This post focuses on the federal government’s employment reports and the problems of the underlying data. They highlight “unemployment,” which is only a small part of the problem of inaccessibility to adequate jobs. They fail to describe the poor conditions of many jobs, which have been worsened during the COVID-19 pandemic (working in unsafe job situations) and the resulting overall economic decline. This post also refers to how more and more workers cannot or have increasing difficulty in acquiring enough food, housing, and healthcare. Trump’s policies have compounded the employment and economic plight of many millions of Americans. His promise to bring back good manufacturing jobs to the country have failed. There is also in this post references to a number of proposals on how the “employment” problem can be “solved,” but only if voters defeat Trump and the Republicans in November and if conditions then compel Democrats to adopt a more radical agenda than they have.
The Latest employment data from the Bureau of Labor Statistics seemed very positive
The Bureau of Labor Statistics (BLS) provides monthly reports on the US labor force situation and is the most authoritative source of such information. The most recent report, released on June 5, 2020, is for “May ( https://bls.gov/news.release/empsit.nr0.htm). The labor force includes the employed and unemployed. Those 16 and above who do not fall into these categories are considered outside the labor force, even though they may want a job now. The employed, unemployed, and non-labor-force participants make up the “civilian non-institutional population” (https://thebalance.com/labor-force-participation-rate-formula-and-examples-3305805).
Contrary to the expectations of many economists and journalists who anticipated a further decrease in overall employment and another increase in unemployment, “total nonfarm payroll employment rose by 2.5 million in May (from mid-April to mid-May), and the unemployment rate declined to 13.3 percent from the previous month’s rate of 14.7 percent. Trump and his administration were ecstatic about the news and a pro-Trump political ads began appearing on commercial television channels lauding how the president’s policies are responsible for the turnaround and how the economy is about to move back to the high employment and low unemployment levels of February, before the Covid-19 outbreak, when the unemployment rate was 3.5 percent and the number of unemployed was at 5.8 million. Trump takes these numbers very seriously and believes his reelection next November depends on how well the economy is or is not doing.
Not so good after all
Wait! There is a hitch in the BLS numbers. The May employment number from the BLS includes a mistake by the agency in mis-classifying some workers as employed when they were not employed. Here is how the BLS states the problem: “If the workers who were recorded as employed but absent from work due to “other reasons” (over and above the number absent for other reasons in a typical May) had been classified as unemployed on temporary layoff, the overall unemployment rate would have been about 3 percentage points higher than reported (on a seasonally adjusted basis).”
Now if these 3 percentage points are added to the reported 13.3 unemployment rate, the unemployment rate jumps to 16.3 percent. In a labor force of 158.23 people, the number of unemployed at 13.3 percent is about 21 million, while at 16.3 percent it is 25.8 million, a difference of almost 5 million. This nullifies the reported rise of 2.5 million jobs. Still, both numbers are high. Either at 13.3 percent or 16.3 percent, the unemployment rate is higher now than it was during the Great Recession in 2007-2009, which topped off at 9.2 percent in December 2009.
A closer look at the data and some implications
It is useful to consider the data more closely in order to get a better understanding of the true employment situation. I have addressed the issue of the availability and the conditions of employment before in a blog on June 6, 2018 (see “What kind of jobs?).
In the BLS system, employment is narrowly identified as follows. “In the household survey, individuals are classified as employed, unemployed, or not in the labor force based on their answers to a series of questions about their activities during the survey reference week (May 10th through May 16th).” To be classified as employed, a person needs to have been employed over the previous four weeks for as little as one hour in a paid job or working for a family business if unpaid or temporarily absent from work for certain specified reasons (e.g., vacation). Kimberly Amadeo further clarifies what it means to be employed.
“For employment statistics, the BLS includes anyone 16 or older who worked any hours during the past week. They can be paid employees or self-employed. They can be unpaid workers in a family-owned business as long as they worked at least 15 hours a week. The BLS also includes people who didn’t work during the week if they were temporarily absent due to vacation, illness, or other reasons” (https://www.thebalance.com/what-is-unemployment-3306222).
To be classified as unemployed, a person had to be “actively” looking for work during the four weeks prior to the survey and to be currently available for work, including those who are on temporary layoff and expect to be called back to that job. If a person does not have a job and has not recently looked for job, then she/he is, by BLS definitions, outside the labor force. In May 2020, there were 101,820,000 persons classified as non-participants in the labor force. Amadeo provides some insight for why so many people 16 years of age and older are not considered to be in the labor force. Note that this does not mean they do not want or need a paid job.
“People who would like to work but haven’t actively looked for it in the last month are not counted as being in the labor force no matter how much they want a job. But they are counted in the population. [the civilian, non-institutional population]
“The BLS does keep track of them. It calls some of them ‘marginally attached to the labor force.’ These are people who have looked in the past year but just not in the previous month. They might have had school or family responsibilities, ill health, or transportation problems that prevented them from looking recently.
“The BLS calls some of the marginally attached, ‘discouraged workers.’ These people have reported that they’ve given up looking for work because they don’t believe there are any jobs for them. Others have become discouraged because they lack the right schooling or training. They worry that the potential employer thinks they are too young or too old. Some have suffered discrimination. They are counted in the real unemployment rate.”
The key point is that there are some millions of people outside of the labor force who are potentially available for and desirous of paid employment. They may be deterred because of their previous job searches failed, because of their advanced age, because they are ill, because they are a full-time students, because they have young children or sick parents to care for and they can’t afford to buy such care, because they have a drug addiction, because of a lack of transportation, or because the wages of available jobs are insufficient to pay for necessities. In addition, those who are in the military, federal jobs, incarcerated, in mental health institutions, nursing homes, or other institutions are not included in the BLS calculations.
The number of low-wage workers
Martha Ross and Nicole Bateman have carried out extensive research on low-wage workers. Prior to the COVID-19 outbreak, they identified 53 million people in 373 metropolitan areas as low-wage workers, that is workers with less than a median hourly wage of $10.22 or, for those who work full-time, year-round, a median annual earnings of about $24,000. Depending on the region, “between 30% and 62% of all workers earn low wages, with median hourly wages ranging from $8.40 to $12.65.” They break their data down by region (https://brookings.edu/blog/the-avenue/2020/03/19/covid-19-puts-america-low-wage-workforce-in-an-even-worse-position).
The largest metropolitan areas have the highest absolute numbers of low-wage workers. They refer to the Los Angeles region, where 53% of the workforce are in the low-wage category, including 500,000 retail workers, cooks, and food servers. Smaller regions have smaller numbers, “but those numbers are still substantial within the context of the local economy. For example: “Among regions with populations between 500,000 and 1 million, for example, low-wage workers make up between 35% and 56% of the total workforce. In Albuquerque, N.M., that translates into 155,000 people, including 13,000 retail workers and 17,000 cooks and food servers. In Akron, Ohio—a region with a more industrial economic base and a whiter, older population—there are 111,000 low-wage workers, including 10,000 in retail and 13,000 cooks and food servers.” The in “midsized metro areas with populations between 250,000 and 500,000, low-wage workers make up 37% to 58% of all workers. They refer to two examples. “In Norwich, Conn., 37% of workers (41,000 total people) earn low hourly wages, and nearly 10,000 of them are in retail or food service jobs. On the other side of the country in Eugene, Ore., there are 67,000 low-wage workers, including 7,000 food service workers and 6,000 retail workers.” The pandemic has increased the low-wage worker population, seriously impacting everywhere restaurants, cruise lines, and hotels.
Not only low-wage workers
An example: State and local government unemployment keeps climbing
Adam Mazmanian reports that state and local government unemployment has been rising during the Covid-19 inflicted economic crisis (https://gcn.com/articles/2020/06/08/state-and-local-unemployment.aspx). Citing BLS data, he writes that the state and local government sectors of the economy shed 571,000 jobs in May, with over 300,000 cutbacks in education and about 200,000 in other public-sector jobs. This is on top of the “approximately 1 million public sector jobs shed in April. There can be no economic recovery without a strong government sector.
Economic Policy Institute Josh Bivens and David Cooper puts the issue report on their research that, if policymakers in Washington do nothing at the federal level to address the shrinking of the state and local government workforce, there will be 5.2 million fewer of these workers by the end of 2021 (https://www.epi.org/blog/without-federal-aid-to-state-and-local-governments-5-3-million-workers-will-likely-lose-their-jobs-by-the-end-of-2021). Here I’ll quote their article at length.
“Because a weakening economy undercuts state and local tax revenues, and because states operate under balanced budget constraints, the coming months will see intense downward pressure on state and local spending. Reductions in this spending will in turn significantly slow recovery from the current economic crisis. This is not an abstract concern—the historically slow recovery in state and local spending following the Great Recession by itself delayed a recovery in unemployment to pre-crisis levels by four full years.
“Recent estimates indicate that state and local governments will face a shortfall approaching $1 trillion between now and the end of 2021. The methodology behind this estimate is straightforward: High-quality research shows that each one percentage point rise in the unemployment rate leads to a budget shortfall for state governments of $45 billion. Given that local government revenues are nearly two-thirds as large as state revenues, a conservative adjustment would imply that each percentage point increase in the unemployment rate increases state and local budgets shortfalls by $70 billion. With these estimates in hand, researchers have compared the forecasted path of unemployment rates over the next seven quarters and multiplied the excess of forecasted unemployment over the first quarter unemployment rate (3.8%) by this $70 billion.
“If this $1 trillion shortfall is not filled in by the end of 2021, then state and local government spending would be roughly $430 billion lower at the end of 2020, and $570 billion lower at the end of 2021. Each dollar in state and local spending cuts triggers a multiplier effect as governments end contracts with local businesses and public-sector employees see income drops and, in turn, pull back on their consumption spending. After accounting for these ripple effects, the shortfall in public spending will lead to losses in overall gross domestic product (GDP) of just under $800 billion by the end of 2021. This $800 billion represents about 3.7% of forecasted GDP by the end of 2021.”
Trump and the Senate Republicans have so far been unwilling to support financial relief to state and local governments. If they don’t and if the estimates of the financial deficits are correct, the massive layoffs of government workers will have a devastating effect on vital city services, from sanitation, to education, libraries, public transportation, social services, police, and more.
The conditions of work
The BLS data do not consider the conditions of work. There are millions of people who are employed but, as already pointed out, in jobs that do not provide a minimally adequate wage or security. And millions of workers are employed in working conditions that are hazardous, in jobs without overtime pay, or medical benefits, or medical benefits that are affordable, without paid leave for sickness or the birth and caring for newborns, and with no or few paid vacation days. African Americans, Latinos, Native Americans, undocumented workers, women are more affected by these conditions than others. Given employment trends, the overall jobs’ situation, pre-coronavirus, now and in the future, are not rosy, as Trump and his allies keep proclaiming.
As state officials open their economies, many work places are not safe from Covid-19 spread
Tony Romm and Jacob Bogage take up this point, writing: “As millions of Americans return to work amid the worst economic crisis in a generation, they’re unexpectedly discovering their old positions are far more burdensome than they used to be. Their hours have been cut, their pay has been slashed and their responsibilities are now magnitudes greater. And their job security — despite President Trump’s recent proclamations about an economy on the mend — remains anything but guaranteed.” Even those who remained employed through the first phases of the pandemic, many are anxious about their future job security and health safety (https://washingtonpost.com/business/2020/06/06/workers-pay-cuts-coronavirus).
The authors quote Robert Scott, a senior economist at the Economic Policy Institute: “People are coming back to work in jobs that are very different than they were three months ago. They’re very risky and there’s a lot of uncertainty about what’s to come. There’s a rocky road ahead, and a lot of work on the economy left to be done.” Nick Bunker, the economic research director for the job-listing site Indeed, says “there was a higher-than-expected spike in part-time employment, one of a few indicators that “suggests there has not been a full return to work” for some people.” Further, according to Bunker, “the highest rate of job growth has occurred within the lowest-wage industries, including some food and beverage stores, raising questions about the extent to which some Americans may be falling behind financially.” Romm and Bogage refer to a “report prepared by the Federal Reserve System, called the Beige Book, [which] found in its May release that sharp reductions to hours and wages have troubled employees nationwide.”
They include many specific examples of changed workplaces and point out that the “effects of the economic downturn are far more widespread, leaving virtually no industry untouched in the broader U.S. economy.” For example: “Restaurant servers, bartenders and other workers who rely on a steady stream of customers — and often the tips they leave — have been disproportionately affected by a pandemic that is spread by social proximity. So too has the coronavirus decimated the retail sector, as online purchases cut into some major brands’ in-store revenue. Some major employers, including J.Crew and J.C. Penney, have fallen into bankruptcy, and others have slashed their workforce, cut the hours of those they keep on staff or changed their job responsibilities entirely. Even hospitals “have placed doctors and support staff on irregular shifts, seeking to save money at a moment of sky-high expenses, threatening some in the medical industry with gaps in their pay. [And] Gig-economy companies including Uber that once offered the promise of a little extra monthly income no longer seem particularly alluring to some Americans, threatening to expose drivers and other workers to strangers who may be sick. Some Uber drivers still on the ride-hailing app say the demand has declined dramatically.”
They allude to the conditions at the Fontainebleau Hotel in Miami, where before the pandemic “roughly 70 people previously helped clean the tower where Iracema Arrieta has served as a housekeeper.” Now, “fewer than half of them have returned to the job since the coronavirus struck, she said, even though Arrieta and her peers must now do systematic, deeper cleanings of rooms to prevent the spread of the disease. The work is harder, and the cleaning solution sometimes makes it difficult to breathe, she said. Plus, the tips are much less than they used to be, leaving Arrieta to conclude that the state rushed to reopen.”
The Failure of OSHA to protect workers on the job
The Occupational Safety and Health Administration was created by Congress in 1970 by legislation titled the “Occupational Safety and Health Act of 1970.” Its mission, according to the OSHA website, is “to ensure safe and healthful working conditions for working men and women by setting and enforcing standards and by providing training outreach, education and assistance”(https://osha.gov/aboutosha). The act applies to “most private sector employers and their workers, in addition to some public sector employers and workers in the 50 states and certain territories and jurisdictions under federal authority.” OSHA is a part of the US Department of Labor. According to the online encyclopedia Wikipedia, “The agency is also charged with enforcing a variety of whistleblower statutes and regulations” (https://en/wikipedia.org/wiki/Occupational_Safety_and_Health_Administration).
While OSHA has had some positive effects over the years; for example, in reducing workplace injuries, it has also been criticized for having too few inspectors, for inspecting too few workplaces annually, for its unwillingness to impose serious penalties on employers who violate the law. This pattern of weak enforcement is also revealed, according to Emily Schwing, in “how OSHA has failed to protect America’s workers from COVID-19” (https://revealnews.org/article/how-osha-has-failed-to-protect-americas-workers-from-covid-19).
The thrust of her article is captured in her opening sentence: “As front-line workers, from emergency room staff to grocery store clerks, face an elevated risk of contracting COVID-19, they have little in the way of regulatory protections to fall back on. Democrats’ efforts to move worker protections through Congress have so far been stymied, and a regulatory process launched by the Occupational Safety and Health Administration to mandate protections from infectious disease exposure was back-burned by the Trump administration. Currently, there are no OSHA standards to deal with COVID-19. The three federal government coronavirus bills that have been passed, “including the $2.2 trillion stimulus bill known as the Coronavirus Aid, Relief and Economic Security Act – or the CARES Act – also failed to include any mandated worker protections.” House Democrats introduced relevant provisions, but they were “removed during negotiations with Treasury Secretary Steven Mnuchin and Senate Republicans as the measure headed into the Senate.
Schwing reports the opposition to such a standard, an infectious disease standard, was “largely due to lobbying efforts by the American Hospital Association, which spent more than $26 million on lobbying in 2019.” She continues: “The trade group fought similar regulation efforts under the Obama administration, congressional staffers and workers’ rights advocates recall. In comments on the provision to House Speaker Nancy Pelosi as well as in a March 12 action alert issued to the association’s member hospitals, the group argued that enforcement would be too costly for hospitals and that complying with a new standard amid a severe respirator shortage might limit hospitals’ ability to adequately provide care to sick patients.”
In the meantime, OSHA has done nothing to ensure that CDC coronavirus safety guidelines are being implemented in workplaces. According to one of Schwing’s sources, Angelo Cucuzza, a former American airlines employee who is now a senior staffer at the Transport Workers Union, the “regulatory failure has put subway, airline and even bikeshare workers” at risk. Cucuzza’s views come from first-hand experience. He told Schwing that Bottom of Form”he spent much of the last week [the first week of April] in New York City, Jersey City and Philadelphia distributing surgical masks to union members who work for airlines and railroads.” And: “We are trying desperately to procure wipes, gloves and hand sanitizer by next week,” he said.
He said roughly 95% of workers the union represents are deemed essential, and said: “We have to start paying attention to the amount of front-line transit workers getting sick, arguing that as the coronavirus continues to spread, government officials either need to mandate new worker protections or start shutting down transportation systems.” Most employers will not act voluntarily to protect workers.
Without a mandate, Cucuzza said, it’s unlikely most employers will voluntarily act to protect workers. This week, Washington state’s Department of Transportation announced that a ferry ticket seller had died of complications from COVID-19. Washington does not require all ferry workers to wear gloves, and the Department of Transportation doesn’t require any of its employees to wear masks. And OSHA is ineffective. According to one OSHA area office director, “As an organization, all OSHA can do is contact an employer and send an advisory letter outlining the recommended protective measures.” Debbie Berkowitz, “a former OSHA official who is now the worker health and safety program director for the National Employment Law Project,” summed up the situation: “There is no mandate to protect workers anywhere. There could have been a standard. No one realizes how weak worker safety protections really are.”
The Trump administration wants “essential” workers to go to work regardless of unsafe conditions
Kathy Wilkes reports on this aspect of workplace unsafety (https://popularresistance.org/the-right-to-refuse-unsafe-work-is-more-important-than-ever). She writes: “Some states at the direction of the Labor Department threaten termination of unemployment benefits for workers fearing return to dangerous jobs. A disturbing June 5 New York Times’ report reveals how far those machinations have gone. The result: workers who refuse to return to unsafe workplaces (e.g., meat processing plants) will be either fired without pay or benefits or trapped in a job where the chances of contacting the COVID-19 virus is high. Thus, the choice is between falling into poverty or being exposed to and possibly contacting the disease – and dying.
This is happening despite an OSHA regulation promulgated by the agency in 1980. Wilkes includes the following excerpt from the regulation.
Your right to refuse to do a task is protected if all of the following conditions are met:
Where possible, you have asked the employer to eliminate the danger, and the employer failed to do so; and
You refused to work in “good faith.” This means that you must genuinely believe that an imminent danger exists; and
A reasonable person would agree that there is a real danger of death or serious injury; and
There isn’t enough time, due to the urgency of the hazard, to get it corrected through regular enforcement channels, such as requesting an OSHA inspection
As noted, OSHA does little to enforce this rule. Wilkes refers to what a number of authorities have had to say on this point. (1) “‘That’s one of the reasons why we’re seeing catastrophic results in meatpacking plants, at Amazon warehouses, in transit systems, in other workplaces,’ former deputy Labor Department secretary Seth Harris said on MSNBC Live. ‘The cop is not on the beat.’”OSHA’s updated policy expands field staff’s “discretion” in some cases.” (2) “Not good enough, says the AFL-CIO, which is suing to compel immediate intervention in the face of “grave danger.”(3) “Ironically, these harsh realities reinforce workers’ ‘right to refuse.’ In a blistering April 7 article for Politico, former OSHA administrator David Michaels said the agency ‘is suffering from malign neglect’ under Trump, sparking worker job actions and strikes ‘to force their employers into providing even basic protections.’”
However, in the context of weak labor law or weakly enforced labor law, workers are increasingly put in a situation where they get little assistance from the Trump-dominated National Labor Relations Board (NLRB)or from state workers’ compensation laws. This means that, if they decide not to enter an unsafe workplace, they lose their wages and benefits (e.g., any health coverage they may have). If they do enter such workplaces and get infected with the COVID-19 virus, they are unlikely – or it will take months – to get any benefit from the state worker compensation boards.
All is not lost. Wilkes elaborates on these points and notes that even Trump’s NLRB agrees that “‘participating in a concerted refusal to work in unsafe conditions’ is protected.” The National Employment Law Project takes the position that “workers whose employers don’t offer safe job assignments should be eligible for unemployment insurance.” She adds: “Contracting COVID-19 on the job may be covered by state workers’ compensation laws that generally require employer-provided insurance for disability pay and health care and also prohibit retaliation for pursuing or getting these benefits.” But, as already noted, these backup legal supports are often subverted and workers will often need legal assistance. “As with almost every worker right, there are exclusions, caveats and case law that impact their interpretation and application. Advice: Get the facts, recruit co-workers if possible, expect a fight,” because you can expect that employers can “refuse to mitigate dangers, challenge claims or fire workers taking a stand, precipitating more battles over reinstatement and compensation.
Long-term care facilities are pandemic hotspots
Steven Reinberg reports on this deeply disturbing COVID-19 problem (https://webmed.com/lung/news/20200605/nursing-homes-a-hotspot-for-covid-19-deaths). She gives examples of this grim problem from “a new study” that appeared in the Journal of the American Geriatrics Society (June 5, 2020). “By the end of May, the proportion of COVID-19 deaths in Massachusetts from nursing homes and group homes jumped from 54% to 63%, researchers report.” “In other states, the proportion of deaths occurring in long-term care facilities is even higher. In Minnesota and Rhode Island, the figure rose to 81%. Meanwhile, proportions jumped to 71% in Connecticut and to 70% in New Hampshire. Among another 22 states studied, 50% of the COVID-19 deaths occurred in long-term care facilities.”
But the problem goes beyond just a few states. There are some states that do not report COVID-19 deaths in long-term facilities. There is still the lack of testing for the virus in many, if not most, facilities. And there is the continuing issue of “asymptomatic spread of this virus,” stemming from the fact the essential staff in such facilities “go from nursing home to nursing home, like X-ray technicians, phlebotomists, nurses and nursing assistants who have to work more than one jobs to make ends meet.” At a minimum, there is a need for regular testing. But the long-term care industry, largely run by for-profit companies, is in need of major changes that involve better compensation of core staff and more comprehensive efforts to make the facilities safe, the unionization of non-supervisory workers, and much better government regulation and enforcement.
Cannot acquire necessities
Access to food becomes a more serious problem amidst the pandemic
In one of his weekly columns for The New York Times, economic Paul Krugman addresses this aspect of the economic deprivation afflicting so many Americans with the title “An Epidemic of Hardship and Hunger” (https://nytimes.com/2020/05/07/opinion/coronavirus-republicans-jobs.html). His main argument is that Republicans in Washington are the principal cause of why the US Congress not only doing little to assist the food needs of millions of Americans but actively obstructing any attempts by Congressional Democrats to do so. They don’t want to extend “enhanced unemployment benefits,” and, Krugman writes, they “apparently want to return to a situation in which most unemployed workers get no benefits at all.” Among the many other difficulties, the problem of food security has increased during the pandemic. He refers to one recent survey that found 41 percent of families with children under twelve “are already unable to afford enough to eat.” This is reflected in overwhelmed Food banks, “with lines sometimes a mile long.”
While all this is unfolding, “Republicans are still trying to make food stamps harder to get, and fiercely oppose proposals to temporarily make food aid more generous.” Republicans often justify their opposition to increasing such aid by referring to the growing national debt or to how government aid undermines the willingness of people to seek employment. Krugman notes the hypocrisy of such rationalization. They “didn’t complain when the huge tax cut in 2017 added billions of dollars to the national debt. And there is no evidence that “food stamps and unemployment benefits reduce the incentive to seek work,” as Republicans often claim to justify cutbacks in the social safety net.
Krugman draws the following all too obvious implication. “But we’re only now starting to get a sense of the Republican Party’s cruelty toward the economic victims of the coronavirus. In the face of what amounts to a vast natural disaster, you might have expected conservatives to break, at least temporarily, with their traditional opposition to helping fellow citizens in need. But no; they’re as determined as ever to punish the poor and unlucky.” Rather, they want to “go back to business as usual and accept the resulting death toll,” and they don’t want to see the wrong precedents, that is, fearing that if the “help those in distress, even temporarily, many Americans might decide that a stronger safety need is a good thing in general
The coronavirus pandemic is making the already existing US housing crisis even worse
This is the title of Isabel Solange Munoz’s article, published in The Conversation. She is an assistant professor of geography at the University of Tennessee
https://theconversation.com/the-coronavirus-pandemic-is-making-the-us-housing-crisis-even-worse-136025). With rising unemployment and so many low-wage jobs, and in the context of the pandemic and stay-at-home orders, millions of Americans “must scramble to figure out how to pay for that home.” She refers to a wide range of evidence.
“According to CNN, one-third of Americans did not pay rent this month.” “Many are now getting eviction notices, while others are organizing payment plans with their landlords. Even those tenants who successfully negotiate postponing their payments will eventually have to pay back what they owe.” “The stimulus bill recently passed by the U.S. Senate, as well as additional state and city moratoria on evictions and foreclosures, provide some temporary protections.” Munoz points out that the legislation “only really offer partial and temporary solutions, and others, like undocumented immigrants, many who have lived and worked in the U.S. for years are ineligible to receive aid.” Her most important reason is that actions by government “do not address the structural problems surrounding America’s decades-long housing crisis.”
The housing crisis has been exacerbated by rising housing and rent prices. “Housing prices have skyrocketed in many cities in the country.” At the same time, rent prices “have also continued to rise, increasing 150% since 2010.” One consequence is that even middle-class families have difficulty in finding affordable places to rent or purchase. Another is that nationally, “1 in 4 Americans now spend more than half of their monthly income on rent,” while “[a]nother 6 million are considered cost-burdened, meaning that they pay over 30% of their income on rent.” Yet another is that there has been “an increase in homelessness. Currently there are over 550,000 homeless estimated nationwide,” a number that is most likely to continue rising along with the climbing employment problems.
Munoz has also studied “low-income families “living in neighborhoods undergoing gentrification” in Denver, Colorado, where “the pandemic is just another blow to an ongoing struggle to stay in their neighborhood and homes.” Her focus has been on the communities she calls Globeville and Elyria-Swansea, which are “home to approximately 12,000 residents, and almost 87% identify as Hispanic or Latino. The majority of residents earn less than $25,000 a year, with many working in the service and health industries and in construction.”
Denver’s fast-growing housing market and urban redevelopment are making it increasingly hard for these residents to remain in their neighborhood. Many have already been forcibly displaced. One of Munoz’s chief findings: “Without employment and unable to pay rent or mortgage payments, an already cost-burdened community may finally succumb to their struggle against gentrification.” When they are displaced, it “usually means being forced to move to areas and homes that are often unhealthier, poorer quality and far away from city resources and community networks and support.” She continues: “Children are often forced to go to other schools, and parents must commute longer distances to jobs and services.” All these disruptions contribute “to greater inequality, greater social and economic insecurity and can undermine social cohesion, to name only a few.”
Even if they have received temporary relief under some of the temporary federal programs instituted in April and May by the federal government, “it is hard to imagine how families that already pay between 30% and 50% of their salary on rent will be able to pay off any debts when relief programs expire.” She fears that “many of these Americans will end up on the streets, in motel rooms or isolated in neighborhoods with poor-quality housing, far away from community, schools, jobs and other services and resources.”
The lack of healthcare coverage, made worse by the pandemic
Julia Conley, staff writer for Common Dreams, reports on a new report by the Robert Wood Johnson Foundation (RWJF) and the Urban Institute (https://www.commondreams.org/news/2020/05/10/next-crisis-43-million-americans-could-lose-health-insurance-due-to-pandemic). The analysts “project that 43 million Americans could lose their insurance when the unemployment rate hits 20%. When they study was completed in mid-May, the BLS reported an unemployment rate of 13.3 percent through mid-May, though some “economists estimate between 19% and 23.6% of Americans would actually be out of a job by the end of May.
According to Conley, “the Economic Policy Institute estimated that 12.7 million people had already lost their employer-based health insurance.” They joined the “more than 27 million Americans who were uninsured before the pandemic.” Conley additionally reports: “Of the Americans who lose insurance due to layoffs or furloughs, RWJF and the Urban Institute, an estimated seven million will remain uninsured—unable to access healthcare through Medicaid or COBRA, the law which allows Americans to pay for the health insurance they had through their previous employer—which can cost hundreds of dollars per month for individual coverage.”
Even before the pandemic, low-workers and many with higher wages, did not have a job-connected health-care benefit. And, with the unfolding and deepening economic recession, the number of uninsured Americans will go up and, in the absence of healthcare, their risks of contacting and spreading the virus will also rise.
In response, Democrats in the US House of Representatives advanced an emergency expansion of Medicare and Medicaid in late March. Jessica Corbett reports that “over 30 House Democrats came together to introduce legislation that would guarantee healthcare coverage to all Americans during the coronavirus pandemic,” estimating that “35 million people could end up uninsured due to the public health crisis.” The title of the bill is “the Medicare Crisis Program Act.” Bernie Sanders had unveiled a similar bill in the Senate (https://www.commondreams.org/news/2020/05/01/millions-stripped-health-coverage-amid-covid-19-house-dems-unveil-bill-emergency).
The House bill would “‘dramatically expand’ Medicare and Medicaid eligibility, cap out-of-pocket costs for Medicare enrollees, and require all public and private health insurers to fully cover care related to Covid-19—including for patients who display symptoms but test negative for the disease. Further, the legislation would bar healthcare providers from billing uninsured patients for Covid-19 care.”
Corbett quotes Rep. Pramila Jayapal (D-Wash), a lead sponsor of the bill: “Millions of Americans are losing their job and their health insurance at precisely the moment when we need everyone to be able to access care and treatment for illness. The Medicare Crisis Program Act would guarantee healthcare for millions of people struggling with the health and economic realities of the Covid-19 pandemic and protect Americans from outrageous out-of-pocket costs.” Joe Kennedy (D-Mass), another lead sponsor, is quoted: “A healthcare system more concerned with profits than patients was never equipped to confront a pandemic like Covid-19. Because of our nation’s stubborn failure to guarantee universal healthcare, millions of people are now not only out of a job, but out of health care coverage as coronavirus ravages their communities. With the Medicare Crisis Program Act, we can begin to fill in the gaps of a fundamentally flawed healthcare system during this pandemic and chart a path towards Medicare For All when it ends.”
With Trump in the White House and Republicans in control of the Senate, such Democratically initiated legislation is unlikely to become law.
The political-economic causes
The employment-related trends have been fostered by a corporate-dominated capitalist economic system that gives priority to maximizing profit and shareholder value. Over the last forty years or so, this system has led to a massive outsourcing of jobs to lower-wage economies, the gutting of government regulations (e.g., Occupational Safety and Health Administration), court decisions and government policies that have severely weakened collective bargaining (e.g., right-to-work laws; use of scab labor to break strikes). Additionally, employers have the legal power to fire employees “at will,” avoid union or high-wage workers by increasingly contracting out work to non-union firms. There are some employers who exploit undocumented workers (e.g., farm, construction, and landscaping workers). On top of these anti-worker strategies, employers are increasing the automation/robotization of work, a topic that is explored in such books as Erik Brynjolfsson and Andrew McAfee’s Race Against the Machine, or Martin Ford’s Rise of the Robots: Technology and the Threat of a Jobless Future. African Americans, Latinx, Native Americans, and other groups have been and continue to be subjected to multifaceted types of institutionalized discrimination in the economy and in all facets of their lives. Hence, they end up with higher unemployment rates, higher labor-force non-participation rates, along with lower wages, benefits, and job security than their white counterparts.
There is little evidence that these trends are going to subside or be reversed without major interventions by the federal government. The COVID-19 pandemic has intensified all of these trends. And, of course, Trump, his administration, the Republicans in Congress and in state legislatures across the country have continued to accommodate to, if not accelerate, these trends. If Trump is reelected, they will only get worse than then are.
One example of Trump’s failed “policies”
Five million manufacturing jobs have been lost over the past two decades. Edward Alden addresses this issue in an article for Foreign Policy titled “No, the Pandemic Will Not Bring Jobs Back From China” (https://foreignpolicy.com/2020/05/26/china-jobs-coronavirus-pandemic-manufacturing-trump). He reminds us of Trump’s pledge to do just that, writing: “No idea has been more central to U.S. President Donald Trump’s philosophy of ‘America first’ than bringing jobs back home.” Alden continues: “In his 2017 inaugural address, he lamented that ‘one by one, the factories shuttered and left our shores, with not even a thought about the millions upon millions of American workers left behind.’ Under his presidency, a newly elected Trump promised, ‘we will bring back our jobs.” With the rise of the coronavirus pandemic, officials in the Trump administration came to believe that US jobs located in China would surely return to the US. Alden quotes Commerce Secretary Wilbur Ross who in January said that the virus, which then was confined to China, would “help to accelerate the return of jobs to North America.” Robert Lighthizer, the US Trade Representative, said that now US companies were left with no choice but to “bring the jobs back to America.”
In the first 3 years of the Trump administration, even before Covid-19 raised its head in the US, trade policy was motivated by the desire to bring back manufacturing jobs from China and elsewhere. Alden reminds us: “The administration’s signature actions on trade—imposing tariffs on steel and aluminum, renegotiating the North American Free Trade Agreement with Canada and Mexico, pursuing a trade war with China—were all crafted with an eye toward forcing U.S. companies to bring production back to the United States. Since January 2018, the average tariff rate on U.S. imports of Chinese goods has risen from just 3.1 percent to nearly 20 percent.” But such efforts are, Alden contends, unlikely to achieve their desired goal for two reasons. “First, the combination of trade war and the pandemic is unlikely to force companies to bring manufacturing operations back to the United States on a significant scale. And second, with the advances in automation, any such reshoring is unlikely to bring the promised benefits in terms of well-paying employment for Americans.”
On the first point, many US companies have relocated their production out of China, but there is “no evidence of any coronavirus-induced rush by companies to return operations to the United States.” Rather, according to the most comprehensive data, collected by Panjiva, an arm of S&P Global that closely tracks supply-chain movements, “shows the winner of the trade war has been Southeast Asia—especially Vietnam.” Alden gives these examples. “Production of Google’s new Pixel 4A smartphone has largely been shifted from China to Vietnam, while Microsoft is now making the Surface tablet there as well. Google is also expanding manufacturing of smart-home products in neighboring Thailand. Foxconn, the Taiwanese company that assembles Apple’s iPhones in China, has increasingly been moving to Vietnam as the new base for its consumer electronics exports to the United States. Telecommunications products such as smartphones now account for more than 20 percent of Vietnam’s exports to the United States, double the share in 2015. The data shows no trend of companies moving production back to the United States.”
Evidence on US imports tells a similar story. Imports from China “dropped by 17 percent between 2018 and 2019,” but “half of that hole was filled by other Asian countries and by Mexico. Meanwhile, despite generous tax cut and aggressive deregulation, “US manufacturing output stayed flat, with higher domestic sales offset by lower exports.”
On top of the trade considerations, manufacturing companies in the US are automating many of their operations. “Where companies are choosing to expand U.S. manufacturing operations, their new factories are heavily automated. For example, LG Electronics, the South Korean company, recently built a new 1 million-square-foot plant in Clarksville, Tennessee, partly in response to the threat of tariffs the Trump administration slapped on imported South Korean washing machines in 2018. But inside the plant, most of the work is being done by industrial robots made by LG’s own Robostar affiliate in South Korea.” Moreover, Alden’s sources think “the pandemic is likely to accelerate the trend toward automation.” He refers to research As Mark Muro and his colleagues at the Brookings Institution who “argue [that] automation happens in bursts, and the virus is likely to trigger a fresh round. In economic shocks such as the one the world is currently experiencing, Muro and his co-authors write, ‘humans become relatively more expensive as firms’ revenues rapidly decline. At these moments, employers shed less-skilled workers and replace them with technology and higher-skilled workers, which increases labor productivity as a recession tapers off.’
At best, Alden writes, the employment gains in manufacturing “are likely to be modest.” In the meantime, the big winners during the ravages of the pandemic are the giant digital corporations. For example, Amazon “has built the most efficient distribution chain on the planet” and is thriving in the pandemic. However, Amazon’s warehouse workers and the drivers that deliver the packages are not well paid. And this is certainly true of the grocery cashiers, the meatpackers, the sanitary workers, the millions of others who are keeping the economy going during the [just lifted] shutdown, and the millions more who will return to low-wage service jobs when it starts back up.”
Given this growing and dire employment situation in the United States, there are a number of proposals about what to do. Some simply propose new regulations, the enforcement of already existing laws, and/or another round of temporary government relief for workers suffering from the COVID-19 pandemic. Then there are some different, but complementary, proposals. Here I refer to six of them. Some of these proposals may sound outlandish to the ears of mainstream politicians but then we are living in an outlandish time. It remains to be seen, but the combined pandemic and economic decline may well push more and more people to demand more substantial and permanent changes than the two major political parties now offer. Here I identify six radical options.
One is to enhance the power of workers vis-à-vis employers. Shaun Richman offers a comprehensive proposal on how to strengthen unions, arguing for a “Labor’s Bill of Rights” in his richly documented new book, Tell the Bosses We’re Coming: A New Action Plan for Workers in the 21st Century. He refers to the need to implement ten “rights.”
- The right to free speech – i.e., to give union representatives a chance to speak to workers at the workplace during union drives
- The right to self-defense and mutual aid – allow workers to support the strikes of other workers
- The right to strike – e.g., the right to return to a job after a strike is over
- Labor organizing efforts should be free from unreasonable search and seizure – e.g., end lawsuits brought by employers to divert employees from other actions and to burden unions with significant costs
- The freedom from taking away union fees – This is what “right to work laws” do, that is, allow some workers in a bargaining unit not to pay union dues while at the same time benefiting from what has been won in union contracts. Such laws should be challenged and there should be education and public relations campaigns to combat such laws.
- The right to not be locked out for exercising labor rights – i.e., enforce the law against unfair labor practices
- The right to your job – i.e., require that termination for a job is for “just cause” rather than just at the will of the employer
- Freedom from cruel and unusual regulation – by matching full-disclosure of unions with full disclosure by employers of the salaries and perks of a company’s executives
- The right to make demands and bargain freely – the right of workers or their representatives “to veto or amend management’s decisions to downsize, subcontract, automate or shift work overseas.”
- Powers not exercised by unions are reserved to workers who act in concert – i.e., the need to protect the right of workers to bring class action suits against employers
Two, provide all households with a government income supplement or alternative to paid work either in the form of a guaranteed minimum income or universal basic income. The idea of a universal basic income is explored in-depth by Allan Sheahen in his book, Basic Income Guarantee: Your Right to Economic Security, and by Daniel Raventos in his book, Basic Income: The Material Conditions of Freedom.
Three, Marxist economist Richard Wolff has long argued the corporate-dominated system of capitalism that now prevails should be replaced by a system of workplace democracy, in which workers participate in the governance of their workplaces and worker-owned businesses grow (e.g., Democracy at Work: A Cure for Capitalism).
Four, Michael D. Yates argues for transitional policies that he thinks would take the country toward a form of democratic socialism in his book, Can the Working Class Change the World? Here is the list.
- Much shorter working hours
- Early and Secure retirement
- Free universal healthcare
- An end to all corporate subsidies
- The immediate termination of all forms of discrimination
- Bans on fracking and other profit-driven environmental dispoliations
- An end to the war on terror along with the closing of all US military bases in other countries
- The abolition of the present prison system
- Free schooling at all levels
- Open borders combined with the termination of US financial support for oppressive governments
- Community-based policing
- Transfer of abandoned buildings and land to communities and groups that will put them to socially useful purposes (p. 145)
Five, some authors delve into what an environmentally sustainable economic alternative would entail. For example, Fred Magdoff and Chris Williams take up this challenge in their book, Creating an Ecological Society: Towards a Revolutionary Transformation.
Six, economist Robert Pollin envisions how to expand employment within an environmentally sustainable framework across the world his book, Greening the Global Economy.
The US is caught up in unprecedented dual crises stemming from the pandemic and by a drastic, destabilizing decline in the economy. If Trump and the right-wing forces that support him prevail, we can expect that an increasing proportion of the US population will find themselves economically insecure, marginalized, and/or poor. They will be without union representation and burdened with inadequate employment options, with jobs that pay low wages, provide no benefits or affordable benefits (e.g., health insurance; pensions), and provide little or no job security. If Biden wins in November and the Democrats control the US House and US Senate, policies will be implemented to improve the economic and employment situations of an increased number of Americans, but will be limited by the huge national debt and the threat of “corporate strikes.” If Trump wins, there is a good chance that a full-blown fascist system will emerge, based on an authoritarian leadership of Trump, a corporate-dominated economic system, an anti-democratic influence of unlimited money in politics, extensive voter suppression. So, the upcoming November election is extraordinarily important. If the country is to avoid the worst outcome, Americans must vote in November, to avoid the tyranny of a second presidential term for Trump, to maintain Democratic control of the House, and to win control of the Senate. It is basically about the survival of a rather minimal form of democracy – or not. If the economy deteriorates, and as climate change continues to affect and disrupt more and more of the world, perhaps there will be a chance for more meaningful changes in US political economy than at present.