Workers at high risk of unemployment in the COVID-19 pandemic
By Daniel Flaming and Patrick Burns
In just one month, the coronavirus disease (COVID-19) has spread from infecting a few, distant countries to become a global pandemic, bringing large parts of California’s economy to a standstill. Public health directives for consumers to stay at home and nonessential businesses to close for an indeterminate amount of time are causing a profoundly disruptive economic shock. We are seeing the economic fabric of workers earning wages from employers and employers receiving revenue from customers disintegrate as workers lose jobs and are unable to pay for basic needs such as housing, and employers lose customers and are unable to pay basic operating costs for preserving their businesses.
Meeting the basic needs of unemployed workers throughout this economic downturn is essential for preserving our social fabric and civic institutions. California needs to take direct action to address the economic emergency caused by COVID-19 that is causing widespread business closures and extremely high unemployment. Forty-three percent of California workers have a high risk of unemployment.
The burden of unemployment is unequally distributed. It rests most heavily on young adults, Latinos, and workers in restaurant, hotel, personal care, and janitorial jobs. Young adults graduating from school and attempting to enter the job market face extremely difficult challenges.
A consequence of social distancing and business closures to protect public health during the pandemic is to transform the health risks of older individuals, who are most vulnerable to COVID-19, into economic risks for low wage workers, who often are younger individuals and service workers who perform tangible rather than conceptual tasks, and who have the highest risk of unemployment. The assumption underlying this transfer of risk is that we all have an obligation to protect each other’s life. The reciprocal obligation is to protect each other’s economic well-being, specifically, employment and wages for workers whose jobs have been sacrificed to protect the lives of others.
Many workers who still have jobs are risking their health. Health care workers have uniquely high risks of being infected with COVID-19 because they have very frequent direct physical contact with infected individuals. The risk of being infected by the coronavirus as a result of working in close proximity to other people is greatest among physicians, nurses, and medical technicians. There also are elevated risks of infection for low income workers, African Americans, Latinos, young adults, health care support workers such as home health aides, personal care workers such as child care workers, and protective service workers such as police officers and firefighters.
Many households already have unpaid rent, bills and loan obligations. Half of California’s workers earn $40,000 or less a year. These workers are likely to have little or no financial reserves and many are encumbered with debt. Workers in this group who are unemployed, or become unemployed, need immediate wage replacement.
Similar financial safety nets need to be extended to small and medium size businesses in order to preserve California’s employment base. California has over 940,000 employment establishments, and over 800,000 of these establishments have less than 20 employees. This is an extraordinarily large and diverse employment community to locate, engage, and provide with timely, effective financial support.
As workers lose their jobs, businesses close and family incomes vanish, California needs to rapidly provide assistance and economic relief to workers, their families and their employers. The following ten policies and actions are recommended for the State of California, counties and cities:
- Maintain and increase staffing for programs that provide financial support to ensure that eligibility determination, enrollment and provision of funds or benefits to applicants occurs very rapidly. This includes Unemployment Insurance and CARES Act payments, Pandemic Unemployment Assistance, public assistance benefits, disability insurance, and Paid Family Leave.
- Suspend consumer debt collection and impose a long-term moratorium on evictions, foreclosures and utility shut-offs.
- Provide philanthropic and public support for food banks to maintain food inventories and staffing that is commensurate with the number of people seeking help.
- Use state and local economic development and workforce development programs adaptively, responsively, innovatively to provide access to capital for businesses.
- Implement work sharing programs to retain workers on employers’ payrolls and their eligibility for employee benefit programs, including health insurance.
- Ensure that health care is available for all California residents.
- Rethink local land use policies that have prioritized industries that produce sales tax revenue and led to a service-intensive industry structure in the Los Angeles region that is proving very vulnerable to a sudden downturn in consumer demand for personal services, food services and travel, as well as land use policies that do not account for the negative public balance sheet resulting from low-wage industries, for example the large-scale development of warehouses in the Inland Empire.
- Ensure that front-line workers in hospitals, medical clinics, public safety organizations, and grocery stores have all needed protective equipment.
- Ensure that front-line workers in hospitals, medical clinics and public safety organizations have the right to speak out about dangerous job conditions.
- Provide hazard pay for health care workers and others who have frequent direct physical contact with COVID-19 patients.