Reopening alone won’t bring back the workforce

For the economy to come back, we have to deal with the kids first.


June 1, 2020

Photo via Chris Putnam/Barcroft Media via Getty Images

Did you catch the silver lining in last week’s unemployment figures? Although 2.1m people filed new claims for unemployment, the overall unemployment rate fell slightly: 3.86m Americans canceled their ongoing unemployment claims — meaning, most likely, they got their jobs back.

But with states across America reopening, the job gains feel… slim.

There are 2 separate factors at play here: First, businesses can’t afford to hire just yet. In Philadelphia, for instance, just 10% of companies brought back furloughed workers. 

But there’s a 2nd problem: Many workers aren’t ready to return even if they are offered their jobs back.

Someone please take care of the kids

In its semi-regular economic update, the Fed cited 3 big reasons for worker hesitation: 

  • Childcare: Many schools and summer camps are taking the next few months off — and while childcare centers are slowly gearing up for an onslaught of anxious kids, as many as half might be at risk of closing permanently.
  • Health fears: Retail and fast food workers are putting themselves at risk to enforce mask and social distancing rules, and that “customer is always right” ethos is starting to get in the way.
  • Pay cuts: For ⅔ of workers, going back to work would mean a pay cut from $600/week in unemployment benefits — not an easy ask in such a tight economy. 

Lawmakers are finally facing the music 

That V-shaped recovery? Especially after such a turbulent weekend, it’s not going to happen without some interventions.

To relieve working parents, Congress is considering proposals for a childcare bailout. 

And for low-wage workers, it’s weighing whether to create a bridge out of unemployment: A “return-to-work bonus” that would add $450/week to worker salaries for the first several weeks after they reenter the workforce.

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