Connect with the House Financial Services Committee Get the latest news: https://financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/FinancialDems/ Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Tuesday, July 7, 2020, from 12:00 p.m. (ET), National Security, International Development, and Monetary Policy Subcommittee Chairman Cleaver and Ranking Member Hill will host a virtual hearing entitled, “Paycheck Security: Economic Perspectives on Alternative Approaches to Protecting Workers' Pay During COVID-19." - - - - - - - - Witnesses for this one-panel hearing will be: • Lisa D. Cook, Professor, Department of Economics, James Madison College, Michigan State University • Lily Eskelsen García, President, National Education Association • Joseph Stiglitz, Professor of Economics, Columbia University • Diego Zuluaga, Associate Director of Financial Regulation Studies, Cato Institute Overview The coronavirus (COVID-19) pandemic continues to pose a significant public health and economic crisis. Congress has passed a series of bills in response to the crisis that have helped a variety of individuals, workers and businesses, though there have been criticisms that these efforts have had various shortcomings and have been insufficient to meet the needs of everyone who has been adversely affected by this crisis through no fault of their own. As several programs are scheduled to soon expire, such as the enhanced unemployment insurance support, policymakers can consider extending or modifying existing programs or considering alternative ones, such as a paycheck guarantee program modeled after approaches being utilized by other countries. Below is background on the economic effects of the COVID-19 pandemic, a brief summary of the federal response to date, and a review of alternative proposals. Economic Effects of the COVID-19 Pandemic The COVID-19 pandemic has had a profound effect on the economy. The April jobs report by the Bureau of Labor Statistics (BLS) was the worst in recorded history, with 20.5 million jobs lost. With many businesses slowly initiating the re-opening process, the BLS’ May jobs report showed a unemployment rate of 13.3 percent and that 2.5 million jobs were added back into the economy. However, on June 10, Federal Reserve Chair Jerome Powell pointed out that the 13.3 percent figure “likely understates the extent of unemployment” and “accounting for the unusually large number of workers who reported themselves as employed but absent from their jobs would raise the unemployment rate by about 3 percentage points,” Further, any economic recovery that may be occurring is being experienced unevenly, and low- and moderate-income communities are in an especially vulnerable and precarious position. For example, the May jobs report also showed that unemployment among Black workers had actually grown to 16.8%. While the NASDAQ hit a new high in June, the employment-to-population ratio stands at 52.8%, meaning nearly half of US adults do not have a job.5 1.5 million public sector employees have been laid off since March, 6 and state governments are projected to face a combined budget shortfall of $615 billion over the next year. Public health and economic experts have also emphasized that further economic recovery will depend on the success of efforts to contain the virus. Chair Powell, for instance, has stressed that “a full recovery is unlikely to occur until people are confident that it is safe to reengage in a broad range of activities.” Powell has also emphasized the need for further fiscal support and congressional action. Testifying before the House Financial Services Committee on June 17, Powell said, “There are something like 25 million people who are still dislodged from their job in full or in part due to the pandemic. I would think it would be a concern if Congress were to pull back from the support that it’s providing too quickly.” COVID-19 Resurgence in the United States and a “second wave” According to the Centers for Disease Control and Prevention, confirmed COVID-19 cases and activity in the United States peaked in March and April.10 Although there was an overall national decline in COVID-19 fatalities and activity through the course of the late spring, the Director of the National Institute of Allergy and Infectious Diseases, Dr. Anthony Fauci, has called the possibility of a resurgence in cases and deaths in the fall “inevitable.”11 Even before this expected resurgence, however, there have been sharp increases in confirmed new COVID-19 cases in various regions throughout the United States. On June 30, 48,000 confirmed new cases were reported in the United States, surpassing previous record highs for the fourth time in one week. During the final week of June, seven states set new records for confirmed new cases, with particularly... Hearing page: https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=406732