So while I have a break in the show, here's something I was thinking about as a way to conceptualize how layoffs can permanently destroy societal wealth, even if the underlying issue were to fade quickly. 1/
If you've ever started a new job, even if it's a great fit, and you're very well qualified for it, you probably know that your first few weeks on the job aren't particularly productive. /2
You're getting to know your new colleagues. you're setting up email. You're learning the culture of the workforce. The pace. How the company operates. Even the very best job/employer fits take awhile until you're really at your peak and firing on all cylinders.
Most people who are 'good at their jobs" aren't just good at their abstract careers or occupations, but are good at operating within that specific company or organization. /4
We're already seeing millions of people lose their jobs. According to Gavin Newsom 1 million in California alone. The link between workplace and worker is getting severed all over the place /5
Now let's say in some total fantasy scenario, where all laid off workers get full salary UI, and they find a cure for COVID 19 by the summer, and there's a huge stimulus package that provides enough work for everyone to get back to work /6
Of course, this is a fantasy. There's no imminent COVID 19 cure, and the fiscal response won't be enough. but even in that period of time. Some people will move to new locations. Some people will just retire. Some business owners will give up and permanently close /7
Imagine millions of workers all trying to return to the workforce, having that first week or two all over again. Learning the company rules. Getting to know their employees. Filling out their healthcare and on and on. /8
if we don't get the layoffs contained immediately, we're looking at that 'first week at work" for a huge swathe of the economy, with devastating effects for productivity and so on, even if people's balance sheets are somehow made whole (which they won't be) /8
Tomorrow we're going to see the biggest weekly jobless claims print in history by far, and because of how long we've already let the fires rage, we're going to be paying for this for a long time. /9
$2 trillion or $6 trillion or whatever might seem like a lot, but it'll be a drop in the bucket compared to the alternative of letting the downturn spiral unabated. The cost of not going huge -- by permanently degrading how individuals and firms operate-- are almost unimaginable.
