|Two Kinds of Crises: Two Kinds of Challenges
The Coronavirus Pandemic — mass contagion and deadly illness compounded by economic freefall — is an even greater challenge to public policy than an economically-induced crisis like the recent Great Recession.
Both crises require extended and greatly expanded coverage of income support programs like Unemployment Insurance as well as government provision of the other essential goods and services that should, in a just society, be available to all—not solely doled out or extended in emergencies.
Nurses preparing to transport ill patients during the 1917-18 flu pandemic (Library of Congress)
In an Economically-Induced Recession, government compensation for lost work and income helps to maintain consumption, restore jobs, and keep unemployment from mushrooming from recession into depression. Such intervention by the Federal government prevented the Great Recession of 2007-2008 from becoming a Great Depression like the one that occurred with minimal Federal intervention in the aftermath of the 1929 Stock Market Crash. Yet, even with rapid intervention, including a huge bailout of the economy’s financial sector and a multi-billion-dollar stimulus, it took nearly a decade after this first 21st Century meltdown for the unemployment rate to reach its pre-recession level of 4.7 percent. And even then, millions of workers — two-and-a half times the official unemployment rate — were either jobless or forced to work part-time, not to mention millions more who toiled full-time, year-round but remained poor. This denial of the opportunity to earn a living-wage for millions of Americans points to the need for a Guarantee of Living-wage Work.
A Pandemic-Induced Recession is both a public health challenge and a much greater economic challenge than an economically-induced recession — a loss of jobs due to lack of aggregate demand but also a loss of workers, many too sick to work, others advised to self-isolate or simply fearing contagion. Consequently, there is a need for more stimulus spending and more generous and extensive government benefits.
Already, the COVID-19 relief is in the trillions, and more is contemplated–even by an Administration that only recently tightened access to essential goods and services to poor and working-class individuals and families. The Pandemic, with its critical need for medical care and the possibility that affected individuals would endanger themselves and others by foregoing unaffordable treatment, underscores the need as well as the obligation to provide free care for all those afflicted by the virus.
The COVID-19 Pandemic also underscores the need for permanent reform: the assurance of health care for all as a human right. Never again should any of our people have to suffer both illness and the added pain of inability to pay for treatment. Nor should the lack of Paid Sick Leave endanger both workers and the population at large.
Pandemics are a mix of mass unemployment and dangerous, even deadly employment. The need for health care mushrooms, and caring for the ill and dying becomes even more demanding, stressful, and risky to the health of care-givers than in ordinary times. Some health-care workers are highly skilled and well-paid, but others are poorly compensated for life-threatening labor. That those who care for the sick and dying should have to bear these burdens without sufficient equipment and adequate protection is a national disgrace—one that should never be repeated.
Surviving the crisis is impossible without other vital workers: cashiers and shelf stockers in grocery stores and mail-order warehouses, pharmaceutical personnel, building custodians, transportation workers, and many more. A shockingly large number of these vital, endangered workers earn poverty wages, an injustice that highlights the inadequacy of U.S. labor law and the need, among other reforms, for a decent minimum wage–a fight for more than $15!
Working at home: an unequal opportunity. Technology makes it possible for some people to work in the safety of their homes during this Pandemic. However, just 16% of Latinx workers and 20 percent of Black workers are able to work at home, compared with 30 percent of white workers. Both the racial-ethnic disparity and the fact that a minority of all workers are unable to take advantage of this option underscores the need for universal broadband access and the availability in every home of the equipment needed to take advantage of that access. This is needed not just to permit more people to work remotely, but also to facilitate socialization, the participation of students in remote learning, and access to entertainment for all ages while self-isolating.
The Need for Jobs When People Are Able to Return to Work
Imagine a world:*
- Where everyone who wants to work has a living-wage job.
- Where no one needs to cobble together multiple jobs just to make ends meet
- Where joblessness and its deeply debilitating consequences no longer exist.
- Where millions work in concert to heal our environment, rebuild our physical and care infrastructure
*IMPORTANT NOTE: This picture and above five lines are from the Job Guarantee Pledge. See jobguaranteenow.org Please sign the Pledge if you haven’t done so already!!
A nation with living-wage jobs for all would be better able to withstand a pandemic and certainly better equipped to recover from one. It would be a nation with millions fewer unemployed, millions fewer working poor, millions fewer with little or no dollars to tide them over, millions fewer ill-housed or homeless, millions fewer dispirited and impoverished by joblessness and limited future prospects, and millions fewer burdened by debt.
The centerpiece of current proposals for guaranteeing work to unemployed and underemployed individuals is an updated, 21st Century Model of the direct job-creation programs that provided useful work for millions of unemployed workers during the Great Depression. The best known of these programs were the Civilian Conservation Corps (CCC) and Works Progress Administration (WPA), and Job Guarantee legislation based on this strategy is currently pending in Congress. See H.R. 1000. These and other New Deal work programs not only employed the jobless and destitute but greatly enhanced the country’s cultural, environmental, and physical resources–literally changing the face of the nation.
A Job Guarantee (JG) during a public health crisis could provide badly needed services while providing income security for individuals who might not be eligible for adequate levels of cash assistance. During an ordinary recession, when workers are able to work but employers don’t need their services, a job guarantee program would allow society to replace the lost earnings of unemployed workers without losing the benefit of their services and without allowing their skills to erode through idleness. As the New Deal demonstrated, this strategy allows society to enrich itself with additional public goods and services, notwithstanding the decline in private-sector production.
A recession caused by fear of contagion and/or public health measures ordered to prevent the contagion from spreading is different. Because of spontaneous isolation or directives to do so, most workers are rendered unavailable for work, unless they can do so remotely from home or are providing an “essential service.” Under these circumstance individuals employed by a job guarantee program would be similarly constrained from reporting for work. The sponsors of job creation projects would have more latitude than private businesses to undertake safe community service work, but those opportunities are not unlimited. Accordingly, some form of support other than a job guarantee must be provided for large numbers of workers.
The traditional way of doing this is for the government to provide unemployment compensation and other public benefits to partially or fully replace lost wage income. However, there is another strategy. A number of European countries are currently relying on job retention schemes rather than unemployment compensation to protect both worker income and the viability of business enterprises during the COVID-19 pandemic. In effect, governments are using funds that otherwise would be spent on unemployment compensation to subsidize the cost of keeping currently unneeded workers on payroll—even if there is no work for them to do.
The superiority of this method of providing income assistance to workers who are effectively unable to work is reflected in their unbroken receipt of wage income, reduced levels of economic stress, less strain on the government’s social welfare bureaucracy, and the greater ease with which businesses can restart their operations as people are able to return to work. With a secure funding source, a job guarantee program could adopt this strategy even if the government relied on its unemployment compensation system to deliver wage replacement benefits to other unemployed workers during a public health crisis.
A Job Guarantee would provide a powerful remedy for a post-pandemic recession. Even with an aggressive worker retention scheme, some workers will still be laid off during a public health crisis because some businesses will fail notwithstanding government assistance. Those workers will have to rely on unemployment compensation benefits through the balance of the public health crisis along with workers who were unemployed when the crisis began.
A recession triggered by a public health crisis is also likely to persist after people are able to begin returning to work—unless the public health crisis is very short. That’s when the need for a job guarantee program would reassert itself. Governments are likely to reduce the size and/or limit the duration of unemployment insurance benefits at that point; and even if they do not, unemployed workers and society would be better served by providing useful, decently paid work for those workers who otherwise would remain idle. In other words, as people are able to return to work, any who lack a job to return to will be best served by a job guarantee program. It would preserve their income, boost their morale, and allow them to retain their skills while providing society with public goods and services that otherwise would not be produced.
Using a direct job creation program to deliver a fiscal stimulus to an economy in recession is also likely to be more effective in combatting the recession. It would create more jobs per dollar of stimulus spending. It would create them faster. It would better target its job creation effect on those communities and population groups that most need it; and it would deliver its economic stimulus more directly and evenly to the consumer sector of the economy whose recovery will more reliably drive a recovery in both business investment and state and local government spending.
A Job Guarantee Would Advance Other Social Rights. President Franklin Roosevelt’s landmark proposal for a Second or Economic Bill of Rights (1944) began with a Job Guarantee: “The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.” The other rights in his proposed Second Bill of Rights include adequate wages and farm income, adequate medical care, a good education, a decent home, and security in old age. A year later, in repeating his call for Congress to enact legislation realizing these rights, FDR described the right to an adequately paid job as “the most fundamental” of them all because it is the one “on which the fulfillment of the others in large degree depends” (italics added).
A Job Guarantee and the Right to Decent Housing. How would a JG contribute to the solution of the affordable housing crisis? First, if everyone who wanted to work had access to living-wage employment, the level of subsidization needed to ensure the availability of decent housing for all households would be reduced. Second, the jobs provided by a job creation program designed to secure the right to work would provide the resources needed to eliminate the current shortage of decent, affordable housing in the United States. The same dual effect would help secure other economic rights.
A Job Guarantee would also contribute to mitigation of climate change and a carbon-free economy. The COVID-19 pandemic should be a wakeup call to the need for us to transform (not just reform) our civilization’s relationship to nature. We need to use the lessons learned from the pandemic to prepare for and try to mitigate the slower-moving but ultimately more threatening climate change crisis. In fact, the two crises are linked. Humanity’s steady encroachment on and degradation of the habitat of wild animal populations is a driver of both climate change and the animal to human transmission of diseases to which humans lack immunity. Our carbon-spewing economies also contribute to the rise and spread of disease by providing an environment in which vector-borne diseases are more likely to thrive. As Dr. Arturo Casadevall, a professor of microbiology and immunology at Johns Hopkins University explains, when pathogens are exposed to gradually warmer temperatures in the natural world, they become better equipped to survive higher temperatures in the human body, and that diminishes the effectiveness of one of our body’s primary defense mechanisms against disease—fever.
A federal Job Guarantee program could help counter the trends that contribute to climate change and the increased risks of novel disease outbreaks in several ways. First, it would provide a large pool of additional resources for the fight against climate change. Second, it would help solve the problem of how to compensate workers who lose jobs as a result of the phase-out of carbon-dependent technologies by providing them guaranteed reemployment in socially useful jobs, with paid training to whatever extent they may need it, on projects that would help rebuild the communities in which they live. It would promote new job creation that does not degrade either human or non-human animal habitats. Finally, a job guarantee would help neutralize the most powerful deterrent to the adoption of policies to combat climate-change–a fear of job loss.
This is why we believe that as soon as workers are able to safely begin returning to work following the COVID-19 public health crisis, the New Deal direct government job creation strategy should be deployed to provide work for everyone who wants it.