The passage of the American Rescue Plan (ARP) is a watershed moment for state and local governments. It is an opportunity to undo much of the damage caused by the COVID-19 pandemic and begin to address some of the long-standing inadequacies and inequities caused by decades of disinvestment in public services. As our colleague Josh Bivens notes, the bill’s $350 billion in aid to state and local governments will critically help many localities fill in for revenue losses, stem budget cuts, and respond—with important flexibility over the next few years—to massively increased fiscal demands caused by the pandemic.

Although revenue losses in some states were not as dire as predicted early in the pandemic, state and local governments across the country have, nevertheless, already made massive cuts to their budgets and staffs. These cuts have serious implications for the health of local economies and the quality of life in those communities. In this piece, we document the losses that have already occurred in state and local government workforces and take a closer look at who these workers are and what they do. We also discuss the opportunity that policymakers now have to truly “build back better” and what that could mean for communities throughout the country that were struggling long before the coronavirus appeared. In particular, we show that:

• State and local job cuts during the COVID-19 pandemic have been unprecedented and widespread.
• Most state and local government employees work in education (50.4%). This workforce also provides public services that keep communities healthy and safe.
• Women and Black workers are disproportionately represented in state and local government jobs. Women make up 59.6% of this workforce, compared with 46.6% of the private sector. Black women account for 8.7% of state and local government workers, compared with 6.4% of private-sector workers.
• The American Rescue Plan provides an opportunity for state and local governments to work toward addressing racial inequities and expanding public supports in their communities.

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One year ago last week—the week ending March 7, 2020—was the final week of normal unemployment insurance (UI) claims before the COVID recession. That week, there were 211,000 initial UI claims. The week after that, it jumped to 282,000. From there, it skyrocketed into the millions.

Last week—the week ending March 6, 2021—another 1.2 million people applied for UI. This included 712,000 people who applied for regular state UI and 478,000 who applied for Pandemic Unemployment Assistance (PUA)—the federal program for workers who are not eligible for regular unemployment insurance, like gig workers. The 1.2 million who applied for UI last week was unchanged from the prior week. The four-week moving average of total initial claims was also unchanged.

Last week was the 51st straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were greater than the 10th-worst week of the Great Recession.)

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The union election underway at an Amazon fulfillment center in Bessemer, Alabama, has caught national attention because of how significant a win would be for workers in the South and across the country. Even President Biden has weighed in on the importance of unions, proclaiming in a new video that workers should have a free choice to organize without interference or threats from their employer—a presidential endorsement that is without precedent in our lifetimes. This week, the House of Representatives is scheduled to debate and presumably pass comprehensive legislation—the Protecting the Right to Organize (PRO) Act—to strengthen workers’ ability to join together and form unions to negotiate for better pay, safety protections, and fairness on the job.

This newfound attention to the importance of workers having collective power to bargain with their employers is welcome, but it is long overdue—more than 50 years overdue.

The fact is, Amazon is using tactics to fight its workers in Bessemer, Alabama—thinly veiled threats, mandatory meetings in which management rails against the union, hiring third-party professional union busters—that are standard fare in the employer playbook, and have been for decades. Employers fully realize and take advantage of fundamental, structural weaknesses in our federal labor law that is supposed to protect and promote workers’ freedom to organize unions.

We recently co-authored a paper that shows, by the late 1960s and early 1970s, employers had learned how to exploit the weaknesses in the National Labor Relations Act to block union organizing. Employers realized the law has no teeth—it literally has no monetary penalties against employers who illegally fire union activists or otherwise interfere with workers’ rights. Under the guise of “free speech,” employers are allowed to hold one-sided “captive audience” meetings, where management criticizes and lobbies against forming a union, often predicting layoffs and strikes if workers unionize. Yet the union isn’t allowed in the room, and companies frequently forbid workers from speaking up or exclude pro-union workers from the meeting. Employers routinely bend and break the law. A recent Economic Policy Institute report found that in four out of 10 organizing efforts, workers have to file charges to try to stop their bosses’ illegal activity. In up to a third of elections, employers are charged with illegally firing union supporters.

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Another 1.2 million people applied for unemployment insurance (UI) benefits last week, the last week of February. This included 745,000 people who applied for regular state UI and 437,000 who applied for Pandemic Unemployment Assistance (PUA)—the federal program for workers who are not eligible for regular unemployment insurance, like gig workers.

The 1.2 million who applied for UI last week was roughly the same as the prior week (an increase of 18,000). The four-week moving average of total initial claims was unchanged.

Last week was the 50th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week would have been higher than the sixth-worst week of the Great Recession.)

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On Friday, the Bureau of Labor Statistics (BLS) will release its latest jobs report on the state of the labor market for February 2021, exactly one year since the labor market peak before the pandemic recession hit. Overall, the labor market is down 9.9 million jobs since February 2020. And if we count how many jobs might have been created if the recession had not hit—a more appropriate counterfactual for the current hole we are in might be average job growth over the 12 months before the recession (202,000)—we are now short 12.1 million jobs since February 2020.

In this jobs day preview post, I remind readers which sectors are still experiencing the greatest shortfalls in jobs, which demographic groups have been hardest hit, and which metrics we should continue to ignore in this unusual recession.

Leisure and hospitality workers remain the hardest hit in the pandemic recession, with a 3.9 million job shortfall since February 2020 (as shown in Figure A). These losses are particularly devastating for leisure and hospitality workers and their families because they are among the lowest-paid workers in the U.S. economy.

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The recent United Kingdom Supreme Court ruling that Uber drivers are employees, and not entrepreneurs or independent contractors, is noteworthy for many reasons. One is that the underlying Employment Tribunal judgment that it affirmed provides a deep dive into the realities of Uber driving that obliterates the many myths Uber tells about its employment arrangements—and does so in a joyful, humorous way. It is a must read.

A second reason is that the ruling points to the need for two critical items that Tanya Goldman and David Weil proposed to combat misclassification of workers as independent contractors. First, judging whether a worker is an employee or not should not be limited to the issue of who “controls” the work, an analysis that is too easily manipulated in order to get a wrong result. Rather, one should include an analysis of whether the worker has a true opportunity to be an entrepreneur—actually build a business and not just the limited freedom of choosing their hours and work location.

In addition, Uber’s response to the ruling was—predictably—that it has already changed its terms, so the ruling no longer applies. But with these changes, drivers are still denied employment status. As long as the employer-determined status quo remains—and until endless court cases and appeals are exhausted—then the workers will never really be able to secure their rights through court challenges. To change this, Goldman and Weil propose “there should be a presumption of an employment relationship the putative employer must rebut.” Let the employer prove someone is a contractor, and until the employer has done so the worker has full employment rights (right to a union, to be paid minimum wage, etc.) and access to social insurance (unemployment insurance, workers’ compensation, paid sick days, etc.).

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When it was passed in 1935, the National Labor Relations Act declared that its purpose was to promote the practice of collective bargaining, where workers and their union sit down with their employer to negotiate over wages, safety, fairness, and other important issues. But over time, this promise has become hollow because weaknesses in the law have been exploited by employers and the courts to undermine workers’ bargaining power. Here are six ways the Protecting the Right to Organize (PRO) Act helps to level the playing field and restore workers’ bargaining power:

1. The PRO Act has a process for reaching a first collective bargaining agreement. When workers first form a union, too often employers drag out the bargaining process and avoid reaching an initial agreement, because there are no monetary penalties in the law for bad faith bargaining. A year after forming their union, more than half of all workers do not yet have an initial bargaining agreement with their employer. This leads to worker frustration, which employers exploit to undermine the new union. The PRO Act addresses this problem by establishing a mediation and arbitration process for reaching an initial agreement.
2. The PRO Act requires employers to continue bargaining instead of taking unilateral action. Current law gives employers too much power to force its position on workers by unilaterally declaring that the parties have reached an impasse in bargaining and then either locking out workers—preventing them from working and getting paid—or implementing the employer’s proposals. This power, either alone or combined with the restrictions on workers’ ability to strike or put other economic pressure on the employer, puts employers in the driver’s seat in bargaining and greatly undermines workers’ bargaining power. To address this problem, the PRO Act prohibits employers from declaring impasse and locking out workers—a so-called “offensive lockout.” And the PRO Act requires employers to maintain the status quo on wages and benefits during bargaining—no more unilateral changes to put pressure on workers to cave in to the employer’s demands.
3. The PRO Act gets the economic players to the bargaining table. Under current law, staffing firms, contractors, temporary agencies, and other employers try to evade their responsibility to bargain with workers and their union even when they have power over workers’ health and safety, schedules, wages, and other key issues. This leaves workers without the real economic players at the bargaining table. The PRO Act fixes this problem by adopting a strong joint-employer standard that will bring employers with power over wages or working conditions to the bargaining table.
4. The PRO Act eliminates the ban on so-called “secondary” activity. In order to win a wage increase, a voice on new technology, safety improvements, or other bargaining priorities, workers need leverage to put economic pressure on their employer to accept their demands. But current law robs workers of their leverage in many ways, including a prohibition on so-called “secondary” activity that was enacted by Congress in 1947. In fact, current law instructs the National Labor Relations Board (NLRB) to give top priority to shutting down so-called “secondary” activity. These cases are given even higher priority than cases alleging that employers have illegally fired union activists, and statistics show this has in fact been the case. For example, in the first 12 years after the restriction on secondary activity was first implemented, the number of injunction proceedings against unions for engaging in illegal secondary activity skyrocketed by 1,188%, while virtually no injunction proceedings were brought against employers for violating workers’ rights. This restriction on secondary activity forbids workers from picketing or otherwise putting pressure on so-called “neutral” companies other than their employer, even if those companies could influence their employer’s practices by, for example, withholding purchases until workers and their employer reach a collective bargaining agreement. The restriction has been interpreted so broadly as to prohibit janitors from picketing a building management company over sexual harassment by its janitorial subcontractor. The Trump NLRB General Counsel unsuccessfully tried to argue that floating an inflatable Scabby the Rat balloon at a labor protest was illegal secondary activity, even though courts have consistently said such protests are protected by the First Amendment. Given the prevalence of subcontracting and the interrelated nature of business relationships, the ban on secondary activity does not reflect the realities of today’s business structures. It deprives workers of an important tool in the bargaining process and unfairly tips the power balance to employers. To correct this imbalance, the PRO Act repeals the ban on secondary activity.
5. The PRO Act prohibits employers from permanently replacing strikers. Workers’ ultimate leverage in bargaining is to withhold their labor—in other words, to strike. The law technically protects workers from being fired when they go on a lawful strike, but this right has been gutted by a 1938 decision by the U.S. Supreme Court that stated that employers can permanently replace, i.e., terminate, workers who are on strike over economic issues. Despite a slight increase in strike activity last year, the number of strikes continues to be at a historic low in part because of this weakness in the law. The PRO Act restores the right to strike by prohibiting employers from permanently replacing economic strikers.
6. The PRO Act overrides state “right-to-work” laws that weaken unions. So-called right-to-work laws have nothing to do with getting or keeping a job—they are about weakening workers’ collective voice on the job. Under the law, unions are required to represent all workers protected by the collective bargaining agreement, but so-called right-to-work laws prohibit unions and employers from voluntarily agreeing that all workers covered and protected by the agreement should share in the costs of union representation through union dues or fees. This creates a “free rider” problem, where workers get the benefits of unionization but do not contribute toward the costs, creating a financial drain on unions. The PRO Act overrides state right-to-work laws and allows unions and employers to negotiate fair share agreements whereby all workers covered by the collective bargaining agreement share in the cost of representation.

Read EPI’S fact sheet on why workers need the PRO Act.

Another 1.2 million people applied for unemployment insurance (UI) benefits last week, including 730,000 people who applied for regular state UI and 451,000 who applied for Pandemic Unemployment Assistance (PUA)—the federal program for workers who are not eligible for regular unemployment insurance, like gig workers.

The 1.2 million who applied for UI last week was a decrease of 172,000 from the prior week, reversing last week’s increase of 164,000. The four-week moving average of total initial claims was roughly unchanged (a slight decline of 8,500).

Last week was the 49th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were roughly the same as the ninth-worst week of the Great Recession.)

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This morning, the House Oversight Committee will hold its first hearing on the U.S. Postal Service since Democrats gained control of the presidency and both houses of Congress. Committee members will have the opportunity to question Postmaster General Louis DeJoy, who in his short tenure has severely damaged the Postal Service’s reputation for timely service.

(Related: REPORT The War Against the Postal Service: Postal services should be expanded for the public good, not diminished by special interests.)

DeJoy, a former logistics executive who last year tussled with a federal judge about mail delays, may need to be reminded that he serves the public. USPS board vacancies give President Biden the opportunity to install a Democratic majority on the board this year and potentially oust DeJoy—though this would take some wrangling. The prospect of a newly configured board may make DeJoy more cooperative than he was in the lead-up to the election, when former President Trump planted fears, which mail slowdowns under DeJoy seemed to confirm, that voting by mail was iffy.

In the end, concerns that ballots wouldn’t be delivered in time didn’t materialize. But millions unnecessarily put their health at risk to vote in person during a deadly pandemic. And Trump’s attacks on mail voting emboldened Republicans in their efforts to limit absentee voting to red state seniors and other groups who tend to vote Republican.

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Another 1.4 million people applied for unemployment insurance (UI) benefits last week, including 861,000 people who applied for regular state UI and 516,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.4 million who applied for UI last week was an increase of 187,000 from the prior week, mostly due to an unexpected increase in PUA—the federal program for workers who are not eligible for regular unemployment insurance, like gig workers. The surge in PUA was due entirely to large increase in PUA claims in Ohio, which may be tied to fraudulent filings in the state. The four-week moving average of total initial claims rose by 21,000.

Last week was the 48th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still greater than the second-worst week of the Great Recession.)

Figure A shows continuing claims in all programs over time (the latest data for this are for January 30th). Continuing claims are currently more than 16 million above where they were a year ago. Further, there are 25.5 million workers—15.0% of the workforce—who were either unemployed, otherwise out of work because of COVID-19, or had seen a drop in hours and pay because of the pandemic.

The December 11-week extensions of PEUC and PUA just kick the can down the road—they are not long enough. Congress must pass further extensions well before mid-March, or millions will exhaust benefits at that time, when the virus is still rampant and the labor market is still weak. Roughly $2 trillion in relief and recovery is crucial to keep millions of families afloat.

Another 1.1 million people applied for unemployment insurance (UI) benefits last week, including 793,000 people who applied for regular state UI and 335,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.1 million who applied for UI last week was roughly unchanged from the prior week (down 53,000). The four-week moving average of total claims was also flat (down 15,000). Total initial claims are roughly where they were in mid-October.

Last week was the 47th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still greater than the third-worst week of the Great Recession.)

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Economist Larry Summers raised fears today that the Biden administration’s economic rescue plan might go too far, leading to economic overheating or squandering political and economic space for long-run reforms down the road. Neither of these fears are very compelling.

On the first–the danger of economic overheating–there’s not much more to add to what I and several others have already said on this: The U.S. economy has run far too-cool for decades, and this has stunted growth and deprived millions of potential job opportunities and tens of millions of potential opportunities for faster pay raises. Frequently, those worried about overheating cite current estimates from the Congressional Budget Office (CBO) of the “output gap”—the gap between income generated in today’s economy and what could be generated (or potential output) if there was no downward pressure on spending by households, businesses, and governments (aggregate demand). These current CBO estimates look relatively small compared to the Biden rescue plan’s fiscal support. But, these current estimates are almost certainly too-small. To provide just one piece of evidence—these estimates suggest that the economy was running above potential output in 2019 before COVID-19struck. But there was no evidence of overheating that year—price inflation was tame and wage growth actually decelerated.

If the vaccines take hold and there is a significant relaxation of social distancing measures in the coming year, the economic relief we’ve provided so far through this crisis and the Biden plan could combine to see the economy spring to life and generate a recovery far faster than what we’ve seen in the past few recessions. If this happens, and if the unemployment rate falls far beneath what it was in the pre-COVID period and stays below this for a few years, this will be an affirmatively good thing, not something to fear.Read more

On Friday, the Bureau of Labor Statistics (BLS) will release its latest jobs report on the state of the labor market for January 2021. The pandemic recession has caused immense damage to the health and economic well-being of millions of people for over 10 months. The economic pain easily extends to nearly 27 million workers in the economy today, and that doesn’t include those who had lost their jobs and regained employment but got behind on their bills or those who lost loved ones and providers to illness. It is imperative that policymakers act now at the scale of the problem.

Now that the economic losses have dragged on for this long, it’s important to consider the job deficit in light of an appropriate counterfactual. The employment losses in March and April totaled 22.2 million, while the economy gained 12.5 million jobs between May and November. In the figure below, note the significant slow down in job growth in each successive month since June. Then, in December, the U.S. economy experienced a loss of 140,000 jobs. Given low actual seasonal hiring in the pandemic, seasonal adjustments made the December numbers look worse than they really were and will make the January numbers look better than they were. The average job change in December and January will provide a better sense of current labor market momentum. Setting that issue aside, it’s clear that the labor market was down 9.8 million jobs between February and December.Read more

Another 1.1 million people applied for unemployment insurance (UI) benefits last week, including 779,000 people who applied for regular state UI and 349,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.1 million who applied for UI last week was a decrease of 88,000 from the prior week, but the four-week moving average of total initial claims ticked up by 51,000—back to where it was in mid-October.

Last week was the 46th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still greater than the third-worst week of the Great Recession.) I should note that throughout this post I use seasonally adjusted data where I can, but for comparisons to the Great Recession I use not-seasonally-adjusted data, since the Department of Labor (DOL)’s improved seasonal adjustments aren’t available before the week ending August 29, 2020.

Most states provide just 26 weeks of regular benefits, meaning many workers are exhausting their regular state UI benefits. In the most recent data (the week ending January 23), continuing claims for regular state benefits dropped by 193,000. After a worker exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 24 weeks of regular state UI (the December COVID-19 relief bill increased the number of weeks of PEUC eligibility by 11, from 13 to 24).Read more

The prolonged school lockdowns that, starting in early spring of 2020, dismantled children’s routines, including normal school days, also blocked their access to the basic supports that schools provide—including organized recreation, and, of course, the face-to-face contact with teachers and friends that is fundamental to child development. It thus should be no surprise that the pandemic has not only led to reduced student performance, on average, but also stretched to the limit children’s social and emotional wellbeing.

What, in education policy and practice, we call “social and emotional learning” (SEL) has long been known to be important for student development and academic success, but the pandemic has emphasized the need to elevate its importance. Indeed, as the pandemic unfolded, it was clear that SEL, or children’s “patterns of thoughts, feelings, and behaviors,” are at least as critical as other traditional academic competencies. We saw that empathy, resilience, and the ability to cope with anxiety, turned out to have major impacts on children’s daily lives, and must be emphasized along with algebra, history, social sciences, or foreign languages.

There is a threefold explanation—that contains the good, bad, and ugly— as to why and how the pandemic has highlighted that need, and as to which lessons education policy can learn as we move forward.

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This morning the Department of Labor (DOL) released the first official economic data collected during the Biden presidency—initial unemployment insurance claims from last week (well, half of last week was in the Biden presidency). What it shows is that Biden inherited an extremely weak labor market.

Another 1.3 million people applied for unemployment insurance (UI) benefits last week, including 847,000 people who applied for regular state UI and 427,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.3 million who applied for UI last week was a decrease of 87,000 from the prior week, but the four-week moving average of total initial claims ticked up by 45,000. The four-week moving average of total initial claims has risen back to roughly where it was in mid-October.

Last week was the 45th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still greater than the second-worst week of the Great Recession.) I should note that throughout this post I use seasonally adjusted data where I can, but for comparisons to the Great Recession I use not-seasonally-adjusted data, since DOL’s improved seasonal adjustments aren’t available before the week ending Aug. 29, 2020.

Most states provide just 26 weeks of regular benefits, meaning many workers are exhausting their regular state UI benefits. In the most recent data (the week ending Jan. 16), continuing claims for regular state benefits dropped by 203,000. After a worker exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 24 weeks of regular state UI (the December COVID-19 relief bill increased the number of weeks of PEUC eligibility by 11, from 13 to 24).

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This morning, the Department of Labor (DOL) released some of the last unemployment insurance (UI) claims data of the Trump era. That means this release helps us understand the economy President Biden just inherited. Here’s what it shows.

Another 1.3 million people applied for UI benefits last week, including 900,000 people who applied for regular state UI and 424,000 who applied for Pandemic Unemployment Assistance (PUA). The 1.3 million who applied for UI last week was an increase of 113,000 from the prior week. The increase underscores that layoffs are increasing as the virus surges. The four-week moving average of total initial claims is now back to where it was in mid-October.

Last week was the 44th straight week total initial claims were greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still greater than the worst week of the Great Recession.) I should note that throughout this post I use seasonally adjusted data where I can, but for comparisons to the Great Recession I use not-seasonally-adjusted data, since DOL’s improved seasonal adjustments aren’t available before the week ending August 29, 2020.

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