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Features
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MONDAY, APRIL 20, 2020
Paul Wiseman
WASHINGTON (AP) - The sick who
still go to work because they have
no paid leave.
Families who face ruin from
even a temporary layoff.
Frontline workers risking infect-
ion as they drive buses, bag takeout
meals and mop hospital loors.
For years, inancial inequality
has widened in the United States
(US) and elsewhere as wealth and
income have become increasingly
concentrated among the most
afluent while millions struggle
to get by. Now, the coronavirus
outbreak has laid bare the human
cost of that inequality, making it
more visible and potentially worse.
Congress, the Trump adminis-
tration and the Federal Reserve
have mounted the largest inancial
intervention in history - a full-scale
drive that includes mandating
sick leave for some, distributing
USD1,200 cheques to individuals,
allocating rescue aid to employers
and expanding unemployment be-
neits to try to help America survive
the crisis. Yet those measures are
only temporary. And for millions of
newly unemployed, they may not
be enough.
The disaster that is igniting
what's likely to be a deep recession
also raises the question of what
happens once life begins to edge
back to normal.
Will the US remain an outlier
among wealthy countries in
providing limited protections for
the financially vulnerable? Or will
it expand the social safety net, as
it did after the Great Depression
of the 1930s but largely did not
after the Great Recession that
ended in 2009?
"Maybe there will be a cultural
shift,'' said Senior Economist at
the Economic Policy Institute Elise
Gould. "I see it as a great opening
to try to (provide) those labour
protections that low-wage workers
didn't have before.''
Gould
notes
that
the
government's suddenly expanded
role now in distributing relief
checks, expanding health beneits
and sick leave and supplementing
state unemployment aid would
make it easier to extend such
programmes even after a recession
has ended. Doing so could have
the longer-term effect of reducing
inancial inequalities.
Whether the government ends
up adopting any long-lasting policy
reforms will depend in part on which
party controls the White House and
Congress beginning in January. In
the meantime, the topic is sure to
drivemuch of the campaign rhetoric
as the presidential race moves
toward the November election.
Alone
among
advanced
economies, the US doesn't require
employers to grant sick leave and
paid time off. America's system
for providing unemployment aid,
a patchwork of state programmes,
isn't as generous or eficient as
Europeangovernment programmes
that subsidise wages or provide
safeguards to limit layoffs.
America's minimum wages also
lag far behind those in most of
Europe, though many states have
raised their minimums in recent
years. In 2018, the Organization
for Economic Cooperation and
Development (OECD) concluded
that the US national minimum wage
paid 33 cents for every USD1 earned
by workers in the middle of the
earnings spectrum. That contrasted
with 46 cents in Germany, 54 cents
in the United Kingdom (UK) and 62
cents in France.
The coronavirus has struck
at the most vulnerable. African-
Americans account for 42 per cent
of thenearly3,300COVID19deaths
that The Associated Press reviewed
- twice their share of the population
in the areas covered by the analysis.
Blacks as a group earn less, endure
higher rates of unemployment and
have less access to health care
than other Americans. They also
suffer disproportionately from the
underlying conditions that make
them more vulnerable to COVID19:
Diabetes, obesity, asthma.
The inancial pain, too, has
landed hardest on the neediest as
the economy locks down to ight
the outbreak. The United States
last month lost 713,000 private
sector jobs. Jobs in leisure and
hospitality (mostly restaurants and
hotels) accounted for 64 per cent
of the losses. And those workers
earn an average of just USD16.83
an hour, 41 per cent less than the
average American.
They are people like Alexi
Ajoste, who worked at a Panera
Bread shop for three years
before being furloughed late
last month. Ajoste, a 20-year-old
from Tempe, Arizona, has iled for
unemployment beneits.
"I have a savings account
and have money backed up for
emergencies, but it scares me,"
Ajoste said. "I don't know if my
savings account is enough for all of
this. I feel like the unemployment
checks will be enough for the next
couple of months... As long as it
doesn't last four or ive months, I
think I'll be good."
Congress' rescue plans are
intended to ease the pain. They
require companies with fewer than
500workers to offer paid sick leave,
although employers with fewer than
50 can seek an exemption. The
government is sending USD1,200
cheques to Americans who earn up
to USD75,000 and smaller cheques
to many who earn more.
The rescue plan extended
unemployment beneits for the irst
time to part-time and gig workers
such as Uber drivers. And it added
USD600 a week to existing state
unemployment payments. But
states have been swamped by
claims for jobless beneits - nearly
17 million over the past three weeks
- and are struggling to deliver the
new federal aid.
Shamira Chism, for example,
who was laid off from her job as a
A matter of inequality
A closed sign in front of the Hogle Zoo, due to the coronavirus outbreak, in Salt Lake City. PHOTOS: AP
The pandemic has exposed the great divide between the rich and the
poor in the United States. But will it spur lasting remedies?
line cook at a Nashville restaurant
three weeks ago, says she's getting
by on state unemployment beneits
of USD275 a week. But she's still
waiting for Tennessee to upgrade
its systems to deliver the additional
USD600 a week in federally
provided beneits.
Throughout
US
history,
economic
catastrophes
have
sometimes
led
to
lasting
programmes to beneit ordinary
people - and sometimes have not.
Former US President Franklin D
Roosevelt drove through a series
of lasting changes to the economy
after the Depression struck, to
provide Social Security pensions,
for instance, and to make it easier
for workers to form unions and
bargain for higher wages and better
working conditions.
Former US President Barack
Obama countered the Great
Recession with a stimulus package
and pushed through legislation
that provided health insurance
coverage to millions of Americans.
But a backlash by conservative
critics, decrying what they
called meddlesome and costly
government programmes, stymied
further action. The government
ended up doing less to help
the economy recover from the
Great Recession than it had after
previous downturns.
This time, said Alexandra
Cawthorne Gaines of the liberal
Center for American Progress,
“What we want to see are long-
term structural changes”, including
expanding access to health care.
In light of the crisis, she said, there
may be more willingness, from
Republicans and Democrats alike,
to better protect the neediest.
Gould at the Economic Policy
Institute said the country needs to
strengthen its social safety so the
needy aren't left so vulnerable in
the next public health crisis.
"This is not the last time this is
going to happen," she said.
Small businesses are shuttered closed during the coronavirus epidemic in
the Crown Heights neighbourhood of the Brooklyn borough in New York
The seating area of a food court at Assi Plaza is closed-off in Niles, Illinois