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2.5 Million Jobs Were Created In May, But The Economy Is Still Suffering

Over 30 million Americans have lost their jobs during the first two months of the Covid-19 pandemic. The month of May, however, offered a glimmer of hope, as the unemployment rate decreased from 14.7% to 13.3%, and 2.5 million individuals regained some sort of full-time employment. 

In April alone 20 million Americans lost their jobs due to Covid-19 related reasons. Originally, economists were predicting the unemployment rate to increase to 20%, and while those experts have so far been refuted, the economic damage that’s already been done is vast. 

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As all 50 states begin easing their quarantine restrictions, more individuals have been able to return to work, or find new work more easily. Within May, 1.2 million new jobs were created, and the weekly rate of job loss went from 6.6 million in April, to 1.9 million just last week. Obviously, 1.9 million jobs lost per week is still a shocking amount of individuals losing their source of income during a global pandemic, however, during a time of such economic/political unrest, it’s better than nothing. 

“America is now witnessing a shift from temporary to permanent layoffs. The US pandemic initially hit the leisure and hospitality industry hardest, now the damage is spreading further, states are running out of cash and companies are burning through their stimulus checks. The longer this goes on, the bigger the chance of permanent consequences. Without further help from Washington local governments and businesses will have to make some very uncomfortable decisions,” says Jason Reed, a professor of finance at the University of Notre Dame’s Mendoza College of Business.

The unemployment numbers that we see everyday on the news don’t even give the full scope of the situation. In a broader measure of unemployment that specifically counts workers who have either given up looking for a job, or are currently part-time looking for a full-time job, the numbers show even more historical numbers. The specific measure is known as U6 and the rate of unemployment went from 7% to 21.2% throughout the entire pandemic. 

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“The sheer volume, size and rapidity of losses is something I have never seen before. It took the US 16 months to reach a peak of 10% unemployment in the last recession. I’m hopeful the job market can start recovering in the months ahead, but worry a lack of political action could lead to deeper losses,” William Rodgers, the former chief economist at the US Department of Labor, who also has been studying the jobs report for 20 years. 

The federal government has since signed off on $1.6 trillion in funding to help the economic impact of Covid-19, however, a majority of that fund has already been spent. Rodgers also emphasized that the closing of more businesses is what’s going to continue to hit the economy the hardest, especially if we receive a second wave of cases amid all the protests that have been occurring throughout the past month. 

Congress is discussing another aid package that would distribute $3 trillion to American citizens, however, the Republican senators are resisting that plan. However, with the future of this pandemic and its continuous economic impact still unknown, the people need the government on their side now more than ever.

Remember, if you’re planning on attending a protest within the coming weeks, continue to practice social distancing as much as possible, and wear a mask at all times. Wash your hands, clothes, and body the second you get home, and keep listening to your healthcare officials.

Chess

Britain and the E.U. Reach Tentative Brexit Deal

On Thursday, the European Union and Britain announced that they had reached an agreement for Brexit, just two weeks in advance of the October 31st deadline for departing the organization. Britain’s decision to withdraw from the multi-country alliance, the result of a 2016 referendum in which a narrow majority of British citizens voted to leave, has plunged the country into several years of chaos and intragovernmental conflict, as various parties within the country’s Parliament argued vehemently about how to conduct the extraordinarily complicated process of withdrawal. Tensions have only continued to escalate within the country’s government since they promised to implement the results of the referendum, eventually leading to the election of the highly controversial Boris Johnson to Prime Minister, who campaigned on a promise to “get Brexit done,” no matter what. 

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While all possible scenarios for Brexit are forecasted to have a strongly negative effect on the European economy, with the country’s decision to leave having already led to an economic downturn, the no-deal Brexit scenario is widely considered the worst possible outcome. As such, Johnson’s pledge to leave the EU by October 31st, with or without a deal, has raised alarms within the government and the passing of legislation requiring the Prime Minister to reach an agreement with the EU before leaving. With today’s news, a major hurdle for Boris Johnson has been overcome, though the deal is not official until it passes a vote in Parliament. As previous proposed deals have failed in spectacular fashion to receive a necessary majority vote from members of Parliament, leading to the resignation of then-Prime Minister Theresa May, the future of Brexit is by no means certain.

That being said, the new deal seeks to account for many of the complaints that members of Parliament had about Theresa May’s deal which led to its failure to get through Parliament. Under the revised deal, Northern Ireland will be a part of the U.K. customs territory, instead of being in a separate customs area from the rest of the country, which lawmakers cited as a reason for rejecting the previous deal. The new deal gives a degree of “democratic consent” to Northern Ireland, a part of the U.K. that voted overwhelmingly to stay in the EU, as the Northern Ireland assembly will be called to vote on whether to continue this arrangement in the future. 

As the potentially disastrous economic consequences of Brexit become more immediate, however, some U.K. lawmakers are instead calling for a second referendum to hopefully undo the decision to leave the E.U. The Labour party, which opposes the Conservative party led by Johnson, is expected to attempt to force another referendum, under the reasoning that having witnessed several years of governmental chaos has caused a majority of the country to favor staying in the European Union. Public opinion polling has shown that a plurality of U.K. citizens believe, in hindsight, that the decision to leave the E.U. was a mistake, and a second referendum could offer these citizens an opportunity to undo the chaotic results of the previous vote. 

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However, another referendum is unlikely to be conducted before a Parliament vote on whether to accept Johnson’s deal, which is due to be held on Saturday. Though it is difficult to predict the results of Saturday’s vote, members of the opposition party have already publicly criticized the new deal, calling it “a far worse deal than Theresa May’s deal” and raising concerns about its impact on workers’ rights, environmental standards and consumer protection. The U.K.’s membership in the E.U. has long been deeply integrated into the country’s system of government, and as such, concerns about withdrawal apply not only to the European economy but to the impact it could have on the rights and wellbeing of British citizens.