COVID-19 proposals pit labor vs. capital
Republicans and Democrats are facing off over how to spend economic stimulus to mitigate the Coronavirus Recession: should it benefit people or companies?
The return of American politics to a fight between labor and capital is a welcome respite from the culture wars. There are few debates more quintessential than what constitutes a respectable return on investment or what is the fair value of a person’s limited time on earth.
The pandemic adds an elemental quality to the debate over the government’s role in the economy. Everyone agrees the virus is responsible for the recession, and governments have a critical role in slowing its spread. But how much should the government make up for lost revenue?
When we still were naive in April, politicians believed we could contain the virus within a few months. Sending out $1,200 checks to middle and low-income Americans and padding unemployment insurance benefits by $600 to keep people at home seemed like a small price to pay.
GOP lawmakers took some solace from the fact that of $7 trillion in stimulus, counting the Federal Reserve’s spending, 95 percent went to prop up businesses and markets. The Payroll Protection Program also promised free money to employers if they retained workers.
These two approaches perfectly contrast the competing proposals for what to do as the crisis assuredly drags on for another year.
Republican leaders have made clear their disdain for the supplemental unemployment payments, which have empowered workers to reject low-paying jobs with no health insurance during a pandemic. Texas Sen. Ted Cruz wants to slash the payments to force people back to work.
This reflects the rather dim view many conservatives have of the working class. Unless you starve them, they say, impoverished people will loll around watching television.
Senate Majority Leader Mitch McConnell put forward a $1 trillion GOP plan Monday. He proposes sending another $1,200 check, but the supplemental unemployment insurance would drop first to $200 a week and eventually to 70 percent of the recipient’s previous income.
Liberals, who maintain a similarly cartoonish caricature of the investing class, are mocking the bill. They believe employers too often use their market power to pay starvation wages and then toss away the sick and
injured like used tissues.
Hence the Democratic plan to spend $3 trillion to extend the supplemental unemployment payments through the end of the year, provide $1 trillion to bail out local governments, and issue another round of $1,200 checks.
Republicans complain the unemployment insurance pays more than what 60 percent of the workers were making before the crisis, according to the University of Chicago.
Here’s a curious little statistic: the supplemental benefits pay the equivalent of a full-time job at $15 an hour, according to the Congressional Research Service. There is a whole progressive campaign out there to raise the national minimum wage to $15 an hour, which at $31,000 a year is what many consider a living wage.
If employers want to lure workers back, they should offer a better package, progressives say.
Realistically, very few low-income people can survive on 70 percent of their poverty-level wages. The Republican plan would force parents with sick kids, adults with frail parents, and people with pre-existing conditions to return to high-risk jobs with no insurance.
The United States already has the highest poverty rate, the highest uninsured rate and the unhealthiest population of any wealthy country. A majority of American voters are more worried about some lazy person taking advantage rather than fighting poverty.
Since 1980, American voters have elected politicians from both parties who have prioritized the economy and business over the people’s health and welfare. In the middle of the COVID-19 crisis, we are allowing employers to overwork, underpay and under-insure the workers who make sure we have food on the table and medical facilities for when we catch the disease.
The virus has killed 5,800 Texans, many more people than the 9/11 attacks over which we started a two-decade war. Instead of protecting the American people from the disease’s threat to our way of life, the GOP plan is to use workers as cannon-fodder, accepting the inevitably higher infection and death rates as a small price to pay to reopen businesses.
The GOP plan also ignores the ugly truth that tens of thousands of businesses cannot return to normal until most consumers are vaccinated, next summer at the earliest. Millions of workers will need help until then.
In less than 100 days, American voters will decide whether to continue along this path or try something new. The choice between the parties is clear: labor or capital.