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Weekend reading: The safety net and the coronavirus recession edition

Summary:
This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context. Equitable Growth round-up As the U.S. economy heads into what may be the most severe economic downturn since the Great Depression, there is no better time to look at and learn from the more recent Great Recession of 2007–2009. Though what the nation is facing now is different in that it is being caused by a global pandemic instead of collapsing financial markets, there are some striking

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This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

As the U.S. economy heads into what may be the most severe economic downturn since the Great Depression, there is no better time to look at and learn from the more recent Great Recession of 2007–2009. Though what the nation is facing now is different in that it is being caused by a global pandemic instead of collapsing financial markets, there are some striking similarities in the U.S. safety net’s inability to protect those in need. These issues ought to be addressed now, before the same results wreak havoc again. Alix Gould-Werth walks through how the Unemployment Insurance system is ill-equipped to handle a coronavirus recession, thanks, in part, to changes made to state-level unemployment benefits programs after the Great Recession. She proposes three fixes that will better prepare states to handle the record-breaking number of claims that have been and will continue to be filed, and argues that now is the time for policymakers to make these changes so that our economy and our society are ready to weather this crisis, regardless of how long it lasts, and be ready for the any future crises.

Another vital aspect of the safety net that is worth revisiting amid the coronavirus recession is the paid medical leave system. Jack Smalligan and Chantel Boyens review the recent literature on paid medical leave—which, until the pandemic struck, was paid relatively little attention to since workers tend to have access to it more than other types of paid leave. As the coronavirus pandemic continues and as the resulting economic recession deepens, a better understanding of the research that has been done can help inform how policymakers should respond and what aspects of this safety net must be addressed to ensure the health and well-being of workers and their families across the United States. Smalligan and Boyens discuss three different types of paid medical leave and how they are administered in various states, as well as the clear benefits—medical, social, and economic—that research proves result from states enacting paid medical leave programs.

In research studying the effect of targeted quarantine and widespread testing on death rates and economic output, David Berger and Kyle Herkenhoff show how expansive testing allows governments to target specific populations for quarantine, reducing infections and putting people back to work sooner. Meanwhile, the high U.S. unemployment rate, significant income drops, and unsteady economy are evidence that safety net programs must continue to be funded. Therefore, the authors ask, should the federal government focus its marginal spending on boosting testing capacity for the coronavirus or on shoring up the safety net? It remains to be seen which has a better “bang for the buck”—and Berger and Herkenhoff argue that this question must be answered as U.S. policymakers debate future rounds of stimulus spending.

In addition to social safety net programs—and even before many were enacted—unions in the United States have supported workers to achieve better outcomes for themselves and their families. Conditions from a minimum wage to a 40-hour workweek to expanded access to healthcare are just a few of the benefits unions fought for that are now considered standard worker rights, regardless of union membership status. But union membership has been declining steadily since the 1970s, leaving workers more exposed to poor treatment and outcomes on the job—and causing a decades-long growth in income inequality in the United States. This May Day, Equitable Growth released a factsheet showing how union membership empowers both unionized and nonunionized workers, how there is a growing share of workers who want to join a union, and how strikes remain a powerful tool for workers to achieve better conditions and pay. This last point is made ever clearer in an issue brief by Kate Bahn, Alexander Hertel-Fernandez, and Carmen Sanchez Cumming, which details the recent walkouts, strikes, and labor action against large companies such as Amazon.com Inc. in the face of coronavirus pandemic, as front-line workers say their employers aren’t doing enough to protect them from the coronavirus and the COVID-19 disease it spreads.

April’s Expert Focus is on equity and well-being during the coronavirus recession, highlighting the research of several academics looking at disparities in race and ethnicity, income, and gender, and the effects these gaps will have on our recovery. Christian Edlagan and Maria Monroe review recent work by academics and scholars in Equitable Growth’s network and beyond studying the crisis’s impact on those working on the front lines of the U.S. economy, including how disability programs are affecting financial outcomes for workers, earnings inequalities in the care industry, and the particularly severe impact of the pandemic on black women workers.

Links from around the web

Michigan Gov. Gretchen Whitmer announced plans to offer tuition-free education to emergency workers in a stunning display of what the government can do to help those who are keeping us safe. Zack Budryk reports for The Hill that the GI Bill-esque program will provide higher education to those working in healthcare, childcare, grocery stores, and manufacturing personal protective equipment and supplies. Gov. Whitmer also announced that employers will be able to reduce employee hours so workers will be eligible to receive unemployment benefits, as well as the extra $600 per week that recent federal legislation ensures through the end of July.

Not all front-line workers are so lucky, though. In an op-ed for The New York Times, Dollar General Corp. employee Kenya Slaughter describes her experiences as an essential employee in Louisiana, risking her life every day to keep the store open. It’s an eye-opening look into the daily realities of millions of Americans across the country who are not in a position to telecommute and are keeping the rest of us safe and fed. The lack of safety net protections for many of these workers has forced them to choose to go work over protecting their own health and the health of their families. And unpredictable schedules and a lack of childcare is causing undue stress, as workers must juggle their work and family responsibilities. Slaughter explains why hazard pay and more predictable scheduling are urgently needed and calls on policymakers to enact these protections now so those who are taking care of us can also take care of themselves.

The coronavirus recession appears to now be pummeling industries previously considered safe: the public sector and white-collar professionals. Looking at data on changes in unemployment claims week-over-week between industries, Andrew Van Dam at The Washington Post shows how each week of the pandemic thus far has affected different sectors of the economy differently. These trends of how the coronavirus recession affects specific industries from one week to the next can help map out where the U.S. labor market will be hardest hit in the future—and how quickly the U.S. economy can recover.

Friday figure
Weekend reading: The safety net and the coronavirus recession edition

Figure is from Equitable Growth’s “Fool Me Once: Investing in Unemployment Insurance systems to avoid the mistakes of the Great Recession during COVID-19” by Alix Gould-Werth.

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