WASHINGTON ― When the next recession comes, many people who lose their jobs will have a harder time getting unemployment insurance, an important lifeline for most Americans. In several states, these people could have to pee in cups just to qualify.
Those who don’t get benefits will have to settle for the sort of fake jobs our economy produces in abundance — a contract job in an Amazon fulfillment center, say, or a gig delivering groceries to people who still have careers.
Talk of a recession is in the air again after the recent wobble in the stock market. It’s highly likely the next recession will occur in the coming three years, while President Donald Trump is still in office. Maybe it’ll happen as a result of his inflation-baiting tax bill. Maybe it’ll have something to do with excessive consumer debt. We don’t know what the cause will be, but we do have some idea of how Americans will experience the next sustained economic slump. Since the Great Recession, during which the GOP repeatedly if grudgingly went along with former President Barack Obama to extend unemployment insurance, Republicans on both the state and federal level have pushed to make benefits less generous and harder to get.
Meanwhile, the holes they’ve created in the safety net will be filled by so-called “alternative work arrangements” — gigs — which offer fewer protections for workers than full-time jobs.
By design, America is ill-prepared for its next recession, and it’s going to suck.
It’s the U.S. government that measures economic growth and the unemployment rate, but it’s actually up to a private nonprofit organization called the National Bureau of Economic Research to tell us when a recession has begun. Since the 1920s, this organization has had a committee of eggheads looking at a variety of indicators, especially personal income levels, unemployment rates and the gross domestic product, to determine when a recession has started.
A recession starts after economic activity has reached its peak. Right when things are better than ever is when they’re about to get worse. The decline in business conditions has to affect the whole economy; it can’t just be a single-sector slump, like the one Amazon has wrought among retailers. But you won’t know the recession has started until later, because the NBER waits until the government has finished its data revisions, which happens over a period of months. It wasn’t until 2008 that the organization announced that the last recession had begun in 2007.
There have been 11 recessions since World War II. The current economic expansion began in mid-2009, making it the third longest in history, and it can’t last forever.
Expansions don’t just die of old age. One thing that can trigger recessions is the Federal Reserve hiking interest rates to quell inflation. The Federal Reserve is currently in the process of raising rates, but inflation is still low and most economists see no cause for concern in the immediate future ― though economists are not exactly great at predicting what will happen.