Bill Rogers III, National Academy of Social Insurance Board Chair and Professor, Chief Economist at the Heldrich Center, Rutgers University, joins Yahoo Finance's Kristin Myers to discuss Biden's stimulus proposal.
KRISTIN MYERS: It's time now for our Funding our Future segment. President-elect Biden is finalizing his plans for another round of coronavirus relief, looking to put together a bipartisan deal. So let's chat this now with Bill Rodgers, Board Chair at the National Academy of Social Insurance and Professor and Chief Economist at the Heldrich Center at Rutgers University. So professor let's just start with how badly this stimulus, additional stimulus really is needed now. The President-elect Biden floating out $2,000 individual stimulus checks after the recent $600 stimulus checks were passed.
BILL ROGERS: Yes so the jobs report issued by the Bureau of Labor Statistics last Friday confirmed that the economy, the labor market has been slowing down. That we had prior to the December numbers, we had about five to six months, consecutive months where we saw job creation in the positive realm, but it was getting smaller, and smaller, and smaller, and smaller and then with the Friday report for December, the numbers showed actually a decline, a contraction in growth and that was number one.
And then number two is just simply fact that the Dr. Faucis of the world and other public health officials are saying that over the next two or three months are going to be a real big challenge with regards to fighting the virus and that's, we've been shown to have adverse impacts on job creation and on economic growth. So we were slowing, plus a worsening in coronavirus, which is going to have to force state and local governments to put more constraints on the economy or on economic consumption.
So that's the stage that we're set for why we need why we need an additional piece.
KRISTIN MYERS: Looking forward as we saw a drop of 140,000 jobs in that jobs report, we were expecting at least economists were expecting an addition of 50,000 jobs for the month of December. So a really disturbing trend that we saw there, a reversal of what we had seen at least in the labor market recovering, what are you anticipating over the next two months because this might underscore just how badly this stimulus is needed. And you touched on it just a little bit but where do you see the labor market going over the month of January, February, perhaps even March of course, as we hear that the pandemic is going to get worse through those next three months?
BILL ROGERS: Yeah so you know, back in the summer people were hoping for what we were calling a V shaped recovery, that is the sharp downturn in April and May and then a rapid recovery. But what we're seeing now, or what I think we're seeing now is what people are calling a K style recovery, and that is if you're able to work at home as the report last Friday showed, you're able to continue with your job in most cases. The share of people saying that they were working at home because of COVID actually jumped in the previous month, while you saw the contractions in employment, in leisure and hospitality, retail, these are the areas that have been hit hardest because of the high touch component that's required to do those jobs.
So right now it looks like we're going to see a K style recovery if we, and when we get this new additional tranche of money that the Biden group is going to be lobbying for. That will continue to lead to the improvement for those who have been benefiting, but it's going to help to buoy, and help to restore economic growth and opportunity for those who have been disadvantaged dramatically.
KRISTIN MYERS: I'm really glad that you mentioned that K shaped recovery piece Professor, because I'm curious to know if you think that because so many Americans right now aren't just surviving, but frankly are thriving, they are doing incredibly well throughout this pandemic, if that has been part of the reason we have seen such stalling in terms of giving economic aid to so many Americans. It took nine months for this most recent economic aid to be passed. Who knows how long it'll take for another bipartisan package to get through Congress. Do you think that could be part of the reason why, that frankly, when you look around, depending on who you are in this country, you might look around and say, hey you know, not everyone is so badly hit, some people are doing OK.
BILL ROGERS: Yeah it's a tough call. I mean, I think there have been ebbs and flows on reporting where there was a period of time where you didn't know, people didn't know, it wasn't reported in widespread reports of all the families need to use food pantries or food banks. But then you had a period of time where those images started to be seen more, you had the period at the end of the year where the president basically hemmed and hawed about signing that piece of legislation, where it created a whole great deal of anxiety for those Americans who had been unemployed, and who were going to see those benefits dry up.
So yeah it requires conversation. It requires the media to really be showing and tell, and showing and presenting these images and as you all do. But other organizations have to do it and have to do it persistently to really educate the public that we have those two realities economy. That yes you have people doing well. You have the stock market doing well. But in terms of people, families who have incomes at or below $75,000, they either have expenses that exceed their income, or either they have very little cushions or very tight margins.
And so these are the families that we really, really have to be committed to helping, because if we can't help to grow their productivity, that's going to putting drag on economic growth not only today, but in the future because what we're also seeing is that youth unemployment, particularly those who are young college graduates, high school graduates, they have not been able to get good jobs. Their unemployment are still in excess of 15% to 16%, especially young minorities and so there's been ample evidence to show that when young people come into a recession and downturn, it not only affects their prospects today. It also affects their long term prospects, which will then have a drag on economic growth if we don't invest in them.
KRISTIN MYERS: Right. Professor Bill Rodgers, Chief Economist at the Heldrich Center at Rutgers University. Thanks so much for joining us today for our Funding our Future segment.
BILL ROGERS: Thanks. Thanks for having me.
KRISTIN MYERS: And funding future is an alliance of organizations dedicated to making a secure retirement possible for all Americans.