Ten million people are still out of work and a greater number of layoffs remain permanently.
Joe Biden will inherit a shattered US economy, which was never fully cured of the coronavirus and could suffer again as new infections increase.
The once robust recovery has shown signs of shortness of breath after Federal aid expires. Ten million people are still out of work and a greater number of layoffs are becoming permanent. The Federal Reserve reports that factory production fell.
Parents cannot go back to work because daycare centers have closed. Local restaurants and retailers are depleting their remaining cash reserves, with many owners wondering if next week could be their last. One in six restaurants it closed as early as September, according to an industry survey.
Biden will also face an American public with decidedly different views of his financial well-being, with higher-income families enduring the pandemic reasonably well and those earning far less in increasing economic peril.
In a way it will be A repeat from when Biden assumed the vice presidency in the depths of the 2008-09 financial crisis, possibly with fewer tools and less political clout to push an agenda either to corner the virus or to rekindle economic growth.
The president-elect is expected to somehow inject enough assistance to sustain workers, businesses, and state and local governments, without necessarily having enough partners in Congress to share his concerns. All of this could make the difference between a successful or a poor presidency.
It’s unclear whether Biden’s victory is enough to tip the Senate in favor of the Democrats – with two second rounds of Senate seats in Georgia – and provide a clearer path for money. This means that any attempt to secure another round of official aid may depend on the Republicans, who already before the elections were expressing concern about the growing budget deficit.
Senate Republican Majority Leader Mitch McConnell of Kentucky previously said that before the end of the year a measure should be passed, But it is unknown, after the elections, what that commitment would look like and if President Donald Trump would back it. The longer aid is delayed, the greater the threat to the economy.
“The risk is that the recovery will reverse,” observes Gregory Daco, an economist at Oxford Economics consultancy.
The Associated Press VoteCast poll, conducted of more than 110,000 voters and started before the election, found that the damage from the recession has primarily impacted low-income householdsAlthough most people were largely protected by the initial rounds of official aid that totaled almost $ 3 trillion.
29% of voters from households with incomes below $ 50,000 a year said they were lagging economically. Their adversity is in stark contrast to those who earn more than $ 100,000 a year. Not only are top earners less likely to struggle, but 26% say their finances are improving.
Biden got more support than Trump from households making less than $ 50,000. Voters from higher-income households were divided more evenly between the two candidates.
Among Biden voters, 89% said it was more important to contain the pandemic than to limit any ongoing damage to the economy. This is likely because they see no trade-off: the economy is never going to safely recover as long as the coronavirus threat exists.
“To control the economy you have to control the virus“says Amanda Fischer, policy director at the Washington Center for Equitable Growth, a progressive think tank.” This is what is called a K-shaped recovery: you see a divide between the wealthiest and everyone else. “The economy was objectively affected by the electoral process, although it has been improving since April. Unemployment rate reached 6.9%, in contrast to 4.7% when Trump took office. Retail sales fell by 0 , 8% since the beginning of 2020 and there was a collapse of restaurants, clothing and furniture businesses.
“The job market still has a long way to go to regain its pre-pandemic situation,” says Jed Kolko, chief economist at employment firm Indeed. “Employment has decreased in almost all activities and dramatically in those that depend on travel and large meetings.” The nation’s top public health officials warn that the virus is likely intensifying – record numbers have been reported this week – and are urging Americans to wear masks, maintain social distance, and avoid large groups, especially in interiors. The worsening disease could force more businesses to close.
Still, 43% of voters believed the economy was performing excellent or good. This includes about three-quarters of voters in favor of Trump, who campaigned on the notion that the economy was booming and would continue to do so if he remained president. With Biden in the White House, these once optimistic voters may suddenly turn around and say the economy is in trouble.