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"Brookings Institution senior fellow in Economic Studies and director of The Hamilton Project, Wendy Edelberg, joins Yahoo Finance to discuss why we see slower than expected employment gains during the recovery and the most crucial factor for economic recovery."

“The racial wealth gap is far from new. Before the Covid-19 pandemic, Black people had lower levels of wealth compared to whites. The median white household held $188,200 in wealth—which includes savings, retirement accounts and real estate—in 2019, compared to just $24,100 for Black households, according to the Hamilton Project.”

“‘We’re not going to see as big a drop in female labor force participation because that mom really needs her job,’ said Lauren Bauer, a fellow in economic studies at [The Hamilton Project]. ‘But there are still consequences.’”

“‘There are a number of factors that are acutely affecting certain parts of the population, whether those are acute health risks or child care issues,’ Wendy Edelberg, a senior fellow in economic studies and director of the Hamilton Project at the Brookings Institution, said on Yahoo Finance Live (video above). ‘So certainly, we see a lot of evidence that for mothers of elementary school-aged children, particularly in states that have seen a lot of school closures, they’re feeling particularly hard hit by those school closures.’”

“By Uber and Lyft organizing themselves with the drivers being contractors, in a sense they have put the riders in the position of employing these contractors,” said Wendy Edelberg, the director of the Hamilton Project and a senior fellow at the Brookings Institution. “Every time we open our Uber app, maybe we feel a little bit like the small business that can’t fill the vacancy after putting up the ‘Help Wanted’ sign.”

“‘Many of the proposals—infrastructure, investments in young children, higher education—would take years to show up as greater economic output,’ said Wendy Edelberg, director of the Hamilton Project at the Brookings Institution, a Washington think-tank, and a former CBO chief economist. ‘They would immediately improve our quality of life. But they would also pay economic dividends for many years beyond this decade.’”

“‘We are a really big economy where really big forces are shaping what happens to G.D.P. growth,’ said Wendy Edelberg, director of the Hamilton Project at the Brookings Institution and a former C.B.O. chief economist.”

“A recent survey by The Hamilton Project found 16 percent of mothers with young children reported that someone in their household left their job to undertake child care responsibilities in 2020, and in those cases, 70 percent were the mothers themselves who left their job for child care responsibilities. We all lose when women are left behind, with the U.S. economy at risk of losing an estimated $64.5 billion in additional wages and economic activity.”

On May 26, 2021, Lauren Bauer testified before the the U.S. House of Representatives Agriculture Committee Subcommittee on Nutrition, Oversight, and Department Operations on the subject of “The Future of SNAP: Moving Past the Pandemic”.

“At least one economist already sees signs of the difficulties that women, particularly mothers, will face as they try to return to full-time jobs. In a survey conducted in the fall of 2020, Lauren Bauer, a fellow in economic studies at the Brookings Institution, found that 40 percent of unemployed mothers who left their jobs to take care of children during the pandemic were seeking work.”

“Not only are women more likely to work in service positions or other jobs impacted by pandemic closures, but they are also responsible for a larger share of childcare and unpaid domestic labor—including managing their children’s schooling — according to a report by The Hamilton Project economic policy initiative."

“Economist Wendy Edelberg at the [Hamilton Project] is also anticipating strong spending for the rest of the year. But she sees risks…… ‘Whether or not we’re seeing stresses in the labor market, [whether or not we’re seeing stresses] in production, in inventories and what’s going with imports, what’s going on with inflation. There will be a lot of signs flashing yellow, perhaps even red,’ she said.”

“This isn’t a new idea, but University of Massachusetts Amherst labor economist Arindrajit Dube last month released a plan laying out how to do just that. His policy paper, published by the Hamilton Project of the Brookings Institution, argued that taking control of unemployment insurance from the states is the best way for the federal government to tackle the system’s thorniest problems, including stingy jobless pay, overly strict eligibility rules, and the lack of “triggers” that effectively link benefits to economic conditions.”

“A 2020 report released by the Hamilton Project at the Brookings Institution found that low and moderate-income households claiming the Earned Income Tax Credit (EITC) are audited at roughly the same rate as the top 1% of filers, even though the top 1% of filers account for as much as 70% of the $381 billion net tax gap.”

“At the heart of the grind is the labor market: getting about 10 million people back to work after a third of the workforce changed or lost their jobs during the Covid-19 pandemic is going to take time, leaving some employers scrambling to fill positions amid brisk demand. ‘This will be a chaotic recovery,’ said Wendy Edelberg, former chief economist at the non-partisan Congressional Budget Office who now directs the Hamilton Project at the Brookings Institution.”

“‘There are a lot of signs of a resurgence in aggregate demand – an economy that’s recovering, but that recovery is going to be chaotic,’ said Wendy Edelberg, director of the Hamilton Project, an economic think-tank at the Brookings Institution. ‘And yes, really difficult to manage.’”

“U.S. Commerce Secretary Gina Raimondo, former governor of Rhode Island, placed the care economy at the ‘core of competitiveness, productivity and growth,’ recently while discussing child care and paid leave for Brooking Institution’s Hamilton Project. She said 2.5 million women left the work force during the pandemic, many of them to care for their children — a so-called ‘shecession.’ But even before the pandemic, she said America had a caregiving crisis.”

“When necessities get more expensive, consumers with less disposable income, who already spend a bigger share of their money on essentials, feel it first. In 2016, researchers from the Hamilton Project, part of the Brookings Institution, found that low-income households spend a higher percentage of their budgets on basic needs — housing, food, transportation, health care and clothing — than they did three decades ago.”

“The proposal from economists Elizabeth Davis and Aaron Sojourner, published Wednesday [by The Hamilton Project], calls for permanently expanding existing early childhood education programs, capping families’ spending based on income and creating a uniform set of quality standards. The researchers estimate this system would cost about $123 billion, which would be partly offset by economic gains for families and long-term advantages for children, especially low-income children.”

“When it comes to public policy, though, opinions are fractured. Lauren Bauer, a fellow in economic studies at the Brookings Institution, notes that parents, and especially mothers, will return to the workforce more slowly simply because a vaccine is not yet available for young children. ‘Until we are at a place where schools are open universally and there are available, affordable, high-quality child care slots, many women will not be able to come back.’”

“However, CNBC also indicated that teenagers are less likely to be looking for work, based on data from the Hamilton Project and Brookings Institution. This data shows that teen labor force participation peaked in 1979, when over 60% of American teenagers were employed. Today, only 35% of teens between the ages of 16 and 19 are working.”

“The Brookings analysis [by Jay Shambaugh] points out how some prices fell during the worst of last year’s pandemic lockdowns and argues from this fact that the recent inflation surge is merely a catching up to inflation’s longer-term trend of about 2% inflation a year. This view might be more comforting if people could believe that inflation somehow wants to fit into a neat trendline, but even this line of analysis would have made the dismissals by Powell and Yellen more convincing.”

“Mothers, in particular, are being left behind in this recovery, says Hamilton Project economist Lauren Bauer. The jobs report proves that more is needed to enable women and caregivers to re-enter the labor force.”

“Beyond money comes living and working conditions. Brookings Institution fellow Lauren Bauer immediately noted that the labor issues of people not going back to work (and you can’t create a new job if no one takes it) include: Women and care-giving; Mothers and childcare; Care infrastructure. Women did take the biggest hit in job reductions.”