This week, as the Coronavirus pandemic spread in the US and stock market volatility sparked flashing red alarms for the national economy, the Trump administration floated several proposals for stimulating the markets and staving off a recession. The problem is that none of the proposals thus far adequately address the needs of the most vulnerable group amid this pandemic – low-income workers.
Right now, 6 in 10 workers in this country are living paycheck-to-paycheck. A majority of those workers don’t have even $400 in emergency savings. When a pandemic like this new COVID-19 disease arises, the most effective way to contain the outbreak is to make people stay home to sharply limit the virus’s ability to spread.
Instead, the Trump administration is touting ideas like a payroll tax cut. This is a poorly-targeted proposal that will merely further enrich people who will, in all likelihood, remain financially comfortable even through the crisis while ignoring vast swathes of low-income workers. A 2 percent payroll tax cut, for instance, would likely net an individual about $2,700 – that is, if that individual was earning the taxable maximum salary of $137,300. For a single parent making $25,000 a year, that same tax cut would net them just $500, spread out over an entire year of paychecks. Hourly workers, meanwhile, would get nothing for the hours they lose.
Rather than a payroll tax cut, which bipartisan voices in Congress have already denounced, the administration should be prioritizing desperately-needed financial stability for the bottom half of the country. Luckily, House Democrats have introduced a Coronavirus stimulus bill that would do just that.
The House stimulus bill includes paid sick leave for workers, free testing for the virus, extended unemployment insurance, expanded food assistance programs, more funding for uninsured patients under Medicaid, and increased protections for healthcare workers fighting the outbreak on the front lines.
Some House Republicans have denounced the bill as a “radical left agenda,” but it is far from that. Even aside from the obvious moral reasons to aid millions of workers alone, these are absolutely critical measures to both contain the outbreak and get the economy back up and moving. Without these kinds of basic protections, we are essentially forcing half the country to choose between their financial stability and public health. As stories start to emerge of desperate workers still punching in despite their health fears, this phenomenon could rapidly become the norm – and it’s hard to overstate how dangerous that is.
If we truly want to kickstart the economy and avoid a complete recession, then investors need to have a healthy country to invest in. We need healthy workers, healthy consumers, and we need Americans to know that even when an outbreak happens, we have sufficient public health measures in place to be able to contain it. We need assurances that our economy won’t go into a tailspin, harming even those among us who will never get sick. Right now, we do not have that basic assurance, and so our economy will continue to fluctuate dangerously until we do.
