![]() ![]() As of December, LA’s unemployment rate was 1.5 points higher than in February 2020-a small gap but a bit wider than the rest of the state. Los Angeles had the highest spike in unemployment in 2020 and a slower recovery throughout most of 2021-though it has accelerated more recently. For instance, although the tightening labor market puts workers in a strong position, rising prices are eating into wage increases, putting more pressure on lower income families.įurthermore, regional variations have been notable. While macro patterns point to a strong recovery, there are some differences across demographic groups and regions. Evidence to-date suggests these direct to household supports were more equitable and effective than business aid such as the Paycheck Protection Program the lack of government infrastructure made it difficult to target the businesses most in need. These and other safety net expansions may have helped prevent cascading crises in housing and debt, while contributing to upticks in other areas, such as inflation. Unemployment insurance, which reached a large share of the workforce due to temporary expansions, was the second largest. Federal and state payments to taxpayers-such as stimulus checks, an expanded child tax credit, and California’s Golden State Stimulus-provided the largest infusion of cash, because they were broad-based. Direct support to households propped up consumer demand (and reduced poverty in 2020). Also, the federal and state response to the COVID economic shutdown likely prevented a more severe or long-term recession. How did this happen? For starters, the cause of the recession was fundamentally not economic but a public health crisis indeed, COVID afflicted an economy that had been growing for more than a decade, and all along, the trajectory of the virus has shaped the pace of recovery. It took about twice as long to reach this level of recovery after the Great Recession, when unemployment was less severe. As of December, unemployment was down to 6.5% in California-about 2 percentage points higher than in February 2020. However, the economic recovery has been relatively rapid. ![]()
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