NMU professor shares expertise on COVID-19 stimulus and unemployment

Northern Michigan University Economics Professor Gary McDonnell was recently featured on the website WalletHub.com as an expert panelist for an article analyzing states affected most by unemployment claims.

McDonnell was asked his opinion on the $2.2 trillion emergency relief package that Congress passed and whether it will be sufficient to ensure full relief.

“I sense that many small businesses are going to fail (and quite a few large ones, as well), regardless of how much the federal government tries to provide relief,” said McDonnell.

“Even after the restrictions on business are lifted, fear will restrain spending, probably at least until there is a widely available vaccine. A full recovery could take a very long time — just how long is anyone’s guess. Given that it’s an election year, I’d be willing to bet that there will be some sort of additional stimulus spending beyond what’s already been promised.”

McDonnell was also asked for his thoughts on insured unemployment as a measure of unemployment.

“The conventional measure of unemployment reported in the media is the U3 measure, which counts people who are unemployed and who have looked for work during the last four weeks. Under normal circumstances, counting only the people collecting unemployment benefits would understate true unemployment. I sense that that problem is only amplified by the current situation, given that some workers are furloughed, and many expect to be called back to work soon. Some who are furloughed are not counted and some who are counted will be working again soon.”

McDonnell added, “Unemployment statistics will probably be a better gauge of the long-run effects of COVID-19 on the economy by later this year or sometime next year.”

You can see the full article from WalletHub here.