POLITICO NIGHTLY: When are the jobs coming back?

By Ben White and Renuka Rayasam Presented by THE DEPRESSING DEPRESSION — The U.S. economy is now in the deepest hole since the Great Depression, with more than 30 million Americans losing jobs in just seven weeks and an unemployment rate likely to hit 20 percent or more. It’s probably going to take a long time to dig out. Many analysts and economists suggest the recovery could take years with a jobless rate still near 10 percent — the high of the Great Recession — by the end of 2021, a year into the next presidential term. The April jobs numbers, which will be released Friday by the Labor Department, are widely expected to be historically awful. But they will still come like a punch to the face. When are the jobs coming back? There are many potential impediments to a rapid decline in joblessness, led by the sheer breadth of job cuts now spreading across nearly every American industry. Layoffs and furloughs began in consumer-facing industries like retail stores, bars and restaurants, as well as the travel, leisure and hotel industries. More recently, evidence from ADP’s report on private payrolls for April and surveys of the manufacturing and service sectors suggest job cuts are now spreading into higher-paid positions in goods production and business services. The oil and gas industry is hemorrhaging jobs amid a plummet in oil prices. Some of the retail jobs are clearly not coming back. Iconic high-end department store Neiman Marcus filed for bankruptcy protection today. J.Crew filed earlier this week and concerns are rising over the viability of Lord & Taylor and J.C. Penney. “I think it will take until mid-decade before the economy is back to something considered full-employment — a 4 percent to 5 percent unemployment rate,” said Mark Zandi, chief economist at Moody’s Analytics. “We have to be utterly realistic about this because there is political fantasy out there and then there is economic reality,” said Joseph Brusuelas, chief economist at consulting firm RSM. “It is going to be years before we recover all of these lost jobs and as much as 25 percent of them aren’t ever coming back.” Brusuelas added that the “next step is to discover if we suffered a fundamental economic break that is permanent. And it would appear the answer to that is yes.” The great acceleration: In some ways, the Covid-19 crisis compressed what could have been several years’ worth of shifts to online retailers like Amazon and Overstock into a period of weeks. Companies coming out of the crisis may speed up their reliance on technology to replace staff and reduce the amount of office space they need, slowing job gains and hurting the commercial real estate industry. These shifts were long anticipated and the subject of much research and high-end panels and seminars on re-skilling the American labor force. But most of the actual work remains undone. And now it’s suddenly and desperately needed. Welcome to POLITICO Nightly: Coronavirus Special Edition. Rest in peace Neiman Marcus. We’ll still always have your excellent cookie recipe. Reach out with tips: rrayasam@politico.com or on Twitter at @renurayasam.   A message from PhRMA: In these unprecedented times, America’s biopharmaceutical companies are coming together to achieve one shared goal: beating COVID-19. We are expanding our unique manufacturing capabilities and sharing available capacity to ramp up production once a successful medicine or vaccine is developed. Explore our efforts.   First In Nightly Son of Alan WHAT TO FEAR NEXT — You might feel blindsided by the coronavirus, but warnings about a looming pandemic have been there for decades, Garrett M. Graff writes in POLITICO Magazine’s Friday cover story. It makes you wonder: What else are we missing? What other catastrophes are coming that we aren’t planning for? Beyond other pandemics, which appear regularly every decade or two, there are eight other major threats (and one wild card) that scientists and national security officials worry about currently that are real, identifiable and stand a “more likely than not” chance of occurring—at some scale, ranging from mild to catastrophic—in the next 5-50 years. Our (least) favorite: “Catastrophic earthquakes.”   NEXT FRIDAY - HOW DOES THE GLOBAL ECONOMY START MOVING AGAIN? The pandemic has caused the global economy to come to a halt, triggering economic crises around the world. What happens next? Join Global Translations author Ryan Heath next Friday at 1 p.m. EDT for a virtual discussion with Kristalina Georgieva, managing director of the International Monetary Fund, focused on the trade-offs and investments needed to get the global economy moving again, the role that China can be expected to play, and how growing debt and deficits will impact the developing world. Have questions? Submit yours by tweeting it to @POLITICOLive using #AskPOLITICO. REGISTER HERE TO PARTICIPATE.     Palace Intrigue CLOSE TO HOME — An assistant to the president tested positive for coronavirus Wednesday, the day after President Donald Trump had a meeting with Iowa Gov. Kim Reynolds, met with a group of nurses and visited a Honeywell facility for N95 face mask production. A White House official confirmed to POLITICO that the person who tested positive was one of the president's personal valets. The president has two valets in the Oval Office and three in the residence. Oval Office valets provide anything Trump requests, such as coffee or food or whatever else he might need during the day, and can be called at the touch of a button, making frequent daily interaction common. At the residence, they do his laundry, iron and pack his suitcases, a former White House official said. They interact regularly with the president, delivering his newspaper or messages. The valets are told to give him his space and not touch him since he doesn’t like that, according to the official. The White House confirmed that the president and vice president tested negative for coronavirus after they learned of the positive case. From the Health Desk DRUG DEAL — Doctors across the country are demanding that the Trump administration explain how it is distributing remdesivir , the sole drug proven to help coronavirus patients, to hospitals, writes health care reporter Zachary Brennan. The drug’s maker, Gilead, has donated an unspecified number of remdesivir doses to the government, but doctors say it’s not clear how the administration is making decisions about who gets it. Physicians and infectious-disease experts say that the government has so far ignored some medical centers that are treating large numbers of coronavirus patients. Adding to the confusion, a senior HHS official told POLITICO that the government has not finalized its plan for distributing remdesivir. Rewriting — The White House has ordered the CDC to revise a guide to reopening public places amid the coronavirus pandemic because it didn't align with Trump’s strategy of giving states the final say, according to a spokesman, health care reporter Brianna Ehley writes. The Associated Press reported today that the White House rejected the 17 pages of recommendations for safely reopening restaurants, child care facilities and other establishments, as well as public transit, quoting an unnamed CDC official as saying agency scientists were told it “would never see the light of day.”     Around the Nation DISEASE DETECTIVES — North Dakota’s Republican Gov. Doug Burgum often takes a couple moments during his press conferences to congratulate his state for how many coronavirus tests it’s conducting each day, and Wednesday was a good day even by the state’s lofty standards. Burgum reported that 2,211 tests were processed, the highest daily total yet. On a per capita basis, North Dakota is third in the nation in testing, effectively tied with Massachusetts and trailing only Rhode Island and New York. The state is well ahead of its neighbors like Montana and South Dakota. Health reporter Dan Goldberg emailed us this report on the state’s success. A big part of the reason is the state’s more than 200 contact tracers, according to Brig. Gen. Bob Schulte, a member of the National Guard and the state’s testing strategy director. When a person in North Dakota tests positive, contact tracers find anyone who’s been in close contact with the infected person and tell them to remain isolated and get tested. The state had only a couple dozen contact tracers in mid-March when it began beefing up its program. Schulte said each infected person in North Dakota has, on average, six contacts. Tracing and testing those contacts, and keeping them from infecting others before they display symptoms, helps explain why North Dakota, which never issued a stay-at-home order, still has one of the lowest positive test rates in the nation. South Dakota only recently ramped up its contact tracing program and still has far fewer tracers than its neighbor to the north. Georgia, which has roughly 14 times as many people as North Dakota, is aiming to have only 4 times the number of contact tracers that North Dakota has now. “Where many states fell behind is they ended up giving up on contact tracing,” Schulte said. Like North Dakota, Massachusetts and Utah were both relatively early to hire contact tracers and are also among the state leaders in testing. Case by case — Covid is still on the rise around the country, but very unevenly. Iowa, which didn’t issue a statewide order, has more than double the number of Covid cases per capita than California. In now-reopening Texas, hotspots are emerging in places like the panhandle’s Moore County, which has a meat processing plant, while cases are coming down in urban areas that have had strict shutdown orders and enforcement. Talking to the Experts Should our immigration policies adjust during the pandemic to address the unemployment crisis? “I think it’s important for the agencies to be thinking about a longer-term strategy. First that would involve ensuring that when enforcement ramps up, they can focus on those unscrupulous employers who really are taking advantage of the visa program or hiring undocumented workers. It’s going to be important to expedite and expand some visa categories and allow for individuals to come into the United States who are supporting other employment. One category, in particular, is students. Many schools and universities are highly dependent on the revenue and other positive benefits of having an international student population. Everyone agrees that the system is broken. This is the time to look at it and say how can we do this right and get the labor we need and keep employers from not abusing the system.” — Julie Myers Wood, head of Immigration and Customs Enforcement under President George W. Bush and current CEO of Guidepost Solutions “I don’t think that now is that time to be involved in a big immigration reform effort. We have people who are here on temporary visas, not only H-1s, but also O’s, which is extraordinary visas, who are doing cutting-edge research for the vaccine. Do we want to throw them out? That’s just stupid. Part of the criteria for giving either permanent visas or temporary visas, based on work, is that there is no one available to do the job you have been offered. A majority of the farmworkers in the United States are undocumented. There is no indication that somebody who is an unemployed engineer in San Jose is going to head out to pick crops somewhere. The president just ordered workers in these meatpacking factories to go back in because it’s essential to keep the food supply going. But if they are undocumented they aren’t eligible to get any health care. So we’re saying go in, risk your life, and by the way if you get sick you don’t get treated. That’s not reasonable.” — Rep. Zoe Lofgren (D-Calif.), Chair of the House Judiciary Committee’s Subcommittee on Immigration and Citizenship Ask The Audience Our question for our readers this week: What routines and activities, if any, are you resuming this week? Use the form to send us your responses, and we plan to feature several later this week.   NEXT WEDNESDAY - WHY IS THE INCARCERATION RATE FOR WOMEN RISING IN THE U.S.?: Women are the fastest-growing segment of the incarcerated population in the U.S., increasing at nearly double the rate of men since 1985. Join Women Rule Editorial Director Anna Palmer next Wednesday at 3 p.m. EDT for a virtual conversation with April Grayson, campaign surrogate and statewide coordinator for The Young Women's Freedom Center; Scott Budnick, founder, Anti-Recidivism Coalition; and Emily Ratajkowski, model, actress and activist, to discuss how women fit into the criminal justice movement and the challenges women face behind bars. Have questions? Submit yours by tweeting it to @POLITICOLive using #AskPOLITICO. REGISTER HERE.     The Global Fight YOU CAN’T BLAME COVID FOR EVERYTHING — The Google-affiliated Sidewalk Labs suggested the pandemic was to blame when it dropped its plans to build a tech-infused Toronto neighborhood called Quayside on the shores of Lake Ontario, Maura Forrest reports . “As unprecedented economic uncertainty has set in around the world and in the Toronto real estate market, it has become too difficult to make the 12-acre project financially viable without sacrificing core parts of the plan,” Sidewalk CEO and former New York City deputy mayor Dan Doctoroff said in a statement. But Nancy Scola, who wrote a POLITICO Magazine story on what Sidewalk was attempting pull off in Toronto, emails us: Now, coronavirus has made it a difficult time to be in the city-building business, not least because packing people into tight spaces has lost some of its appeal. But Sidewalk’s Toronto project had been troubled for a long time. For one thing, there were privacy concerns, including whether Canadians’ data collected in Quayside would be shipped to a U.S. that is still without a federal privacy law . For another, cities are getting practiced in bucking big tech companies’ plans to put their stamps on their landscapes, such as Amazon’s experience in Queens. Quayside is, in that sense, the smart-city equivalent of J. Crew’s bankruptcy. Still, while Quayside is no more, it’s premature to count out the ideas behind it. One of the driving forces behind both Sidewalk and its Toronto project was Eric Schmidt, then-executive chairman of Google parent firm Alphabet. Gov. Andrew Cuomo said Wednesday that he'd enlisted Schmidt to lead a 15-member commission charged with “reimagining” a post-Covid-19 New York — using the best technology has to offer. Nightly Number $54.3 billion The size of California’s budget deficit, the state's worst budget gap since the Great Recession, state finance officials said today. The shortfall is almost 37 percent of the state’s current $147.8 billion general fund budget and foretells widespread program cuts absent a federal bailout. (h/t Kevin Yamamura) PUNCHLINES In the latest edition of Punchlines, Matt Wuerker dives into the process for coming up with ideas, including for how to illustrate the topic of anti-shutdown protesters nationwide. Parting Words FUßBALL KOMMT ZURÜCK — While American sports fans watch South Korean baseball and documentaries about 1990s basketball on ESPN, Germans have gotten clarity on one of their nation’s most hallowed pastimes: Their top-level soccer leagues. Matches in Germany's top two divisions will begin without spectators on May 16, writes Joshua Posner, making it the first major European country to announce a return to top-flight soccer. The announcement follows talks between Chancellor Angela Merkel and the leaders of Germany’s 16 federal states that included a commitment to allow the top levels of soccer to resume in the second half of May with strict hygiene protocols. Critics argue such a quick restart will drain testing resources. Soccer officials said more than 3,000 players and staff have been tested in two rounds, with 12 positive cases found.   A message from PhRMA: In these unprecedented times, America’s biopharmaceutical companies are coming together to achieve one shared goal: beating COVID-19. The investments we’ve made have prepared us to act swiftly: · Rapidly screening our vast global libraries to identify potential treatments and have 284 clinical trials underway · Dedicating our top scientists and using our investments in new technologies to speed the development of safe and effective vaccines · Sharing learnings from clinical trials in real time with governments and other companies to advance the development of additional therapies · Expanding our unique manufacturing capabilities and sharing available capacity to ramp up production once a successful medicine or vaccine is developed Explore our efforts.   Did someone forward this email to you? Sign up here.   Follow us on Twitter Renuka Rayasam @renurayasam   Follow us

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