On election night, Democratic campaign consultants may have been wondering, “Where did all these voters come from?” But unless the next Congress sets a legislative course over the next few months, Speaker of the House Nancy Pelosi may soon be wondering, “Where did all the voters go?”
The incoming Biden administration will need to navigate an extremely rough economic path ahead. Congress has struggled to reach an agreement for another round of stimulus to provide emergency relief for families and businesses. Now they must act before the “dark winter” ahead further deteriorates the economic recovery.
Missy Plohr-Memming is senior vice president of MetLife’s Group Benefits National Accounts Sales organization, which provides employee benefits solutions to U.S. based employers with 5,000 or more employees. In this role, Plohr-Memming oversees sales strategy and key growth initiatives to drive top-and bottom-line financial results.
The 15 bankers will be honored for their exemplary accomplishments at The Most Powerful Women in Banking: Next Awards dinner on October 25th, part of the weeklong celebration for the 20th anniversary of The Most Powerful Women in Banking
William Dunkelberg is professor emeritus of economics in the College of Liberal Arts, Temple University, where he served as dean of the School of Business and Management from 1987 through 1994 and as Director of the Center for the Advancement and Study of Entrepreneurship. He currently serves as chief economist for the National Federation of Independent Business. His prior appointments were at the Krannert Graduate School of Management, Purdue University, the Graduate School of Business, Stanford University and the Survey Research Center at the University of Michigan. He has BA, MA and Ph.D. degrees in economics from the University of Michigan. Dunkelberg is a nationally known authority on small business, entrepreneurship, consumer credit and government policy. He has appeared on CNBC, Bloomberg, Fox, CNN, MSNBC, the ABC, CBS and NBC Evening News programs, "Good Morning America" and numerous local news and business TV and radio shows. He is frequently quoted in major news publications including The Wall Street Journal, Forbes, Bloomberg Business Week, The New York Times, U.S. News & World Report and USA Today, and serves on the economic forecasting panels for USA Today and Bloomberg and as an economic advisor to ABC News. He is the author or co-author of numerous books and articles.
Gross domestic product, the broadest measure of goods and services produced across the economy, decreased at an annual rate of 32.9 percent in the second quarter of 2020, followed by a surged of 33.1 percent in the third quarter, in part due to earlier rounds of fiscal stimulus when businesses were offered Economic Injury Disaster Loans and forgivable Paycheck Protection Program loans, and individuals received direct payments and extended unemployment benefits.
Economic experts believe the current surge is not enough to stop continued losses incurred by various segments of economy.
“While the strong bounce back in activity from the initial devastation of COVID-19 was heartening, the recovery thus far has been highly uneven, and the path ahead is highly uncertain,” said Federal Reserve Governor Lael Brainard in a speech last month at the Society of Professional Economists annual online conference.
This highly uneven and uncertain bounce indicates the prospect of a K-shaped recovery, where some sectors continue to recover, while others see a steady decline.
The new stimulus package must focus on the sectors facing difficulties ahead to avoid colossal damage and massive layoffs.
According to the U.S. Chamber of Commerce, approximately 4 million small businesses — 13 percent of America’s 31 million smallest employers — have now exhausted their PPP loans, and many face permanent closure without further assistance.
According to the National Restaurant Association, the restaurant industry will lose $240 billion. U.S airlines may be forced to furlough 75,000 pilots, flight attendants, mechanics and other workers by the end of 2020 if Congress doesn’t act.
States and municipalities are now on verge of extreme shortfalls due to declines in tax revenues and rises in additional costs. Local governments that fund and operate public school systems will need more funding. “The average school district will face $1.8 million, or $485 per student, in additional costs for disinfectants, personal protective equipment and other preparations to bring students into classrooms this year,” according to the Association of School Business Officials.
The Federal Reserve’s Survey of Consumer Finances indicates that cash-strained households will continue to suffer as a result of continued unemployment and reduced working hours. The CARES Act did support these households either through direct payments or enhanced unemployment benefits this year, but the financial security of these households will depend on whether unemployment benefits will be extended or supplemented next year.
Therefore, it is imperative for Congress to ensure that the recovery reaches those who have been disproportionately affected. A targeted fiscal support can turn a K-shaped recovery into a broad-based, inclusive recovery to eliminate shortfalls in employment and provide a better outcome overall.
