Call it economic whiplash.
The U.S. Labor Department report released this morning shows the economy lost a breathtaking 20.5 million jobs in April, shoving unemployment up to 14.7%, the highest since the Great Depression.
In other words, the U.S. has gone from a 50-year unemployment low, to a 60-year unemployment high. And State Comptroller Tom DiNapoli says it happened fast.
“In March, we were still in a strong economy and within a matter of weeks – and the April numbers show it – everything collapsed,” he told Spectrum News.
But not everyone is feeling the collapse equally.
The unemployment report indicates that the brunt of the pain is being born by low-income New Yorkers, communities of color, and those without a college degree.
“What that underscores is that those that are probably least able to afford job loss are those impacted the most,” said DiNapoli.
The news gets worse. The social safety net that low income people rely on during tough times is fraying.
Taxes pay for social services. But when millions of people are out of work, they’re not paying income taxes. When the economy is shuttered, even those with jobs aren’t shopping, which means sales taxes revenues are also down.
Consequently, all of this unemployment is socking it to the state’s bottom line, DiNapoli warned.
“We are going to have a major cash flow crunch for various reasons. Under the provision of the state budget, if we don’t have the revenue, the state cannot make its spending commitments and there will be cuts to not only state agencies, but in local assistance,” he said. “That means cuts to our cities, our counties, our towns, our villages, our school districts.”
This, in turn, means furloughs, and layoffs of police, fire and teachers. It’s a painful cycle that we will soon experience unless, DiNapoli says, the next federal stimulus package includes money for states and localities.
“We can’t do it without help from Washington. You can’t just cut your way out, borrow your way out, tax your way out right now,” he said. “Washington has revenue sources, obviously, that we don’t have at the state and local level. We need their help.”
Governor Andrew Cuomo has repeatedly said the same thing during his daily press briefings.
“It’s not red or blue; it’s red, white, and blue. This coronavirus doesn’t pick Democrats or Republicans. It doesn’t kill Democrats or Republicans, it kills Americans,” Cuomo said on May 5.
“If we don’t get the money from Washington, we can’t fund schools at the rate we want to fund them. We are in dire financial need.”
The breadth of today’s unemployment report has sparked talk in Washington of another round of direct stimulus payments to Americans.