Betsey Stevenson Testimony on Needed Economic Policy for Phase Two of the COVID Recession

In March and April, the economy laid off 22 million people. In a normal recession, it takes time for businesses to realize demand has fallen and there is a lag between the slowdown and layoffs. COVID meant the slowdown and layoffs were coincident. This has likely caused us to underestimate the damage this will do.

The good news is that nearly 11 million of those people have been hired back.

The bad news is that we're now entering the normal phase of a recession: the "I guess business is not picking back up to normal levels so we're going to have to lay off more people now" phase. Without fiscal stimulus, the economy will destroy millions more jobs before year end, this on top of the 13 million people already unemployed.

A layoff of 2 months is frightening; a layoff of a year or more is devastating.

This testimony from the University of Michigan's Betsey Stevenson is really illuminating about the stakes for policy over the next few months.

Excerpt:

"We cannot afford for you to ignore the needs of our children. If the needs of children—from hunger, to care, to education—are not the most important priority in your next bill then I would urge you to reexamine your priorities."

Her full testimony is here:

https://waysandmeans.house.gov/sites/democrats.waysandmeans.house.gov/files/documents/BetseyStevensonTestimony.pdf