The action this economy needs How to slow the bleeding

It may be that our leaders are starting to wake up to the peril posed by the coronavirus given Monday’s announcements calling for the widespread curtailment of most everyday activities. The public health toll has shot up, and extreme measures are necessary to contain the spread, and gird for the looming inundation of infected patients headed for our hospitals.

On Tuesday, the White House announced its support for a large economic stimulus package. That’s certainly needed, but let’s keep the focus where it should be: to head off the epidemic of necessary job loss and business closings before it becomes an economic contagion.

Elected officials have asked businesses and workers to shut down and cease what they do out of justifiable public health concerns. The first order of business for economic stimulus is to make whole those whose jobs ended because public safety demanded that.

Broadway theaters, college and professional sports, and public movie-viewing and movie production have shut down indefinitely. And now schools, restaurants and bars are closed, and the White House is urging an end to all discretionary travel and gatherings of more than 10 people.

New York City has been through a lot: the 9/11 attack, the financial crash, Superstorm Sandy. But we have never before seen such affirmative actions, and the economic toll from these curbs is impossible to grasp — except that it will be unprecedented and dramatic.

In New York City, it looks like 500,000 low-paid workers in restaurants, neighborhood services, taxi/Uber/Lyft drivers, as well as thousands working in the performing arts and a range of local service businesses will lose their jobs and incomes. Restaurant and other small business owners are getting clobbered, too. Income losses will top $1 billion, maybe two. And that’s just this month — we don’t know when it might end.

Here’s a different tale of two cities. Half work for a salary and can work remotely when there’s no alternative. The other half are paid on an hourly basis and don’t get paid when they don’t work. Working remotely isn’t an option when cutting hair, mopping a floor or driving a passenger. And the businesses providing those face-to-face services are in the same boat. Plus, we’re asking restaurants to close and their workers to go home.

Our safety net has been getting more frayed all the time — but it was never designed for a time when face-to-face services can’t be provided, or when public health would require businesses to shutter en masse.

The House-passed Families First Coronavirus Response Act now in the Senate is a necessary first step in providing free testing and some measure of paid sick day coverage to about 20% of workers. It includes essential fiscal relief to state governments dealing with medical emergencies. But more is needed ASAP.

Checks should be sent immediately to workers losing their jobs as a direct or indirect result of publicly mandated closings. Unemployment insurance benefits should be increased and made more readily available, and those who lost jobs but aren’t able to access UI should receive additional financial support — whether they are wage employees or independent contractors.

Small businesses that are adversely affected as a result of mandated closings, such as locally owned restaurants, should also be assisted, based on the number of jobs they provide. Bailing out big corporations like the airlines that used windfall tax cuts to buy back their stock should be lower on everyone’s list for assistance. Strings must be attached to make sure workers come first this time.

We’ll also need to increase state and local fiscal relief, because anytime there is a catastrophe, state and local governments keep our communities together, but at a cost.

If we act aggressively now, the damage will be easier to contain.

Parrott is director of economic and fiscal policy at the Center for New York City Affairs at The New School.