Ask HN: How to employ the 30M Americans that will lose their jobs?
44 comments
Things are getting weird. I’m not sure how many people are even going to want to go back work at a normal job after a month or two.
A lot of people losing their jobs are people making less than $20/hr, and right now unemployment pays more than working. In fact, in California if you make under $25/hr your unemployment check will be bigger than your regular check. This only goes to July 31, but this sort of distortion is going to completely upend the labor market. If you made between $7.25 and $25 an hour there is little incentive for you to look for a job until July 31.
A lot of people losing their jobs are people making less than $20/hr, and right now unemployment pays more than working. In fact, in California if you make under $25/hr your unemployment check will be bigger than your regular check. This only goes to July 31, but this sort of distortion is going to completely upend the labor market. If you made between $7.25 and $25 an hour there is little incentive for you to look for a job until July 31.
Social distancing in some form will likely continue through June, at least. So I doubt the economy snaps back overnight and everyone gets rehired in a months time. So there is your extra slack. However you haven’t experienced this situation nor thought about it much so let me enlighten you about how there is no extra incentive to stay unemployed.
If you happen to have benefits, you lost them with unemployment. Matched retirement contributions, health insurance, tuition reimbursement, etc.
Do you know how much full insurance premiums are for most plans with COBRA? My brief unemployment experience showed me that just for me it ended up being nearly 700 a month and that’s someone in their late 20’s at the time with not the best healthcare plan I could have gotten but the middle range one with a 1500 deductible. For a family of 4? Easily 2k.
What you’re saying is we shouldn’t pay people to also sort of kinda have enough money to continue health insurance during a pandemic??? For those to don’t have it and do get sick enough to need care there goes a good portion of that extra money and likely even more, especially if it involves hospitalization - without insurance or a job they’ll likely be bankrupt unless that happen to have a lot in savings.
You also have to skip a week with unemployment before taking the benefit, that’s a week lost income. Finally only in the states with the best benefits, eg NY pays 80% of your salary, do you possibly come out ahead. Some states only pay 45-50% cause they don’t fund their versions as much comparatively.
Additionally unemployment is backlogged that means delayed payments and thus people will possibly incur late fees, interest and other penalties and costs associated with that.
Finally even if somehow someone comes out ahead due to being in a state that gives you a high percentage of your over all income, the amount of situations like that is small and if it happens it is likely a marginal increase at best. Considering we are likely not going to have enough jobs to get people back to work in any significant numbers by July anyway, consider any increase after all that a slight additional stimulus check for people who have been impacted by this and happen to also be low wage workers.
If you happen to have benefits, you lost them with unemployment. Matched retirement contributions, health insurance, tuition reimbursement, etc.
Do you know how much full insurance premiums are for most plans with COBRA? My brief unemployment experience showed me that just for me it ended up being nearly 700 a month and that’s someone in their late 20’s at the time with not the best healthcare plan I could have gotten but the middle range one with a 1500 deductible. For a family of 4? Easily 2k.
What you’re saying is we shouldn’t pay people to also sort of kinda have enough money to continue health insurance during a pandemic??? For those to don’t have it and do get sick enough to need care there goes a good portion of that extra money and likely even more, especially if it involves hospitalization - without insurance or a job they’ll likely be bankrupt unless that happen to have a lot in savings.
You also have to skip a week with unemployment before taking the benefit, that’s a week lost income. Finally only in the states with the best benefits, eg NY pays 80% of your salary, do you possibly come out ahead. Some states only pay 45-50% cause they don’t fund their versions as much comparatively.
Additionally unemployment is backlogged that means delayed payments and thus people will possibly incur late fees, interest and other penalties and costs associated with that.
Finally even if somehow someone comes out ahead due to being in a state that gives you a high percentage of your over all income, the amount of situations like that is small and if it happens it is likely a marginal increase at best. Considering we are likely not going to have enough jobs to get people back to work in any significant numbers by July anyway, consider any increase after all that a slight additional stimulus check for people who have been impacted by this and happen to also be low wage workers.
We decided to furlough people so they could keep their benefits. Also paid out their PTO balance which should hold them over until unemployment kicks in.
Here in California someone making $15/hr was making $600/wk. On unemployment they will now make $877/wk. That’s a 46% increase. It’s huge. We were trying to keep people employed while staying home but people literally started filing for unemployment anyway.
Here in California someone making $15/hr was making $600/wk. On unemployment they will now make $877/wk. That’s a 46% increase. It’s huge. We were trying to keep people employed while staying home but people literally started filing for unemployment anyway.
Did you offer health insurance? Again COBRA costs will easily take that extra $277 per week or more if you have a family. This situation is limited, it only applies to the few states with good unemployment compensation, if the person is a minimum wage worker and also if that someone didn’t have insurance, doesn’t opt for cobra (or has been picking up a separate plan through the ACA exchanges) and/or its just coverage for themselves for cobra then they might come out ahead. This extra money lasts until July and that’s it.
I’m guessing some people might rethink it when they see the costs of cobra and the fact that the sooner they hit the unemployment compensation the sooner they start the clock of limited benefits. If they need it for more than 6 months or whatever the state allows the max to be then they’re going to regret not first going for being furloughed. Unfortunately people also aren’t rational or forward thinking.
The way they did unemployment insurance certainly isn’t perfect in the stimulus bill. But I don’t think it’s all that problematic.
I’m guessing some people might rethink it when they see the costs of cobra and the fact that the sooner they hit the unemployment compensation the sooner they start the clock of limited benefits. If they need it for more than 6 months or whatever the state allows the max to be then they’re going to regret not first going for being furloughed. Unfortunately people also aren’t rational or forward thinking.
The way they did unemployment insurance certainly isn’t perfect in the stimulus bill. But I don’t think it’s all that problematic.
We pay 100% health insurance and will try to keep it as long as possible while they are furloughed. Things change day to day though. A number of our buyers, including some large public companies, decided to just stop paying their bills by switching to net-180 terms.
I can tell you right now most $15/hr employees aren’t too worried about health insurance. Most of them have gone their entire life without, so suddenly losing it again isn’t as big a deal as you might think.
I can tell you right now most $15/hr employees aren’t too worried about health insurance. Most of them have gone their entire life without, so suddenly losing it again isn’t as big a deal as you might think.
I don't know anything about economics. My thoughts keep gravitating towards the US and Canada employing people to invest in infrastructure upgrades. It's a way to address a serious concern in both countries (especially the US), put cash into the hands of citizens, thus the economy, and give a lot of people a bit of hope.
You wouldn't need to create tens of millions of jobs directly in infrastructure, just enough that the money would move around and make related business possible.
Maybe this is a really stupid idea, I don't know.
You wouldn't need to create tens of millions of jobs directly in infrastructure, just enough that the money would move around and make related business possible.
Maybe this is a really stupid idea, I don't know.
Helicopter money. The fed has fired up the money printer and will shovel cash out the door to any company that can take it and retain/hire people (though I suspect a substantial chunk of that will be raked by business owners and financial middlemen).
The reason that helicopter money won't lead to hyper-inflation is because the entire rest of the world is just as fucked as we are, so the dollar will remain the safest currency no matter how much the money supply is increased.
The reason that helicopter money won't lead to hyper-inflation is because the entire rest of the world is just as fucked as we are, so the dollar will remain the safest currency no matter how much the money supply is increased.
Just give them their old jobs back afterwards?
Not all the jobs will still be there afterwards. If lots of restaurants, hotels, airlines, etc. go bankrupt, rebuilding will require someone who has the capital to invest in building new businesses to replace them.
Restaurants come and go all the time, I don't think there will be any big issues there. Businesses relying on tourism might be another matter.
My father is in his late 70s, but he still runs a business employing a few dozen people. He probably can't afford to keep the business afloat while everything is shut down, and he might not have the money or energy to start everything up again in a few months.
He's probably somewhat of an outlier, since most business owners are younger and will have better chances of starting over, but some business won't recover from this.
He's probably somewhat of an outlier, since most business owners are younger and will have better chances of starting over, but some business won't recover from this.
Give them solid union jobs in manufacturing.
I suppose that will work in states that still have unions, but I know for sure that a lot of the states that are seeing large increases in manufacturing jobs are seeing that because companies fleeing unions.
The green new deal sounds like a perfect opportunity... but unlikely in the next 6 months.
A UBI in the meantime would be a super cheap way to prevent a lot of issues.
A UBI in the meantime would be a super cheap way to prevent a lot of issues.
There are also twists to this story. I am a retired engineer with considerable drainage and roadway experience. The infrastructure bill will increase the demand for my skills, which can be in short supply in normal times. I may have a technical duty to go back to work to assist enabling the actual construction work.
The workforce won't need retraining. The economy will need capital so there can be a workforce.
Green New Deal has a Plan. Clearly the Gov. has the spare cash. Great opportunity to get serious about Climate, which if unattended-to will make Covid look like a walk in the park. Who knows, maybe we could catch up with India in renewable energy in a year or three.
What's the plan? Where do you think the cash comes from? How will climate change going to factor in?
For one, the US government subsidies a lot of fossil fuel companies, easily worth 50-60 billion in cash
That 50-60 billion isn't going to do much for the GND. You need to come up with something like 200 trillion.
My biggest concern of the current recession is that a lot of jobs wont recover. They will be replaced with automation.
Companies now realise that the more services they can run autopilot the better they will weather future storms
Companies now realise that the more services they can run autopilot the better they will weather future storms
As a former waiter turned programmer, I genuinely hope we find more ways to make more programmers, even if it is at the expense of having less waiters.
Life is simply better in every way.
Life is simply better in every way.
Somewhat interesting and purely academic curiosity, but US GDP (20 trillion) split evenly among US pop (330 million) is roughly $60k/year, compared to average income at $63k/year.
That includes children. And, remember that the median income is only 30k, so the average is skewed by a few people at the top making ridiculous amounts of money. But if it were split evenly, you’re right, the median American would at least double their income!
Base it on just the adult population of around 254 million and it goes up to over $78k/year.
Interesting, but only about half those people work, and even fewer full time.
Well, actually-
There is a way of calculating GDP that uses aggregated payroll income...but it also uses other accounting measures that reflect the notion of "national income", like corporate profits (which are revenue in excess of expenses, which include payrolls) as well as others.
The interesting point is that less than 50% of the US population are on payroll. So summing the average income of 63k/year for everyone on payroll accounts for well less than half of GDP.
The point you wanted to make was- where the F are all the rest of those sweet sweet income money dollars going?
There is a way of calculating GDP that uses aggregated payroll income...but it also uses other accounting measures that reflect the notion of "national income", like corporate profits (which are revenue in excess of expenses, which include payrolls) as well as others.
The interesting point is that less than 50% of the US population are on payroll. So summing the average income of 63k/year for everyone on payroll accounts for well less than half of GDP.
The point you wanted to make was- where the F are all the rest of those sweet sweet income money dollars going?
The first iteration: https://en.wikipedia.org/wiki/New_Deal
Today’s version: https://en.wikipedia.org/wiki/Green_New_Deal
The federal government acts as employer of last resort.
Today’s version: https://en.wikipedia.org/wiki/Green_New_Deal
The federal government acts as employer of last resort.
chance_state(1)
30M jobs “lost” in a forced moratorium. They will be gained back when the shenanigans passes with this flu.
Not like people will stop drinking, going to activities, spending money and become monks after a couple weeks.
Not like people will stop drinking, going to activities, spending money and become monks after a couple weeks.
Very much not "the flu".
As far as getting old jobs back, many companies will cease to exist unless bailout money magically sustains them, which it likely won't.
Many businesses were weak, operating with high debt and thin margins. The math that allowed them to continue to exist just got destroyed, they aren't coming back. No cash flow, no cash reserves means no ability to service that debt. Taking on additional debt to bridge this crisis would create a new level of future debt service that isn't sustainable with previously good revenues.
Disposable income is going to be gone for many until we get a vaccine rolled out in 18-24 months. Hospitality, travel, foodservicr, events and entertainment industries will be decimated until we reach herd immunity.
As far as getting old jobs back, many companies will cease to exist unless bailout money magically sustains them, which it likely won't.
Many businesses were weak, operating with high debt and thin margins. The math that allowed them to continue to exist just got destroyed, they aren't coming back. No cash flow, no cash reserves means no ability to service that debt. Taking on additional debt to bridge this crisis would create a new level of future debt service that isn't sustainable with previously good revenues.
Disposable income is going to be gone for many until we get a vaccine rolled out in 18-24 months. Hospitality, travel, foodservicr, events and entertainment industries will be decimated until we reach herd immunity.
How can new businesses / startups provide work to or help retrain this workforce over the next 6 months?