Economy Still Ailing, "Tremendous Amount Of Hurt" To Come
A new analysis by the Economic Policy Institute finds that despite positive signs of the recession leveling off, folks should not be too heartened by talk of "green shoots."
EPI president and report author Larry Mishel told the Huffington Post that there will still be "high and prolonged unemployment that's going to have a tremendous amount of hurt."
Mishel pointed out that fears that, without a stimulus package, unemployment would reach almost 10 percent have become reality -- even though the $787 billion package is in place. "What was likely to occur without the stimulus is likely to occur with the stimulus," he said.
Mishel's slideshow presentation shows that although the current downturn started at a lower unemployment rate than those past, it has seen a faster increase in job losses and unemployment. While unemployment rose 3.6 percent in 16 months during the 1980s recession, the current recession has featured a four percent jump in the same amount of time.
"Given what is ahead, it is not clear how families will be able to survive this prolonged and deep recession," the report says. "We cannot act as if these are normal times, and we must find ways to provide relief. After all, not everybody receives unemployment insurance (which eventually runs out anyway), there are no significant safety nets for men, and Temporary Assistance for Needy Families (TANF) is weak and time-limited. We will definitely need to provide more stimulus in order to reduce unemployment and provide public service employment in hard hit areas."
A report released May 9 by the Center for Economic and Policy Research found that the stimulus package would be severely blunted by unexpectedly large state budget shortfalls. That report also called for additional stimulus.
Mishel noted that unemployment and underemployment do not account for stagnant wages, a significant drag.
"This issue is not behind us," Mishel said. "We still have to deal with the fact that there's going to be a lot of people who are going to be really struggling to get by, especially low-income, minority communities, but really tons of people."
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