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The coronavirus pandemic has already caused lasting economic damage

Data: U.S. Bureau of Labor Statistics; Chart: Axios Visuals

Fed Chair Jerome Powell mentioned "lasting damage to the economy" as a worry three separate times during his prepared remarks on Wednesday, and called it a reason to continue providing support through fiscal and monetary policy.

The state of play: But experts say the damage already has been done, even as we're still in the midst of figuring out just how much. The labor market is changing and many who have lost their jobs are unlikely to get them back.


  • Specifically, economists worry that many who leave the labor force — especially mothers, older workers, minorities, and many who were outside the labor force and had only recently gotten jobs — will return to the sidelines for good.

Case in point, economist Betsey Stevenson sees a long-simmering child care crisis that could have a significant impact on the number of parents, especially mothers, working over the next 20–30 years.

  • “We are letting the whole child care system erode in such a way that it’s not going to be there for us when we are fully ready to go back," she told Politico.
  • "You’re seeing child care centers that can’t stay in business. They can’t figure out how to reopen. They can’t keep their employees on staff. They’re letting people go."

Additionally, Black workers are significantly underrepresented in "remote-compatible jobs," and were also especially prone to the “last hired, first fired” trend that has meant Black unemployment rebounds more slowly than white unemployment following recessions, the Dallas Fed noted in a recent blog.

  • "The benefit that [Black people] received from the tight labor market in recent years may dissipate as the economy falters."

By the numbers: The U.S. labor force participation rate saw its largest decline ever from February to March and has not recovered much of that ground, even as the unemployment rate has declined.

Between the lines: The Hamilton Project's Wendy Edelberg and Jay Shambaugh warn "widespread bankruptcies could fundamentally change the business landscape," leading to a substantial imbalance between companies and workers.

  • "The COVID-19 recession is going to have scarring effects both on the business landscape and labor markets, and policy makers need to be preparing for those effects now," Edelberg told Axios earlier this month.

The big picture: Americans who have lost their jobs are losing hope. In April, 78% of those in households with a job loss assumed it was temporary.

  • As of July, 47% think that lost job is definitely or probably not coming back, according to the latest poll from AP.

Aug. 4 primaries: Voters visit the polls in Arizona, Kansas, Michigan, Missouri and Washington

Primary elections on Tuesday in fives states see crowded fields of both Republicans and Democrats hoping to make the ballot in 2020.

What to watch: Rep. Rashida Tlaib (D-Mich.) is "fighting for her political life" in a tight primary race against Detroit City Council President Brenda Jones, who Tlaib beat by 900 votes in 2018, The New York Times writes. Senate Republicans are also watching the primary race in Kansas to see who could replace retiring Republican Sen. Pat Roberts.

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"Mulan" will head to Disney+, home to more than 60 million subscribers, for $29.99

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Why it matters: It's a huge blow to movie exhibitors across the country that were relying on the Disney hit to come exclusively to theaters for at least a few months before being made available to consumers at home via streaming.

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Local governments go to war over schools

The next big coronavirus battleground will be over who has the final say on whether schools can stay open.

Why it matters: This involves the safety of young children and their parents, not to mention older educators and staff, and comes at the same time as many of the parents are out of work.

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Podcast: The debate over COVID-19 liability protections

Stimulus talks continue to move slowly, with Democrats and Republicans unable to agree on whether or not to include coronavirus-related liability protections for businesses, health facilities and schools.

Axios Re:Cap digs into the debate, which could reset the cost-benefit analysis for businesses thinking about reopening and employees thinking about returning.

The U.S. is at risk of attacks in space

Other nations are catching up to U.S. capabilities in space, potentially putting American assets in orbit at risk.

Why it matters: From GPS to imagery satellites and others that can peer through clouds, space data is integral to American national security.

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Massive explosion rocks Beirut

A major explosion has slammed central Beirut, Lebanon, and damaged buildings as far as several miles away.

Driving the news: The cause of the explosion is unknown, as are details of potential deaths and injuries. It comes as Lebanon grapples with a crippling financial crisis and the ongoing effects of the coronavirus pandemic.

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Trump's Treasury demand poses another threat to a potential TikTok sale

President Trump said twice Monday that the U.S. Treasury would need to get a portion of the sale price of TikTok, as a condition of regulatory approval.

Why it matters: This is akin to extortion — the sort of thing you'd expect to hear on a wiretap, not from the White House in front of reporters.

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Ford names James Farley as new CEO amid ongoing turnaround effort

Ford announced Tuesday that James Farley will take over as its next CEO, replacing James Hackett, 65, who is retiring after three years in the job.

Why it matters: It leaves Farley to complete the company's ongoing turnaround effort. The transition will be that much harder as the industry tries to navigate the coronavirus-induced economic slowdown which shuttered Ford plants for two months on the eve of some of its most important vehicle launches.

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