ohio. On Friday, March 13th, they received word that the casino would be closing its doors. While the company vowed to pay its employees through the end of March, a week later, everyone was officially laid off. Trombley said they both applied for unemployment, but that payment doesn’t match the amount of their current take-home pay.
“What we’re concerned about most is the long term effects,” Trombley explains. “How long can the casino stay afloat with their doors closed? I know a lot of people think ‘they make so much money, they should be fine!’ but you also don’t realize their overhead costs. Rent alone is millions. How much do they have saved?”
She adds, “If this lasts a few months, we’ll be fine, back to work with only minor damage to our finances. Six months? A year? I don’t know. I assume a casino will be one of the last places allowed to open — along with other ‘entertainment’ venues.”
And that’s the biggest thing we have to remember: the COVID-19 recession is not a typical recession. In a traditional recession, the goal for the government is to enable companies to create more jobs. But, right now, the government is asking people to not work for the sake of our current public health crisis, so job creation isn’t the end goal. Right now, the government’s biggest issue is figuring out how to slow down the rapid spread of coronavirus. At the same time, they need to figure out ways to keep the economy from completely bottoming out because people will need job options when our shelter in place restrictions are lifted.
In the meantime, people still need income while we wait to see how long this pandemic goes on. People still need to feed their families and provide for their basic needs, and all of those things still come at a price. The current plan for a stimulus check of $1,200 won’t cover a month’s rent in most major cities. And since it’s a one-time payment, where does it leave people when it’s gone? The cycle continues with no real solution. It’s leaving people overwhelmed with anxiety and fear.
Senators Michael Bennet, Cory Booker and Sherrod Brown have proposed a bill to provide families with cash. Ezra Klein calls it “generous, targeted, and, crucially, automatic.” The bill proposes delivering up to $18,000 to families of four and, more importantly, continuing the aid as the pandemic continues or they raise unemployment payouts. Bennet doesn’t see this proposed solution as a stimulus. “It’s an economic support payment,” he tells Vox. “We are asking people not to work in order to slow down the spread of the disease. In order to do that, you have got to give them some basic measure of economic security.”
There is no concrete end date to these shutdowns. Right now, there’s not even a tentative end date. Data on the spread of the virus varies from day to day, even hour to hour. Many of us are hunkering down with the reality that we could be spending the next few months in quarantine. And if that’s true, there’s no way people are going to be able to find new jobs, let alone pay their bills. Trombley and her family are some of the “lucky” ones who will be able to survive for a few months, but most American families do not have that kind of safety net. So, what will they do? What about those people who are already at the bottom?
Annie Lowrey, staff writer for The Atlantic focusing on economics, spoke with Ezra Klein on his podcast about the coronavirus recession and ways that we could potentially help those losing their jobs. One of the proposals is to simply give families and individuals cash and allow them to spend it as they deem necessary. Expanding programs like unemployment and SNAP simply doesn’t work for everyone due to program restrictions. “We are looking at like a literal decimation of the economy. And deciding who is in pain and who needs help takes time,” she explains.
Putting cash into the hands of those who need it is the most logical step right now. It might seem unconventional, but everything about our current situation is unconventional, so our approach has to be progressive and adaptive.
By giving people cash, Lowrey makes a really excellent point: “People know their needs. So, you just trust them to do the right thing with the money. And we know what they do with the money: By and large, they just buy more of what they were buying before — more groceries, more gas for their car, more stuff for their kids, more clothes.”
If we want to give the economy a fighting chance at survival, people need cash to spend. It benefits all of us.
The COVID-19 induced recession isn’t going to get any better overnight. So, if our government wants the economy, and American families, to even stand a shred of a chance, they need to bail out the people as much as the corporations.