Melissa Harris-Perry: I'm Melissa Harris-Perry. You're listening to The Takeaway. Let's take a look at the US economy.
President Joe Biden: Economic growth is the fastest in 40 years. Jobs are up. The unemployment rate is the lowest since the pandemic hit.
Melissa Harris-Perry: That was President Joe Biden talking about the July jobs report released from the US Bureau of Labor Statistics last week. According to the report, the US economy added 943,000 jobs in July. The second straight month of steady upward growth. That means there was a 0.5% drop in the unemployment rate to 5.4%.
President Joe Biden: While our economy is far from complete, and while we are doubtless we will have ups and downs along the way as we continue to battle the Delta surge of COVID, what is indisputable now is this, the Biden plan is working, the Biden plan produces results, and the Biden plan is moving the country forward.
Melissa Harris-Perry: I always love when my president talks about himself in the third person, the Biden plan. For more on the current economic outlook, we're joined by Roben Farzad, who is a host of public radio's Full Disclosure. Roben, thanks for being here.
Roben Farzad: Thank you.
Melissa Harris-Perry: And Amara Omeokwe, who is economics reporter at the Wall Street Journal. Hi, Amara.
Amara Omeokwe: Hi Melissa. Thanks for having me.
Melissa Harris-Perry: Now, Amara, what was your initial impression of the most recent jobs report? Did anything surprise you in it?
Amara Omeokwe: It was a very strong number and Economist said it was a strong number also as you mentioned, the economy adding 943,000 jobs, the unemployment rate coming down. All of this was encouraging, particularly because earlier this spring, we had some disappointing months in terms of jobs added to the economy and that started to make people wonder whether the recovery in the labor market was going to be a little slower than anticipated.
It is encouraging to see the economy add more than 900,000 jobs for two straight months. That being said, the data for the jobs report were collected before the end of July and into August and that is when we really started to see local governments start to bring back some of these mass mandates and other restrictions aimed at curbing this surge in Coronavirus cases we're seeing. I think right now it's an open question what the Delta variant and this rise in cases is going to do and how it's going to potentially impact the recovery going forward.
Melissa Harris-Perry: Roben, were you surprised by the magnitude of growth and the drop in unemployment here, or was this also pretty much what you expected?
Roben Farzad: It's what we've been hearing from small businesses, large businesses, there's been difficulty hiring. I think Melissa, we're in this feeling of weightlessness and strange days and that the Dow is approaching 36,000, markets I think have nearly doubled since their lows back in March of 2020. You can't afford a house anywhere. They get snapped up before they're even listed. Everywhere there's help wanted ads and you have the Federal Reserve, not only at 0% interest rates, perhaps until 2023, but buying about $120 billion in bonds every month, like pumping Hawaiian punch into this economy.
At the same time they're saying, "Well, we can tolerate a certain level of inflation." Unemployment is plummeted. It's still not back to pre-pandemic levels, but this is risky business. You're starting to hear a handful of economists talking about a taper and you also hear taper in pharmaceutical terms where the doctor's trying to pull back your medicine and it's not easy to do. You're going to have maybe some convulsions and some withdrawal syndromes. Especially with this Delta variant shutting down whole swaths of the economy regionally. Everybody thought it was going to be quickly back to work in the fall, back to normal and it's hardly that.
Melissa Harris-Perry: Roben, what is it that's risky here? What's dangerous.
Roben Farzad: Having all of this stimulus in the economy and again, the Fed's balance sheet is just enormous. It's at record size. How would this economy be doing without the extraordinary aid of the Federal Reserve and extraordinary amounts of fiscal stimulus? You see what the Senate Democrats and the House are close to passing, extraordinary unemployment benefits that I think for the rest of the people who take them are set to lapse in September. What is the economy's true staying power without all of this supportive scaffolding and stimulus? I thought we were also going to be approaching some manner of post-pandemic normalcy of which we're not there yet to even test this.
Melissa Harris-Perry: Amara, so it's interesting to hear that analysis by Roben there, that may be in part that we're being floated by the stimulus, which is, of course, what it's meant to do. But it is odd to me because I see these job report numbers, but then I was just on a vacation and talking to ordinary people working regular jobs, and they're not telling me, "Oh yes, I'm chilling. It's all good. I'm paying these bills. I got the extra cash." In fact, people are telling me they're still struggling.
Amara Omeokwe: Yes. I think that this economic recovery, it is important to remember that the headline numbers look good, but it is still a very uneven recovery. A lot of industries were really hard hit by this downturn that we saw because of the pandemic and they're just starting to reopen and rebuild. Now we have the threat of the Delta variant that is popping up. There is a lot of unevenness. Even in restaurants and hospitality, the sectors that are really adding jobs right now, there are still people who are saying, "Look, 2020 was so bad that it's going to take me quite some time to really recover and really to get back to where I was pre-pandemic."
Then you have restaurants now and other businesses in the hospitality industry saying, "Now we have the Delta variant. We're not sure if people are still going to come out if we're going to be able to sustain this early-stage recovery that we're going through." We've also seen wages accelerate, but, of course, if prices are going up, those wage increases that American workers are seeing they may not necessarily feel better off. It is an uneven state of affairs right now and I think that that is why the federal reserve is watching inflation really closely as one of the metrics it's looking at to determine whether it's time to start to roll back some of these policies they put in place to support the economy during the pandemic.
Melissa Harris-Perry: Roben, as we begin to dig into the Delta variant issue here, there isn't any real possibility from a political perspective that governors and mayors are going to do the complete shutdown? Again, we saw back in spring of 2020, we do actually have vaccines. People are simply being reluctant to take them or not having access, but there isn't any possibility of us being where we were in April of 2020, is there economically I mean?
Roben Farzad: If certain cities and states truly are brought to their knees, they have to cry, "Uncle." You're talking about ICUs filling up. It could force these governors on the right. It could force their hands. I think that it's broadly metaphorical that the Federal Reserve if you compare the two, it fights inflation in the economy and prices spiraling out of control. What you're seeing right now truly metaphorically is inflation of this Delta variant and the Federal Reserve, the way it shuts down the economy to kill inflation, I don't think you can do this drip, drip, selectively masks, masks, asterisk, vaccine passes, fake IDs, everything.
I think it's binary. I think you got to shut down the entire hotspots in order to curb this virus to a level where it's not standing in the geometric way that it's doing right now. I think that's an even less savory prospect for governors and lawmakers right now who don't even want to force people to get vaccines.
Melissa Harris-Perry: I want to talk a little bit about race and gender in this economic recovery. We know that this first wave pre-Delta variant hit women particularly hard, but it looks like we've seen some gains around jobs for women. Will all of that get wiped out if schools get closed with the Delta variant?
Amara Omeokwe: It is a potential downside risk for women. We know that women were very hard hit by daycare closure, then school closures. It just really impacted their ability to participate in the labor force. When you talk to economists, one of the things that they are expecting to drive job creation for women come the fall and into the winter is schools being reopened. Any sort of speed bump in schools reopening or children being able to attend schools in person could be a problem for women.
We did see two-thirds of the jobs that were created in July go to women so that was encouraging, but we still saw that their participation in the labor force was really stagnated. It didn't go up and so that would suggest that women still aren't coming off the sidelines and reentering the workforce. It is something that I think could potentially limit the job gains for women going forward if we see the Delta variant continuing to surge.
Melissa Harris-Perry: Amara, help me think about this politically for a second. If I'm a governor or a lawmaker and I'm looking at this landscape and what Roben just provided for us before the break around this real possibility of having to shut it all down, is it more distressing to shut it down and have the economic pain that everyone is going to feel or to allow these almost unconscionable illnesses and deaths, and maybe particularly among pediatric cases, but that's still going to be pain that is felt by some and not by everyone? I'm just like, how does one make that particular political calculation if we took ethics or morality out of it altogether?
Amara Omeokwe: Well, I don't cover politics, but just talking to small business owners and workers, I think some of it is geographic. I think that one thing to think about lockdowns is that in the states where we have relatively lower rates of vaccination, those are the states where we have governors that have been hesitant to do very strict restrictions and very strict lockdowns in the first place. It's just not part of their political calculus when they're thinking about who their voters are and what their voters want and so I don't see a world where, unless there is some significant worsening of the situation that we're seeing now where states, particularly, in the south, will go back to the lockdowns and the situation we had earlier in the pandemic. That may be a different calculation for states and governors in those states where people aren't as hostile to lockdowns and mass and those things.
I was talking to restaurant co-owners in Columbus, Ohio, and they were saying, "Look, this is a place where people take COVID very seriously. They want safety measures. They want to feel safe." If the Delta variance continues to surge the way it is, we're going to see people change their behavior and we probably will see restrictions here because that's what people want.
Melissa Harris-Perry: Roben, obviously, President Biden will not be himself on any ballot coming into the midterms in 2022 but he is touting these economic gains as the Biden plan working. If the Biden plan ceases working mostly because of the Delta variant and this need to potentially shut down even if it is Republican governors and lawmakers being forced to shut down places they had not previously, might it still be bad for Democrats?
Roben Farzad: It could be. I think if you take the case study of Florida where Ron DeSantis has become synonymous, the lightning rod for this nationally as a governor who is going to stand up to a national mandate. He's in reality governing two states. If you look at North and Central Florida and the Panhandle. If you look at South Florida, which is chock full of all of these real estate refugees from New York and DC and these people that were quarantining in the sun and the fun, and there's a tremendous amount of confusion and anger by parents and people who thought they were going to Florida, where you could eat at restaurants and things were okay and you expect some modicum of rules and curation for clubs and beaches and vaccination cards and everything and they're getting none of that.
He is on the ballot next year, and there are people who can make the case against him pungently as a national torchbearer for this, "I'm thumbing my nose at big government. DC telling me to wear a mask. DC telling me to vaccinate my kids." I think that that's going to be the true case study next year. It's not so much Biden. Biden and his press secretary and everybody have unanimously spoken about the importance for vaccines.
In fact, we think it's so important that we're exporting millions and millions and millions of vaccines to developing nations and we have our own States, what, 150 years after the Civil War ended, telling us to go away. Yes, I would watch Florida very carefully. I would watch the situation in Mississippi, in Arkansas, where you wonder if Governors wish they could speak logic to this, but it's politically impossible, even as ICUs are filling up.
Melissa Harris-Perry: Roben, there's another aspect to the economics, and who can tell you what to do and some of that is around Washington DC or your governor, but the other is your boss. I'm a college professor in my real day job. I haven't taught inside a classroom in a year, but the rule is now, we all got to go back to campus to teach. Delta Variant has me nervous about that. I'm wondering about the financial situations of those who are going to say, "You know what? I'm not going back in for people who have been able to work remotely." What are we likely to see happen to our overall economic indicators around that?
Roben Farzad: I think you are seeing clout right now. If you just take the $15 prevailing wage at the service sector level, there are people who are saying, "Look, you took advantage of me. You exploited me. I was dealing with people as a frontline grocery store worker or restaurant server before this. I ain't coming back for $10 or $12. You're going to give me $16, $17." This is going to be sustainable and we're going to limit the size of the dining room.
You're not only seeing that at service level employees. You're seeing it happen in Silicon Valley, with Google, with Facebook, with a bunch of white-collar companies pushing back reluctantly the come back to the office thing. For the time being, the clout has shifted to the workers and that should unite them in terms of worker rights and work from home. A lot of us worked our tails off last year in the throes of the pandemic and we were just as productive if not more on the Zoom but you're seeing this being battled on a company-to-company level. I think that that's fascinating both from a wages perspective and also from defining what work should be going forward.
Melissa Harris-Perry: Absolutely, and I think we will continue to watch those questions and how that might also divide across these different aspects of work and of the work sectors. Roben Farzad is the host of public radio's Full Disclosure, and Amara Omeokwe, the economics reporter at the Wall Street Journal, thank you so much for joining us.
Amara Omeokwe: Thank you, Melissa.
Roben Farzad: Thank you, Melissa.
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