America fought the pandemic economy — and won
Why it matters: None of these outcomes were expected when the pandemic began. All of them are the result of massive government programs.
By the numbers: Stimulus checks lifted nearly 12 million Americans out of poverty, according to new census data this week. Government programs also saved millions of people from losing their health insurance, even as millions lost their jobs.
- Headline unemployment stands at 5.2% — low, but still higher than the pre-pandemic rate of 3.5%. The true unemployment rate, however, as measured by the Ludwig Institute for Shared Economic Prosperity, tells a different story.
- Overall, true unemployment — people who are looking for full-time jobs that pay a living wage, but can't find one — stands at 22.8%, which is lower than the 24% rate in February 2020. The rate has come down across all demographics — including white, Black, and Hispanic Americans, men and women.
- “Workers in traditionally lower-paying positions, many of whom were considered essential during the pandemic, are finally seeing compensation that approaches their contribution,” says LISEP chairman Gene Ludwig. “This is a very positive development for low- and middle-income families, and indeed for the economy as a whole.”
The average wage now stands at $30.73 per hour, up 8% from $28.51 in February 2020.
- Household wealth for the bottom 50% of the population stood at a record $2.62 trillion at the end of the first quarter, up 30% from the end of 2019. The top 10% also saw their wealth grow, but not as fast — they're up 17% over the same period.
What they're saying: “Much of the harm of recessions comes after they technically end as prolonged unemployment and depressed sales cause human and business capital to atrophy, perhaps never to be used again," the Wall Street Journal's Greg Ip writes. "The more rapid return to normality this time should preserve years of economic potential that might otherwise have gone to waste.”
The bottom line: Pandemics, by their nature, are devastating. Over 650,000 Americans have died of COVID-19; millions of jobs were lost; families, especially those that span different countries, have been unable to see each other or attend funerals. America's public health response to the crisis has not been good.
- The economic response, however, has surpassed expectations. As a result, the U.S. economy has grown from its pre-pandemic level, in stark contrast to Europe and most of the rest of the world.