Equitable growth essential to economic recovery
A little more than six months ago, Congress united in a rare act of strong bipartisanship to pass, nearly unanimously, the Coronavirus Aid, Relief and Economic Security (CARES) Act. And just as intended, the law provided immediate financial assistance to workers and their families, small businesses and some of the industries hit hardest by the coronavirus pandemic and resulting recession.
The CARES Act worked because, at least for several months, key provisions were designed to help the bottom 90% of income earners who make up the backbone of our economy. The $2.2 trillion in federal aid kept the economy afloat while, for the good of us all, businesses shut their doors.
According to data from the Bureau of Labor Statistics, nearly 22 million U.S. workers lost their jobs as a result of the pandemic recession. By July, 9 million were back at work. The CARES Act helped make those returns possible, but we still have a long way to go to recovery.
Since its onset, the pandemic has revealed in stark relief what those of us who have studied economic inequality already knew. COVID-19 exposed the vast network of underlying fragilities that continue to threaten the health and well-being of our nation.
For example, we now see clearly how affordable child care and universal preschool are core to having a strong economy, both for how they make work possible for parents as well as their role in helping children to thrive.
We also see how necessary it is for workers to earn a living wage to prepare for economic downturns and emergencies, again made powerfully clear by the twin public health and economic crises.
And we can see how small businesses – the corner store, cafe and diner, alongside the dry cleaner and dog groomer and all the rest – are the backbone of our communities and yet so fragile in this crisis.
Indeed, policies that promote equitable growth across the income spectrum are essential if we want an economic recovery that is broad-based and sustainable.
The pandemic has also unmasked all the ways that health care is a core economic issue. It starts with the right for workers to have proper protective equipment and be able to stay home when they are sick. These workplace issues have become a matter of life or death.
Then there are the sicknesses and deaths among the elderly, those with underlying health conditions and communities of color that laid bare the consequences of decades of underfunded public health programs and the legacy of a lack of affordable health insurance before the Affordable Care Act.
Though the CARES Act helped save us from economic disaster, it has now mostly expired. In the wake of failure to extend relief, job growth has stalled.
Job losses become permanent
In its most recent report, the Bureau of Labor Statistics indicated that losses once thought to be temporary from the pandemic are becoming permanent, and that the number of new job openings in August slowed after three months of increases.
Now in September, we see an economy where more businesses are going bankrupt. Major industries are announcing big layoffs. And renters with months of overdue rent will face eviction as moratoriums eventually expire.
Meanwhile, Congress has failed to pass an additional relief package that expands support for workers, businesses and families’ economic security. When they do, it’s important that those measures stay in effect until the economy is healed.
We must look to reverse the decisions made over the past 50 years that made our economy so fragile, and instead focus on laying the foundation for a strong economic recovery characterized by equitable growth.
All workers need paid sick leave
This means paid sick leave for all workers, regardless of how big their employer is, that reimburses 100% of their wages. It means injecting a large infusion of funds for state and local governments, which have already reduced spending and laid many workers off.
It also means extending unemployment insurance benefits to help those who have lost their jobs because of the pandemic, many of whom are Black, Latinx and Native American, and who have disproportionately suffered from COVID-19.
And finally, no relief package can put us on a path to long-term stable recovery without putting into place stronger programs that trigger automatically to stabilize the economy and support workers and families. These automatic stabilizers, as they’re called, increase spending at the first sign of a recession and decrease when the economy recovers.
To be clear, no true recovery can begin without first containing the coronavirus. As we look ahead to the fall and the potential for the virus to rebound as Americans spend more time indoors, we should be laser focused on what policies we can put in place now to begin that recovery.
Only then can we effectively respond to the recession and build a more resilient economy for the future.