Should government do more for the working poor during pandemic?

Editor’s noteRobert Bruno is a professor of labor and employment relations at the University of Illinois, Urbana-Champaign and the director of the Labor Education Program in Chicago. Bruno, an expert in labor history and politics, spoke with News Bureau business and law editor Phil Ciciora about how the government can help working-class people survive the economic hardship wrought by COVID-19.

Do we need another round of stimulus checks similar to what most taxpayers received last spring?

We definitely need a second round of stimulus checks. When the economy is bad, it needs monetary stimulus, and the only entity that can step in and help is the federal government. There’s real evidence that if not for the first round of stimulus checks in March, the economy would be in measurably worse shape. That $1,200 helped folks maintain their mortgage or rent payments, put food on the table or gas in their car, or buy diapers for their children. For working people, every penny of that check got spent.

You can see the positive impact in food and retail sales that occurred after those checks were sent out. The stimulus amount was small, but there was a level of economic activity that turned those dollars over multiple times. And that meant thousands of other people stayed employed to provide goods and services to those people spending their stimulus dollars.

Along with other financial relief measures, the payments really did prevent us from collapsing into a second Great Depression, and they made a huge difference to millions of workers who desperately needed the additional income. But the government should really think big and play a larger role than it already has been in responding to the economic crisis brought about by COVID-19. Infusions of income should properly function as economic stabilizers. Stimulus checks and increased unemployment benefits should be automatic, so when things start going badly, benefits kick in and don’t go away until the storm has passed and there’s less need for government help.

What happened instead is the benefits mostly went away – but the pandemic didn’t. And now we’re left with political in-fighting over how to reach a compromise on another round of stimulus. So not only should benefits be extended and increased, they should be automatic. They should become the safety valve that protects people during hard times. That kind of government support would make an enormous difference for the working class.

Congress is similarly grappling over whether to extend enhanced federal unemployment benefits. How important is the extra $600 in weekly unemployment benefits for the average laid-off worker?

It’s no exaggeration to say that the extra $600 is vital to the unemployed. In some ways, it’s existential. It’s the difference between having a roof over your head or being homeless; being fed or going hungry. Additionally, it helped small businesses stay open, and since we punitively tie health care benefits to employment, people who remain employed were able to keep their medical coverage.

What’s been lost in this debate is that we let the states set the minimum and maximum weekly unemployment compensation. The average benefits are approximately $330 per week. Having that extra $600 from the federal government will not move anyone into the upper or middle class, but it will help roughly 25 million people regroup until things get better. But without the extra $600, regular state unemployment insurance will be insufficient for working people to pay for basic necessities in any state.

The bigger question is, how did we get here? It’s a consequence of a deeply inequitable and broken economic system. We’ve created millions of jobs over the past 10 years, but the vast majority are relatively low-wage gigs that don’t expand the middle class. They keep people living paycheck to paycheck. And it is true that a fair number of unemployed workers getting the extra $600 in weekly unemployment benefits actually are earning more than they were earning in their jobs. But that’s not their fault. That should be seen as an indictment of the marketplace and what employers are paying people for a day’s work.

All of this just further reveals the structural problems of our economy. We have too few well-paying jobs, and technology continues to eliminate the need for workers.

Hazard pay for essential workers such as grocery store clerks and retail sector employees has all but disappeared, even though their jobs haven’t become any less dangerous. Should that type of pay be reinstated for workers and other essential personnel who can’t work from home?

Some employers have provided bonus pay due to dangerous working conditions, but keep in mind that a bonus is a one-time thing. It doesn’t adjust your base pay, which is often related to other earned benefits such as retirement.

I co-wrote a study about essential workers in Illinois and found that they were paid significantly less than those workers who were able to work remotely. The most important workers in our society, the ones who were actually holding up the entire economy, not only were paid less but also were working under stressful, volatile conditions. And typically, those essential workers were women and people of color, the latter of which were generally at the highest risk of being uninsured and suffering bad outcomes if they were infected by the coronavirus.

For those employees, we need to create a post-pandemic future that protects their rights as workers and rebuilds the middle class. The class disparities could be addressed by a range of policy changes, including a single-payer health care law, paid sick leave, paid family leave, and a stable and secure scheduling law. But perhaps the change with the biggest immediate impact would be fast-tracking a $15-per-hour minimum wage.

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