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The economic impact of Biden's COVID-19 relief plan

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Gbenga Ajilore, Center for American Progress Senior Economist, joined Yahoo Finance Live to discuss his outlook for the economy under Biden.

Video Transcript

SEANA SMITH: The first day of the Biden administration, three new Democratic senators are set to be sworn in. This, of course, will give Democrats control of the Senate. We want to bring in our next guest. We have Gbenga Ajilore. He is a senior economist for the Center for American Progress. And Gbenga, great to have you on the program. Dems controlling the Senate for the first time since 2014. Biden, of course, inheriting an economy that is struggling just a little bit. What do you think the Biden administration needs to do to get us on the right track?

GBENGA AJILORE: So, first and foremost thing that the Biden administration needs to do is tackle the virus. As the virus goes, the economy goes. And once they tackle that, so that's through continuing mask use, working on vaccine distribution. And once that gets-- they get a handle on that, then they start to worry about the economy and putting in some of the provisions to help boost people who have been struggling over the last year.

ZACK GUZMAN: And Gbenga, I mean, there's certain things that can be done, right, when we think about pushing and focusing in on the pandemic itself, which I think, just for starters, talking about it would be a good step in the right direction. But there are issues here outside of efforts control, which seem to be production constraints that are just facts here when we think about Pfizer and Moderna.

But also, a big issue that's not talked about too much here, the idea that maybe Americans might be a little bit hesitant to get the vaccine, when you look into that latter issue, is there more that could be done to maybe incentivize that that's maybe being overlooked right now?

GBENGA AJILORE: So that's one of the toughest things is we've talked a lot about issues with truth and facts and having, you know, mixed information. And so, a lot of it is having a consistent information flow from the federal government all the way down. That's going to help. Also, one of things that we've seen is the number of people not just celebrities, but politicians, who have been saying, I'm getting the vaccine, and just, like, publicizing those stories of people getting the vaccine both doses and being OK afterwards. And so, I think if people see a consistent message from on top, that's going to help in terms of convincing people to take the vaccine.

SEANA SMITH: And when we look at the COVID relief package, some are calling it a dream, saying the GOP, they're never going to get them on board. What do you think needs to get done? I guess, what does the economy need at this point? Is it the entire $1.9 trillion package, or could we get by with something a little bit smaller?

GBENGA AJILORE: We cannot get by with something smaller. We saw, you know, last year, when March, when the pandemic first hit, we had about $3 or $4 trillion in relief for the economy. And we saw that that worked. But we let it expire in August and then also in November. And then we saw in the jobs numbers and a lot of the economic indicators that we're falling behind, that the unemployment numbers are still high. Unemployment insurance claims are at historical highs.

And then, we saw in December, the jobs numbers, is that actually lost jobs. And so, one of those things that we can't talk about, you know, getting by, we really need to push and have a lot of stuff. So $1.9 trillion is going to be very important, especially in terms of what it includes. So things like state and local aid, which we haven't seen for months, expanding unemployment insurance to September, even maybe adding automatic stabilizers so that relief will, you know, will fall off when the economy does better.

So there's a lot of things because we are still struggling. A lot of people are hurting. We think about eviction notices, things like that, even though the moratorium is going on. So, one of the things you have to think about is that the economy is still struggling. And we need a lot of relief to do that to help it out.

ZACK GUZMAN: Yeah, and on the relief front, specifically trying to point this in, we had an earlier guest talking about the stimulus checks and how it does seem like that's an issue that Republicans are on board with that they would be in favor of those added stimulus checks. But when we think about the targeted approach with those, it's interesting because we're expected to see another 935,000 unemployment claims initial claims come through tomorrow when we get that update.

Stimulus checks wouldn't necessarily be targeted to those who are no longer employed, but it would address kind of this gap we've seen in this K-shaped recovery for people below a certain amount of income. So talk to me about that and maybe the idea of moving past the political need to address those most in need versus just kind of getting through, I guess, what seems most politically favorable right now.

GBENGA AJILORE: So one of the things is that we talk about targeting. It misses the fact that we're looking at a huge pandemic. We're looking at, you know, people who still might be working. People are still contracting the virus. We're still having, you know, 400,000 people dead, 24 million who are still infected. And so, when we talk about targeting, we want to say, OK, well, people who are unemployed, but how about people who are underemployed or people who are still struggling? And so, it's hard to talk about targeting when so many people are struggling and that we need some sort of relief to help people get through.

SEANA SMITH: Well, I guess, what's your take on where we stand with the jobs market then at this point? Like Zack said, we're expected to get a high number tomorrow. We lost 140,000 jobs in the month of December. Is it going to get significantly worse before it gets better?

GBENGA AJILORE: So it depends on how you define significantly. But one of the things that we sometimes don't talk about or talk enough about is the disparities. So, for example, Black men still have an unemployment rate of 10.3%. And so, white men didn't have that unemployment rate, you know, in June. And so, when we talk about jobs numbers and who's losing jobs, we actually have to look at the breakdown by demographics. Hispanic women had an unemployment rate that went up to 9.1%.

And so, we have-- and, you know, people who are in the leisure hospitality are still hurting. So one of the things that we have a seriously struggling labor market. And so, we need a lot of relief and different types of relief to really get people through until the virus is handled.

SEANA SMITH: All right. Gbenga Ajilore, great to have you on this show, senior economist for the Center for American Progress.