We are all in the crosshairs of the economic fallout of the COVID-19 pandemic. Wall Street is drenched in red ink as markets are battered by sickening slides. But as business closings mount and millions of working people are suddenly without a paycheck, it’s not Wall Street that’s most worrisome – it’s Main Street.
The hard fact is that the individuals most impacted by this economic collapse are those least equipped to sustain the hit. They are restaurant staff and office cleaners, hotel workers and baggage handlers, childcare providers and Uber drivers, and workers in malls, movie theaters, and more. These low-wage hourly workers were already struggling to keep a roof over their heads and food on the table. Their low pay and less stable work have left their personal and financial health precarious. They have no rainy day fund. And the sudden plunge into unemployment exposes the gross inadequacy of our social safety net.
In 2008, in the painful throes of the Great Recession, we didn’t do enough. Extraordinary measures were quickly enacted to stabilize the financial system. But we did far too little to stabilize households. In the recovery period, we encouraged people to find work, to invest in themselves, and build their skills to be ready for new jobs. But we ignored the fact that many of these new jobs, particularly in the large and growing service sector occupations, don’t provide enough to make ends meet. Our last approach to economic recovery brought with it widening inequality that weakened working-class households and divided our society. And race, gender and place continue to have outsize influence on the likelihood of being on the losing side of our country’s widening economic divide. Moving forward, we must adopt a better approach that offers broader economic mobility, prosperity, and inclusion.
There are a variety of proposed solutions out there. And in the current crisis, we need to pursue them all at once. President Franklin Roosevelt, captain of the New Deal, noted: “To reach a port we must set sail – Sail, not tie at anchor. Sail, not drift.”
Now is the time to follow FDR’s model. Let’s start with getting cash into the hands of the people who suddenly lost their limited livelihoods. Applications for unemployment are already spiking, and state administrative systems are already strained. Let’s simplify applications and waive qualifying requirements (such as requiring job search —hard to do when you’re self-quarantined). But as benefits are insufficient in most states, federal efforts to speed cash to households are also essential.
Putting cash in people’s hands is critical, but it is not enough, or fast enough, to meet basic human needs. Working with food distribution charities and expanding access to SNAP benefits can help ensure that people have access to food. Businesses can help by implementing practices to prevent hoarding of food and other essential items and contributing to relief efforts as they can. Professionals trapped in their home offices are saving money on commuting costs and entertainment; they can donate that money to charities providing emergency assistance. And supporting local small businesses whose survival was already tenuous before the crisis is especially important right now.
In 2008, state and local governments quickly became cash-strapped as tax receipts plummeted and the need for assistance grew. Today, many local governments are banning evictions and maintaining utilities for households that suddenly can’t pay their bills. These responses can be sustained without a large cash infusion and will be essential to protecting the well-being of the most vulnerable. In this moment, faced with a viral epidemic, such measures that help people maintain their homes protect not only the vulnerable, they protect the well-being of us all.
For four decades public policies and business practices combined to weaken the physical and financial health of the working class. Now we need extraordinary measures from the public, private, and charitable sectors to address the interrelated goals of preventing economic calamity and stopping the spread of a deadly disease. Morally, we owe it to working people. Practically, the well-being of all of us depends on it.
We must recognize the oncoming tsunami of human and community needs. The large numbers that have lacked access to decent health care and childcare have struggled with low wages and limited employment benefits will now need extraordinary help. But as we recover, we must think bigger and beyond the current moment. The challenge ahead is not just getting the economy moving again and getting people back to work, but building an economy in which hard work is once again a pathway to a decent living and a life of dignity. In this perilous moment, we must choose. What kind of nation do we want to be? Will we build a future in which our tired, working poor, and beleaguered masses can at long last breathe free? The choice is upon us now. This time, let’s do everything.
Tweet We are in the crosshairs of the #COVID19 pandemic. But as business closings mount and millions of working people are suddenly without a paycheck, it’s not Wall Street we need to worry about – it’s Main Street.
Tweet The people most affected by the economic impact of #COVID19 are those least equipped to sustain the hit. And the sudden plunge into unemployment exposes the gross inadequacy of our social safety net.
Tweet We must recognize the oncoming tsunami of human and community needs from #COVID19. Those with low wages and limited benefits need extraordinary help. We owe it to them, and ourselves, to meet this challenge.
Tweet As we recover from the effects of #COVID19, the challenge isn’t just getting people back to work. It’s building an economy where hard work is once again a pathway to a decent living and a life of dignity.
The Economic Opportunities Program advances strategies, policies, and ideas to help low- and moderate-income people thrive in a changing economy. Follow us on social media and join our mailing list to stay up-to-date on publications, blog posts, events, and other announcements.