January 12, 2021
Senior Vice President and Chief Economist, ADP, Principal and Investment Strategist, Edward Jones
The coronavirus pandemic and its subsequent economic crisis continue to present a challenge for American businesses. While the economy has begun to bounce back, this recovery has not been equal across sectors and populations, according to Nela Richardson, SVP and chief economist of ADP.
“The economy is about two-thirds of the way left to the pre-pandemic level, and the job market is about halfway there,” explained Richardson. “But what that also means is that of the 22 million U.S. workers who lost their jobs during the pandemic, 10 million people who were employed in February are still not employed today.”
“It also means that there are some people who have been hit harder by this pandemic,” she added, noting that Wall Street and the housing market both saw a quick recovery.
Data from ADP shows that small businesses and low-income workers, particularly in the leisure and hospitality sectors, have been hit the hardest. Employees making under $15 an hour saw a job loss of 35%, while small businesses were forced to make cutbacks or shut down faster than larger organizations.
Though these sectors will likely continue to struggle in the short-term, there is a light at the end of the tunnel, said Richardson.
“We have a financial system that is willing and able to make use of low-cost funding to help restart these businesses and a vaccine that will hopefully be distributed widely and as soon as possible.”
Congress Shows Bipartisan Support for Short-Term Relief and Long-Term Solutions
In addition to vaccine distribution and financial support for small businesses, Congress has shown bipartisan support for helping those most affected by the economic crisis. For short-term relief, stimulus packages and programs such as the Paycheck Protection Program (PPP) have been implemented to keep businesses afloat during the pandemic. However, Congressional leaders have also stressed the importance of developing long-term solutions to prevent such an issue from happening again.
One example of a long-term solution under discussion is The Advance Act, a bipartisan bill co-sponsored by The Honorable Abigail Spanberger (D) and The Honorable John M. Katko (R).
“[The bill] would strengthen our government’s ability to respond to future public health crises and natural disasters by prioritizing the coordination of information,” explained Spanberger. “Part of [recovery] has to be making sure that we never find ourselves in this scale of economic challenge, the level of employment that we’ve seen, and we do that by planning.”