‘We could probably get north of 20%’ unemployment by next week: labor economist

Labor Economist Bill Rodgers joins On The Move to discuss how the coronavirus epidemic has impacted careers and businesses, as the recent jobless report announced 3.28 million Americans claim unemployment.

Video Transcript

JULIE HYMAN: 3.3 million people filed for unemployment claims last week. And that number, could we see it go higher? We shall see.

Bill Rogers is a labor economist, frequented guest on the program. He's also a professor at Rutgers, and joining us now. Bill, it's great to see you.

BILL RODGERS: Literally, right?

JULIE HYMAN: Yeah. As we got that number today, which is just unprecedented, I know you've been looking back at the financial crisis and jobless numbers at that point in time. I mean, this can't even compare presumably. How long are we going to see claims like this?

BILL RODGERS: Well, that's really the big question. We definitely got this spike today. There were some concerns that, because of some administrative and technical issues in terms of people being able to log on and register, that we're going to get probably get another spike next week.

But these numbers clearly suggest that you've got an unemployment rate, based on some calculations I've done, that is probably in the range of around 15% to 20%. And so it is back to your question. If you get more people filing next week, we could probably get north of 20%.

One other thing about these numbers, these are only people who are-- they've been furloughed or they've been laid off. It doesn't include this other group of people that have now moved from being full time to working part time. But they obviously want to work full time. And so when you add those people in, you're going to have an unemployment rate that could be-- you know, I don't want to be alarmist, but it is going to be quite high, in that 20% to 30% range possibly.

RICK NEWMAN: Wow. Hey, Bill, Rick Newman. So we have the outlines of this stimulus bill that looks like it will pass completely by Friday. So there's a ton of aid in there for unemployed [INAUDIBLE]-- so enhanced unemployment benefits, and also provisions to include gig workers, independent contractors.

The question is, how much is that going to help people, and how much of a gap is still going to be left for people who might just fall through the cracks?

BILL RODGERS: Right. You pointed out the gig and the freelancers and people working nonstandard-- that's huge. Amongst economists, the sort of economist community, that has been an ongoing debate for the last maybe 10, 15 years as we've been moving to this 21st century information economy, where they have these more informal arrangements. How are we going to cover these people? So that's a very big piece.

But I think more to your point, the other part of your point is, you know, people are having to pay rents and mortgages at the end of this month. And so the timing of the one-time check that's going to be coming, people are going to still be put under a lot of pressure. They're going to have to draw down even more of their savings.

And what is very concerning about, well, we'll probably have to have another one of these packages is, you know, there's this statistic that the Federal Reserve, from their survey of consumer finances or personal well-being, 40% of Americans could not pay or cannot pay an unexpected bill of $400. So you know, this is, I think, the Speaker said and some other policymakers said, this is a down payment.

But it's a down payment because when we had great prosperity, we weren't shoring up our unemployment insurance system. We weren't shoring up our TANF and our other social insurance mechanisms. We really have sort of been asleep at the wheel, to be frank. And I'm not being political, but that's, I think, my observation.

DAN HOWLEY: Hey, Bill. This is Dan Howley. I guess one of the questions I have is, when what part of the economy will this eventually touch? Will it touch every single aspect of it? We're seeing a lot of layoffs right now in jobs that are directly impacted by the virus-- so food workers, things along those lines.

When do we start to see that kind of cascade into the greater economy-- white collar jobs, things along those lines, construction jobs perhaps? We just heard that Mayor de Blasio was thinking about shutting down construction sites in New York City. When does it start to move into the greater economy?

BILL RODGERS: Well, I think the answer to that probably is, when does this virus dissipate? Because if the virus continues at its pace-- and you know, you're hearing Governor Cuomo on his daily briefings about that things are still progressing, the ability to then for us to open the broader economy back up where you have the people in the professional business services who you're talking about, they're not only working at home but they're back in their office-- that's really at the whim of what's going to happen with this virus.

But the good news, right, is you're putting money in warehouse transportation workers. You're putting money in the hands of retail, of accommodations, of entertainment. And these people are typically your lowest-paid individuals and families in the nation. But they are hardworking Americans. And so doing this will help to, obviously, stimulate, but also really just prop up.

I think right now, this isn't about stimulus. This is about propping up, propping up families. And those broader sort of white collar type jobs that you're referring to, many of these people have other additional resources.

One of the concerns or fears I have will be those individuals you're referring to starting to go into their 401(k)s, starting to go into retirement. And I think if that happens, we may even have to consider more of a stimulus or support further up the income scale.

JULIE HYMAN: Right. Bill Rogers, it's always good to see you. Stay well my friend.

BILL RODGERS: You too, please.

JULIE HYMAN: --labor economist and professor at Rutgers University. Thank you.