Implications of $1.9 trillion stimulus package

(Estimated cost = 155.76 million 2020 USA workforce – 9.5 million no longer looking for work because of COVID-19 health and economy impact = 144.26 million x 4.85% unemployment rate, given 6.2% current unemployment vs. 3.5% unemployment rate pre-pandemic = 7 million x $300 weekly supplement x 29 weeks till Labor Day Sep 6 = $60.9 billion short-term)

§  Also extends CARES Act PUA/Pandemic Unemployment Assistance for 1099 gig workers and others not traditionally eligible for unemployment aid + PEUC/Pandemic Emergency Unemployment Compensation for the long-term unemployed for 79 weeks up to 86 weeks in high unemployment states + $100 per week supplement for W-2 and 1099 MEUC/Mixed Earner Unemployment Compensation

§  An individual’s first $10,200 in jobless benefits is tax-free

□       Given $300 per week ÷ 30 hours per week = $10 per hour for on-the-books workers, where the current unemployment is highest, this will slowdown motivation of low-income workers to find on-the-books work till after Labor Day Sep 6, 2021

□       This slowdown will prompt employers to further automate and/or reconfigure low-income workers’ job functions

§  In the mid-term: Increased automation will result in an “old economy” jobless recovery, as happened with the Obama administration’s $900 billion TARP/Troubled Asset Relief Program stimulus jolt during the 2007 – 2009 Great Recession

§  In the long-term: An “old economy” jobless recovery will prompt additional investment in job “old economy” worker re-training and re-direction programs, and accelerate timeframe to raise minimum wage to $15 per hour

þ  Assembly-line, factory workers

þ  Bus drivers, taxi drivers, truck drivers

þ  Phone operators, telemarketers, receptionists

þ  Cashiers

þ  Bank tellers, clerks

þ  Packing, stocking, warehouse assistants

þ  Pharmacy prescription technicians

þ  Information gatherers, researchers, analysts

þ  Journalists, reporters

þ  Pilots

þ  Bartenders

þ  Stock traders

þ  Postal workers

þ  Doctors, anesthesiologists, surgical assistants

þ  Soldiers, guards

þ  Travel agents

þ  Chefs, cooks

þ  Bomb squad assistants

þ  Typists

þ  Switchboard operators

þ  Bowling center pinsetters

þ  Film projectionists

þ  Agriculture assistants

þ  Hotel staff, room service staff

§  In the mid-term: Focus on providing risk management, business consulting, and capital raise services for ed tech and healthcare tech solutions companies

§  In the long-term: In descending order of importance, focus on providing risk management, business consulting, and capital raise solutions to “new” economy industry companies:

þ  Construction companies servicing transportation sector rebuild of roads and highways, waterways, and airport infrastructure

þ  “Green” energy wind, solar, water reduced carbon footprint non-fossil fuel companies

þ  Plant-based health, beauty, food companies

§  The phase out for single filers is 28% or $280 per $1,000 till a cap of $80,000 AGI and head of household till $120,000 AGI and married couple filers till $160,000 AGI and 42% or $420 per $1,000 for married couple filers with 1 dependent; thereafter $0 after each cap level

þ  15% of recipients spend it all

þ  33% of recipients  save it all

þ  48% of recipients to pay down debt

þ  $3,600 per child under

$20 billion

COVID-19 testing, contact tracing

$50 billion

$25 billion

Mortgage aid

$10 billion

$350 billion

$120 billion

15% boost to benefits through Sep

$30 billion