Three Takeaways of the COVID-19 Unemployment Crisis
May 15, 2020
By Matt Hughes
Last week, another 3 million Americans filed for unemployment benefits, bringing the total to 36.5 million since the pandemic began.
In the latest #ProgressingAhead Twitter chat, some of the brightest minds in economic policy shared their takeaways and possible solutions for what is already the deepest employment crisis since the Great Depression.
Black, Latinx, and Women Workers Face the Greatest Risk.
While Black and Latinx workers have always experienced higher rates of unemployment and workplace risk than their white counterparts, COVID-19 has supercharged these harmful trends.
“Black and Latinx workers disproportionately comprise #frontlineworkers. Many of these workers have to choose between receiving a paycheck at the risk of exposure, or social distancing by staying home but missing out on that paycheck,” wrote Janelle Jones, Groundwork Collaborative’s managing director of policy and research. “Relatedly, Black and brown workers are typically the first fired and last hired during recessions. We have seen this trend in previous recessions and even in recent data from March.”
Moreover, a third of jobs held by women have been deemed essential, as noted by Julie Kashen, The Century Foundation’s director for women’s economic justice.
Our Social Safety Net Is Essential—But Currently Inadequate for the Scale of This Crisis.
Mass unemployment has further revealed the flaws of our nation’s health insurance and unemployment insurance systems.
As Chirag Mehta—Community Change’s director of governing agenda and ideas generation—wrote, “we need to end, once and for all, our dependence on the employer-based health insurance system. 30+ million job separations has eviscerated the bedrock of our health insurance system.”
“To tackle this we must ensure ALL states expand Medicaid. It is not a coincidence the states that haven’t are in the South & Midwest. Rural residents there are struggling,” added Gbenga Ajilore, a senior economist at the Center for American Progress.
Our unemployment system, meanwhile, received much-needed expansion in the CARES Act, but it remains inaccessible for far too many.
“UI claims have truly been unprecedented, showing how unprepared our country has been to economic shocks like #COVID19. Although widespread disaggregated data is not yet available, it is likely that POC have been hit harder than the numbers suggest,” Jones noted.
Amid reports that some receiving unemployment benefits are making more than they did in their former jobs, Roosevelt Director of Health Equity Andrea Flynn weighed in. “Austerity minded folks will tell us this means ppl are making too much on unemployment. That’s the wrong read. It tells us JOBS NEED TO PAY MORE.”
We Need to Protect Small Businesses and Their Workers.
The loan-based Paycheck Protection Program (PPP), which got a new infusion of funding in Congress’s last relief package, simply isn’t working for most small businesses and workers. Moreover, that support pales in comparison to the trillions of dollars the Fed has promised to spend on corporate bonds. PPP’s failures will have a negative effect on both workers’ lives and the strength of our economy overall.
“I’m worried that after this crisis has passed, you’re going to see big businesses that were able to get this Fed backstop in a pretty strong condition overall, and medium-size and small businesses in rough shape overall,” COVID-19 Congressional Oversight Commission member (and Roosevelt Managing Director of Corporate Power) Bharat Ramamurti told NPR this week.
Large companies have significant advantages over small companies in a crisis, including better access to capital and more cash reserves, as Roosevelt Editorial Manager Matt Hughes noted. And as the pandemic persists, those large firms may be well-positioned to acquire competitors and further gobble up market share.
Policymakers can prevent such monopolization and worker dislocation by protecting small businesses and their employees today. Guaranteeing paychecks and keeping workers on payrolls would mitigate the personal devastation of unemployment, ease the strain on states’ UI systems, and ensure a more efficient rebound when those businesses reopen. Americans cannot afford to wait.