For years, financial inequality has widened in the United States and elsewhere as wealth and income have become increasingly concentrated among the most affluent 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.
The sick who still go to work because they have no paid leave. Families who face ruin from even a temporary layoff. Front-line workers are risking COVID-19 infection.
Alone among advanced economies, the United States doesn’t require employers to grant sick leave and paid time off. America’s system for providing unemployment aid, a patchwork of state programs, isn’t as generous or efficient as European government programs that subsidize 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 concluded that the U.S. national minimum wage paid 33 cents for every $1 earned by workers in the middle of the earnings spectrum. That contrasted with 46 cents in Germany, 54 cents in the United Kingdom and 62 cents in France.
African-Americans account for 42% of the nearly 3,300 COVID-19 deaths 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 COVID-19: Diabetes, obesity, asthma.
The financial pain, too, has landed hardest on the neediest as the economy locks down to fight 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% of the losses. And those workers earn an average of just $16.83 an hour, 41% less than the average American.
“Maybe there will be a cultural shift,” said Elise Gould, senior economist at the progressive Economic Policy Institute. “I see it as a great opening to try to (provide) those labor 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 benefits and sick leave and supplementing state unemployment aid would make it easier to extend such programs even after a recession has ended. Doing so could have the longer-term effect of reducing financial inequalities. Gould 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.
Congress’ rescue plans require companies with fewer than 500 workers to offer paid sick leave, although employers with fewer than 50 can seek an exemption. The government is sending $1,200 checks to Americans who earn up to $75,000 and smaller checks to many who earn more. The rescue plan extended unemployment benefits for the first time to part-time and gig workers such as Uber drivers. And it added $600 a week to existing state unemployment payments. But states have been swamped by claims for jobless benefits — nearly 17 million over the past three weeks — and are struggling to deliver the new federal aid.
Alexandra Cawthorne Gaines of the 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.
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