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Don’t Just Send People Money During a Pandemic—Do It All the Time

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Universal Income Project Leadership - Universal Income Project

The evidence is in: Sending out direct cash payments has been a full-blown success—and we can’t afford to stop.

It’s become almost a cliché in the politics of Washington, D.C.: Every time someone proposes expanding a social program or creating a new one, scores of politicians, lobbyists and so-called economic ?“experts” will pop up to tell you that it will cost too much and we can’t afford it. Somehow, money is never an issue when it comes to tax cuts for the wealthy and corporations or increasing our military budget, but programs that support everyday people are just too damn expensive.

new analysis from the University of Michigan on the impact of recent stimulus payments adds to a growing body of evidence that shows when it comes to direct cash assistance programs, cost is not a prohibitive issue. In fact, for social programs like these, we may be unable to afford not to do them.

According to the analysis, which looked at data from the Census Bureau Household Pulse Survey, in the weeks following the stimulus check payments in December 2020 and March 2021, households across the country saw a significant decrease in their material hardship. American families reported increased food security, a greater ability to pay for household expenses and less anxiety. This effect was particularly pronounced in low-income households and households with children?—?in the six weeks following the passage of the December 2020 Covid relief bill, amongst families with children, the rate of not having enough to eat fell by 21% and the rate of having difficulty paying for household expenses fell by 24%. These rates dropped again by 23% and 31%, respectively, following the passage of the American Rescue Plan in March 2021.

These findings align with the results of a previous analysis in 2017 from the Roosevelt Institute which looked into various programs that provided direct, unconditional cash to individuals in the United States and Canada, such as the Alaska Permanent Fund Dividend and the Eastern Band of Cherokees casino dividend program. Both of these analyses show the same dynamic: when people receive money with no strings attached, they spend it on the things they need, leading them to live healthier, less anxious lives.

While these outcomes are certainly beneficial for recipients in the immediate term, the broader implications of these changes are just as important. When people don’t have food or are living in poverty, it’s not just a burden on them?—?it’s a burden on all of society. These conditions are directly tied to poorer health outcomes, which puts a drain on our nation’s healthcare system. Poor people are more likely to turn to crime as a means of supporting themselves. Those in poverty may require continued support from our inadequate existing social welfare programs, relying on programs like food stamps, housing assistance and disability insurance to barely make ends meet.

The social implications of poverty are even more pronounced among children, where its impact on cognitive development and educational opportunities may alter their life trajectories. Living in a financially stable household and getting enough to eat could mean the difference between having opportunities later in life and getting trapped in a low-income job with no prospects for advancement.

When considering the aggregate impact of poverty on our society, the results are staggering. A 2018 analysis in the Social Work Research journal found that childhood poverty alone costs our society more than $1 trillion every year from a combination of lost productivity, increased health and crime costs, and increased costs as a result of childhood homelessness and maltreatment.

To accurately assess the cost of social programs, we should be comparing the required expenditures to the expected savings from poverty reduction. A good example is the recent expansion of the child tax credit?—?described as a ?“guaranteed income for families”—which is set to provide up to $300 per child per month for kids under the age of six and $250 per child per month for kids between six and seventeen starting in July. The Congressional Joint Committee on Taxation expects this expansion to cost $110 billion for the year, while the Center on Budget and Policy Priorities projects that the program will decrease child poverty by more than 40%. Well, 40% of $1 trillion is $400 billion, which means the savings from this expansion are over three times the amount spent.

There’s good reason to think that the latest round of stimulus checks will also yield positive long-term returns, as people teeter between regaining their financial footing and slipping into poverty. ?“This money is going towards all the bills that weren’t paid during the time we had to take off,” according to Sandy Lash, a single mother in Fort Wayne, Indiana who relied on the stimulus payments to make it through the pandemic. ?“Receiving these checks will enable [us] to make a difference and move up to where we don’t have to struggle anymore.”

This presents our society with a clear choice: Do we allow increasing poverty and financial precarity to continue to drain away our society’s resources? Or do we make the investment now to create a secure and productive population through programs providing direct cash to families? An immediate first step would be to make the expanded child tax credit, which is set to expire after this year, a permanent, ongoing program. Beyond that, establishing a full, national guaranteed income program that provides monthly payments to all Americans?—?such as the one proposed by Rep. Rashida Tlaib through her Automatic BOOST to Communities Act—could pay massive dividends down the road by fully eliminating material poverty in the United States.

It’s not hard to see which of these approaches is the more affordable one.

This blog originally appeared at In These Times on June 9, 2021. Reprinted with permission.

About the Author: Jim Pugh is  is the co-director of the Universal Income Project.


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Reversing job market opens door to larger Biden stimulus

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The latest coronavirus wave slammed the U.S. economy in December, wiping out 140,000 jobs, raising pressure to accelerate vaccinations and blowing the door open for President-elect Joe Biden and a narrowly Democratic Congress to push for even more stimulus spending within weeks.

The December employment report, the last to be released during President Donald Trump’s administration, leaves the nation around 11 million short of the level of jobs from before Covid-19 crushed the economy and wiped out around 23 million jobs. Trump’s record will now include a recovered stock market but an enormous net loss of jobs.

Most of the losses in December, nearly 500,000, came in the leisure and hospitality industries as fresh lockdowns and lower travel led to widespread layoffs. The expiration of some of the first big stimulus package, passed back in March, also left consumers with less money to spend, hitting demand in the economy.

The December tumble, which left the jobless rate at 6.7 percent, suggests the distribution and adoption of coronavirus vaccines must increase rapidly in order to avoid much worse damage and allow for potential recovery in the spring and summer. 

And it will give Biden and the Democrats wider leeway to force through trillions of dollars more in stimulus spending — by whatever legislative means available — including significant help for state and local governments. It also means the Democrats will likely be able to approve enough direct cash to reach the “$2,000 check” level they’ve long supported, when including the $600 checks approved by Congress and signed by Trump last month. 

“The economy went into reverse in December and we are still 11.5 million jobs short of where we were and the biggest problem was the virus and the expiration of stimulus,” said Harvard professor Jason Furman, who served as chair of the Council of Economic Advisers under President Barack Obama. “Much more action is needed to control the virus and support the economy. And I think that will be enough to generate large improvements over the course of 2021.”

The December jobs report cements a strange legacy for Trump. The nation will have millions of jobs fewer than when he took office, partly due to a slow and halting federal response to the coronavirus. But the stock market has regained all its losses from the spring and now is hitting records once again as many companies that thrived during lockdowns soar and investors bet on a stronger 2021.

The bifurcation has led to a stark “K-shaped” recovery in which the top level of workers have largely if not completely recovered while tens of millions of Americans in lower-paying service industry jobs suffer. Economic inequality, already bad before the virus hit, is now at levels not seen since the 1920s before the Great Depression. Reversing that trend is among Biden’s top priorities. And he now has more weapons at his disposal with the narrowest of Senate majorities following Democrats‘ two special election wins in Georgia. 

Biden will have full control of Washington — though not a filibuster-proof majority in the Senate — during the first two years of his term. And his economic advisers plan a heavy focus on spending to boost vaccination distribution, support strapped state and local governments, improve American infrastructure, further expand jobless benefits and pump more direct cash into individual households. 

Economists and Wall Street analysts say some of the recent market ebullience is based on the assumption that Biden will be able to deliver on much of this even if Democrats decide against blowing up the legislative filibuster, which requires 60 votes in the Senate to overcome. 

But they will have multiple opportunities to use the “budget reconciliation”vehicle to pass significant spending increases with a one-vote margin in the Senate. There is also the chance that more Republicans in the Senate will come around to the need for bigger stimulus spending given the wave of new coronavirus cases and the slow nature of the vaccine rollout.

“With the elections in Georgia giving control to the Democrats, we should expect to get a fairly large and targeted fiscal aid package in the first quarter of the year which investors clearly have seized on,” said Joseph Brusuelas, chief economist at consulting firm RLM. “We are going to get a targeted fiscal aid package quickly then another stimulus package and then infrastructure. And these are all huge things.” 

The state and local aid will be especially important as states are already struggling to pay billions in extended benefits approved by Congress last month, leading to several weeks of delays in payments in places like California, Michigan, Florida and Washington. Losses in state and local government jobs forced by lower Covid-era tax receipts and the need to balance budgets is also driving down the national jobs numbers. 

Failing to approve larger stimulus spending could push the economy into either a double-dip recession or a repeat of the slow, halting and unequal recovery that followed the financial crisis of 2008. The Biden team, many of whom worked in government during the Obama years, is determined to learn the lessons of the last major slowdown.

Still, even with major stimulus spending, the recovery will depend in large part on effective and widespread adoption of vaccines. And even then, it may take years to return to economic conditions before the virus hit. “I’m worried some of the scarring is extensive enough that we will be far from fully recovered at the end of 2021,” said Furman. “Today’s number expands what was already an open window for more support for the economy, but we will not be back in perfect condition until 2022 or 2023. It’s going to take a while in some places.”

Job losses in December, which ended seven months of gains following the enormous virus-induced declines, largely came in the service industry where restaurants and bars slashed 372,000 positions as cold weather and new lockdowns limited demand. Overall, employment in leisure and hospitality — which includes hotels, tourist sites and other categories, declined by 498,000. Gains in professional and business services, retail and other areas were not enough to offset the giant losses elsewhere. Government jobs declined by 45,000 amid growing budget crunches around the nation. 

There are now around 11 million unemployed and the jobless rate remained at 6.7 percent, well below its Covid-ear peak of over 14 percent but still double what it was before Covid hit. And there are still nearly 20 million Americans on some form of jobless assistance.

But Wall Street traders and many economists remain hopeful that the slide in jobs will reverse fairly early next year given prospects for vaccines and more fiscal aid. Should either of those things fail, however, the numbers could get significantly worse. 

“While we remain very upbeat on the US’ medium- to long-term prospects, we have to be braced for more bad economic data that could last well into the second half of 2021,” James Knightley, chief international economist at financial firm ING, wrote in a note to clients on Friday.

This blog originally appeared at Politico on January 8, 2021. Reprinted with permission.

About the Author: Ben White is POLITICO Pro’s chief economic correspondent and author of the “Morning Money” column covering the nexus of finance and public policy.


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“THIS IS NOT GOOD NEGOTIATING. THIS IS A COLLAPSE”–BERNIE SANDERS

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Late last night, Congress passed a $908 billion COVID relief bill that will extend unemployment benefits through the early spring, provide support for small businesses, schools, health care, nutrition, rental assistance, childcare, broadband, and the Postal Service, as well as funding to help distribute vaccines.

This legislation also includes, importantly, a $600 direct payment for every working class American earning less than $75,000 a year or $150,000 for a couple — plus $600 for each child. Let me be clear: this provision was not in the bill just two weeks ago. And, given the enormous economic desperation that so many working families are now experiencing, it is nowhere near enough as to what is needed. But, given the strong opposition of the Republican leadership in Congress and a number of Democrats, it’s no stretch to say that it would not have happened at all without our efforts, the hard work of progressive members in the U.S. House and grassroots progressives throughout the country. Republican Senator Josh Hawley also played an important role.

But let me state the obvious. The total funding in this bill was not even close to good enough, and my fear is that by reaching this agreement we are setting a bad precedent and setting the stage for a return to austerity politics now that Joe Biden is set to take office.

Remember, way back in May, the House passed a $3.4 trillion HEROES Act, which was a very serious effort to address the enormous health and economic crises facing our country. Two months later, the House passed another version of that bill for $2.2 trillion.

That same month, Republican Majority Leader Mitch McConnell proposed a $1.1 trillion piece of legislation that included a $1,200 direct payment for every working class American.

Months later, Treasury Secretary Steve Mnuchin, negotiating on behalf of President Donald Trump, proposed a COVID relief plan with Speaker Pelosi for $1.8 trillion that also included a $1,200 direct payment.

And yet, after months of bi-partisan negotiations by the so-called Gang of 8, we ended up with a bill of just $908 billion that includes $560 billion in unused money from the previously passed CARES Act — a worse deal than was previously proposed by Mitch McConnell and Donald Trump.

So we went from $3.4 trillion, to $2.2 trillion, to $1.8 trillion from Trump and $1.1 trillion from Mitch McConnell to just $348 billion in new money — roughly 10 percent of what Democrats thought was originally needed and half of what Trump and McConnell offered in direct payments.

This is not good negotiating. This is a collapse. [my emphasis] It is also no coincidence that as it became clear Joe Biden would become the next president of the United States, we started to hear a lot of talk from my Senate colleagues in the Republican Party about their old friend the deficit.

We couldn’t afford $1,200 for every working class American and $500 for their children because of the deficit.

We couldn’t afford to support state and local governments struggling during the middle of this health and economic crisis because of the deficit.

We couldn’t afford more meaningful and robust unemployment benefits for those who lost their jobs during the middle of this pandemic because of the deficit.

Yet, this is the same Republican Party so concerned about the deficit that they passed a $1.9 trillion tax bill benefiting some of the richest people and largest corporations in this country.

This is the same Republican Party so concerned about the deficit that they, just last week, pushed through the largest defense spending bill in the history of this country, a total of $740 billion. This is more money than the next 10 nations combined spend in their defense budgets.

This is the same Republican Party so concerned about the deficit that they spent trillions of dollars on war over the past two decades.

This is the same Republican Party so concerned about the deficit that it gives hundreds of billions of dollars in giveaways to oil, gas and coal companies that exacerbate the climate crisis.

This is the same Republican Party so concerned about the deficit that it provides huge amounts of corporate welfare to companies like Walmart that pay their workers starvation wages and provide them meager benefits that must be supplemented by taxpayer-supported programs.

And during any of these debates, do you recall any of my Republican colleagues asking how these proposals were going to be paid for? I don’t. So forgive me for thinking their sudden display of concern for the deficit seems a bit insincere. More to the point: it’s total hypocrisy!

And our concern at this moment is that no matter what happens in Georgia next month, and which party controls the Senate, we cannot allow this type of inadequate negotiation again on major legislation. Yes. The deficit is important, but it is not the most important thing. At this unprecedented moment in American history, with a growing gap between the very rich and everyone else, and when many millions of Americans are suffering, Democrats in Congress must stand up for the working families of our country. No more caving in.

Today, half of our people are living paycheck to paycheck, one out of four workers are either unemployed or making less than $20,000 a year, more than 90 million Americans are uninsured or under-insured, tens of millions of people face eviction, and hunger in America is exploding. Tragically, there is more economic desperation in our country today than at any point since the Great Depression.

We have a responsibility to the struggling families of our country.

And let’s be honest: if we allow Republicans to set the parameters of the debate going forward, like they did in this current COVID relief bill, the next two to four years are going to be a disaster.

Want to expand health care? Where’s the money going to come from?

Want to rebuild our infrastructure? Where’s the money going to come from?

Want a Green New Deal, or even support for Joe Biden’s more modest climate proposal? Where’s the money going to come from?

So the fundamental political question of our time is: are we going to allow Mitch McConnell, the Republican Party and corporate America to return us to austerity politics, or are we going to build a dynamic economy that works for everyone?

My fear is that this COVID relief bill sets a very dangerous precedent for when Joe Biden takes office next month. And we cannot allow that to happen.

Going forward, Democrats must have an aggressive agenda that speaks to the needs of the working class in this country, income and wealth inequality, health care, climate change, education, racial justice, immigration reform and so many other vitally important issues. And in that struggle, we all have a role to play. So please, make your voice heard in the weeks and months ahead. Call your members of Congress, post your thoughts on social media, encourage progressives in your community to run for office, and volunteer and contribute to those who will fight for a government that will work for all of us, and not just the 1 percent and wealthy campaign contributors in this country.

This blog originally appeared at Working Life on December 22, 2020. Reprinted with permission.

About the Author: Jonathan Tasini is a political / organizing / economic strategist. President of the Economic Future Group, a consultancy that has worked in a couple of dozen countries on five continents over the past 20 years.


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‘We’re already too late’: Unemployment lifeline to lapse even with an aid deal

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U.S. lawmakers are struggling to hammer out another economic relief package before Congress adjourns next week. But for millions of Americans, the deadline may have already passed.

Even if Congress reaches a deal, some 12 million unemployed people could see their benefits lapse after Christmas. Worker advocates say it could take weeks for the jobless aid programs to get back online as lags in programming for outdated state systems cause delays in relief checks.

“We’re already too late,” said Michele Evermore, an unemployment insurance expert at the National Employment Law Project. From the time Congress passes an extension of unemployment aid, she said, many states wouldn’t be up and running for “three weeks or four weeks” at the fastest.

That would not only fuel the desperation of unemployed households but could also cut into consumer spending as the coronavirus resurges across the nation, jeopardizing the economic recovery just as Joe Biden’s presidential administration gets under way.

Several federal unemployment programs are set to run out the day after Christmas, cutting millions of Americans off from their financial lifelines if Congress doesn’t pass another relief package.

What’s worse for the unemployed, the nonprofits and food banks that many have been turning to have themselves been bleeding workers under the crushing demand during the pandemic.

A bipartisan group of lawmakers is circulating a proposal that would extend two major programs — Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation — through the spring. Both are slated to expire Dec. 31, with final payments going out Dec. 26 — which is less than a week before a federal moratorium on evictions is also set to expire.

The provisions are the only source of aid for those who have exhausted state benefits, as well as for gig workers, the self-employed and others hit hardest by the pandemic.

Anything Congress includes in the next round of aid that is even modestly different from the programs implemented earlier this year “is going to take time to reprogram,” said Elizabeth Pancotti, a policy adviser at the pro-worker Employ America. “In some states that might be a week or two; in other states, we’ve seen it [take] five, six, seven weeks.”


“Anything that’s just the slightest bit different is a nightmare to reprogram,” she added.

A spokesperson for the Illinois Department of Employment Security agreed that any delays depend on how the congressional programs are structured, adding that new programs — and often extensions of existing ones — “take time to stand up.”

Angela Delli-Santi, a spokesperson for the New Jersey Department of Labor and Workforce Development, said the state anticipates “no lapse” in providing benefits to people, although she also said it hinges on what the final language is on restarting the programs.

The bipartisan congressional proposal would provide the jobless with an extra $300 a week in their benefit checks — which would require state agencies to restart a program that expired at the end of July. The Federal Pandemic Unemployment Compensation program originally offered the unemployed an extra $600 a week, but Congress failed to extend it when it lapsed July 31.

Should Congress pass an extension of the programs, states would then have to wait for the U.S. Labor Department to issue guidance before sending out payments — which could be hard to turn around quickly during the holidays.

At the same time, the need for more aid is growing. About 1.3 million applications for unemployment benefits came in last week in both regular state programs and the federal PUA program, the Labor Department reported Thursday — the highest number of new claims since September.

New applications in state unemployment programs alone saw a more than a 30 percent jump in the week following the Thanksgiving holiday.

Without the cash, many unemployed will have no choice but to turn to food banks and other nonprofits. Miles-long lines of people have been overwhelming food banks, with demand rising by about 60 percent from last year, according to the nonprofit Feeding America.


Yet since the outset of the pandemic, nonprofits have shed nearly 1 million of their own workers: Not only has that created a greater need for services, but it has also driven up costs due to the need to purchase protective gear and execute other measures to keep volunteers safe.

“We’re already seeing nonprofits closing their doors — and we’re the backup for people,” said Rick Cohen, chief communications officer for the National Council of Nonprofits. “We are where they go when the government programs run out or when they’re not enough. And if we’re not there. Where do people turn?”

Nonprofits “weren’t designed to hold up this many people for this long,” NELP’s Evermore said. “These are all finite resources.”

“Unemployment insurance is the program that we created to deal with this particular problem,” she went on. “And without it, we can’t.”

Jessica Oyanagi, 40, was running a photography business out of Maui when the pandemic hit and she lost most of her customers. Because her photographers were independent contractors rather than employees, she was only eligible for unemployment insurance under PUA.

The program affords her about $1,000 a month, which is still not enough to make ends meet: She and her husband were forced to move in with her parents, and they rely in part on food stamps to keep themselves and their daughter fed.

It has been “the most stressful year of my entire life, I’m not going to lie,” Oyanagi said. “Every area of our life has been just completely turned upside down.”

Oyanagi isn’t alone: In mid-November, more than 27 million individuals told the Census Bureau they were relying on unemployment benefits to meet their spending needs. More than 75 million said they expected to lose their employment income in the next four weeks. And nearly 17 million people reported using SNAP benefits — better known as food stamps — to get by.

“They’re already behind on rent, they’re already behind on bills, they’re already struggling to pay utilities, and now they’re about to lose the little bit of income they still have,” said Julia Simon-Mishel, who leads the unemployment compensation practice at Philadelphia Legal Assistance, which provides services to low-income families.

The end of the eviction moratorium that the Trump administration imposed in September also poses a threat.

About 11.4 million renter households will owe an average of just over $6,000 in back rent, utilities and late fees totaling some $70 billion come January, according to Moody’s Analytics.

“Eviction notices are piling up on sheriffs’ desks across the country to be executed if the moratorium is not extended or renters don’t receive help with the back rent they owe,” the firm said in a statement. “Mass evictions in the dead of winter and during a raging pandemic will be unbearable for those losing their homes as well as being a blow to the already-fragile collective psyche.”

Anneliese Monkman, 28, who lost her job at a hotel in the spring and has struggled to find demand for her fledgling wedding planning business, receives about $355 a week in unemployment — all of which will disappear if Congress does not extend the emergency unemployment programs.

“We’re kind of choosing what bills we’re going to pay,” she said.

Workers are likely to dig themselves deeper into debt to weather the lapse in income — a spiral that economists warn could worsen the recession. Last resorts like payday loans or credit cards could serve to dig low-income workers into an even deeper hole, exacerbating wealth inequity.

“They only have high interest options available to them,” Evermore said. “Whenever they do get their pittance for [unemployment insurance] turned back on again … it’s going to go to paying back the debt that they’ve accrued.”

Eleanore Fernandez, 48, was working as an executive assistant at a Silicon Valley startup when the pandemic hit and she lost her job. She makes about $900 a month under one of the federal programs set to expire at the end of the month.

She said if her benefits lapse, she will need to consider taking out a loan on top of the money she already owes her landlord, who has been allowing her to pay 25 percent of her rent.

“I’ve gone through my savings almost now,” she said. “So if [the aid] runs out, then I don’t know.”

This blog originally appeared at Politico on December 11, 2020. Reprinted with permission.

About the Author: Rebecca Rainey is an employment and immigration reporter with POLITICO Pro and the author of the Morning Shift newsletter.

About the Author: Eleanor Mueller is a legislative reporter for POLITICO Pro, covering policy passing through Congress. She also authors Day Ahead, POLITICO Pro’s daily newsletter rounding up Capitol Hill goings-on.

About the Author: Kellie Mejdrich is a reporter for POLITICO Pro Financial Services.

About the Author: Katherine Landergan covers the state budget, tax policy and labor issues for POLITICO New Jersey.


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Three things unemployed people should know right now, this week in the war on workers

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Unemployment claims just hit their highest level in months, Republicans are still refusing to negotiate a stimulus package that does half what the country needs, and people who have been unemployed for months are increasingly desperate. Only the government can truly help unemployed people, but the National Employment Law Project’s Michele Evermore has three pieces of advice for unemployed workers in the coming weeks. It’s not cheerful news, but it’s worth knowing.

First, “If you have received a [Pandemic Unemployment Assistance] overpayment notice, you are not alone.” But you do have the right to appeal. Second, know that both PUA and Pandemic Emergency Unemployment Compensation are slated to end on December 26 (Merry Christmas and a happy New Year, everyone!), and if Congress extends them at the last minute, there will likely still be a lapse.

”The takeaway is that, if Congress extends CARES Act benefits, you may have to wait through part of January to get access to benefits that stopped at the end of December,” Evermore writes. “And again, if Congress passes relief, it has historically been structured so that your benefits are restored beginning the date of enactment. So there shouldn’t be a gap in your eligibility if that happens, just a gap in when you get paid.”

Finally, no matter what happens: organize, organize, organize. Make sure this kind of congressional contempt for millions of struggling people doesn’t happen again.

This blog originally appeared at Daily Kos on December 12, 2020. Reprinted with permission.

About the Author: Laura Clawson has been a contributing editor since December 2006. Clawson has been full-time staff since 2011, and is currently assistant managing editor at the Daily Kos.


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The Nightmare Facing the Poor and Working Class If There’s Not Another Stimulus

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As mil­lions of U.S. work­ers face unem­ploy­ment, food inse­cu­ri­ty and evic­tion amid the coro­n­avirus pan­dem­ic, the lim­it­ed aid pro­vid­ed by the fed­er­al government’s flawed CARES Act from March has long since dried up. 

Last week, fol­low­ing more than six months of stalled nego­ti­a­tions with con­gres­sion­al Democ­rats over a new eco­nom­ic relief pack­age, Pres­i­dent Trump abrupt­ly announced he was halt­ing talks until after the Novem­ber election.

While the pres­i­dent quick­ly back­tracked and is now report­ed­ly con­tin­u­ing to nego­ti­ate, the fed­er­al government’s ongo­ing fail­ure to pass a new relief pack­age spells cat­a­stro­phe for a U.S. work­ing class already pushed to the brink by an eco­nom­ic cri­sis seem­ing­ly on par with the Great Depression. 

Here’s a break­down of what the con­tin­ued lack of fed­er­al help means for workers:

Sig­nif­i­cant­ly reduced unem­ploy­ment checks

Per­haps the most ben­e­fi­cial part of the CARES Act was the extra $600 a week it pro­vid­ed to work­ers on unem­ploy­ment—a tem­po­rary life­line that the GOP-led Sen­ate allowed to expire on July 31. 

Week­ly unem­ploy­ment ben­e­fits vary wide­ly by state, rang­ing from $44 in Okla­homa to $497 in Wash­ing­ton. The $600 week­ly sup­ple­ment was an across-the-board ben­e­fit that ensured unem­ployed work­ers in any state main­tained a decent income despite los­ing their jobs due to the pandemic.

The Eco­nom­ic Pol­i­cy Insti­tute found that the con­sumer spend­ing gen­er­at­ed by that extra $600 per week sup­port­ed over 5 mil­lion jobs, and that con­tin­u­ing the sup­ple­ment through the mid­dle of next year would have raised U.S. gross domes­tic prod­uct (GDP) by a quar­ter­ly aver­age of 3.7 percent.

After this ben­e­fit expired, rather than agree to Democ­rats’ demands to extend it, Pres­i­dent Trump signed an exec­u­tive order slash­ing it by 50 per­cent—allow­ing states to use fed­er­al funds to pro­vide only a $300 week­ly unem­ploy­ment sup­ple­ment. At least sev­en states have already exhaust­ed these funds. 

Mean­while, by los­ing the week­ly $600 boost, unem­ployed work­ers saw their incomes drop by two-thirds, mak­ing it more dif­fi­cult to pay the bills and afford gro­ceries. There are cur­rent­ly 25.5 mil­lion work­ers receiv­ing unem­ploy­ment ben­e­fits. With at least 14 mil­lion more job­less work­ers than job open­ings, mil­lions will be forced to rely on unem­ploy­ment insur­ance for the fore­see­able future—but now with a great­ly reduced check.

Mass fur­loughs in the air­line industry

Anoth­er one of the CARES Act’s most help­ful pro­vi­sions was the Pay­roll Sup­port Pro­gram (PSP), which pro­vid­ed $32 bil­lion in grants to the avi­a­tion indus­try for the sole pur­pose of keep­ing work­ers on pay­roll and pro­vid­ing ben­e­fits dur­ing the Covid-19 cri­sis. The avi­a­tion indus­try employs 750,000 work­ers, many of them union­ized, and accounts for 5 per­cent of GDP.

The Sen­ate allowed the PSP to expire on Octo­ber 1, result­ing in 40,000 air­line work­ers imme­di­ate­ly being fur­loughed with­out pay or health insur­ance. The industry’s unions are wag­ing an aggres­sive cam­paign to extend the pro­gram. With­out the fed­er­al gov­ern­ment con­tin­u­ing the PSP, more fur­loughs are like­ly to come as pas­sen­ger air­lines suf­fer a loss in busi­ness due to the pandemic.

More lay­offs at small businesses

The Pay­check Pro­tec­tion Pro­gram (PPP), anoth­er com­po­nent of the CARES Act, offered up to $659 bil­lion in for­giv­able loans to small busi­ness­es to keep work­ers on pay­roll. The pro­gram has been crit­i­cized for allo­cat­ing mil­lions of dol­lars to large cor­po­ra­tions and com­pa­nies con­nect­ed to politi­cians, but it has also offered much-need­ed finan­cial sup­port to small busi­ness­es across the country.

The appli­ca­tion dead­line for PPP loans was on August 8. While the Trump admin­is­tra­tion claims the pro­gram saved 51 mil­lion jobs, econ­o­mists have put that num­ber at any­where from only 2.3 mil­lion to 13.6 mil­lion.

What­ev­er the pre­cise num­ber, the PPP’s impact is quick­ly run­ning out of steam. Bor­row­ers say they expect to lay off work­ers with­in six months, while a Nation­al Restau­rant Asso­ci­a­tion sur­vey indi­cates that a whop­ping 40 per­cent of all U.S. restau­rants could go out of busi­ness in the com­ing months, lead­ing to mil­lions of more layoffs. 

No sec­ond $1,200 stim­u­lus check

While Sen. Bernie Sanders and pro­gres­sive Democ­rats have been call­ing on the fed­er­al gov­ern­ment to pro­vide a $2,000 month­ly check to every U.S. adult for the dura­tion of the pan­dem­ic, the CARES Act instead pro­vid­ed a one-time check of $1,200—which exclud­ed many undoc­u­ment­ed immi­grants and col­lege-age adults. Econ­o­mists report that the checks did vir­tu­al­ly noth­ing to stim­u­late the econ­o­my, though they did help poor and unem­ployed work­ers par­tial­ly cov­er a few weeks’ worth of basic expenses.

Pres­i­dent Trump and con­gres­sion­al lead­ers have been say­ing for months that a sec­ond $1,200 check is on the way. But with­out anoth­er relief bill, even this mea­ger finan­cial assis­tance will not materialize.

An uncer­tain future

On Octo­ber 1, the Demo­c­ra­t­ic-con­trolled House of Rep­re­sen­ta­tives passed a scaled-down ver­sion of the HEROES Act, an eco­nom­ic relief pack­age they orig­i­nal­ly passed in May that extends the lim­it­ed aid from the CARES Act. 

Among oth­er things, the $2.2 trillion bill would con­tin­ue the $600 week­ly unem­ploy­ment sup­ple­ment to the end of Jan­u­ary (mak­ing it retroac­tive to Sep­tem­ber 6), allo­cate anoth­er $25 bil­lion for air­line work­ers, allow small busi­ness­es to apply for a sec­ond PPP loan, send out a sec­ond $1,200 stim­u­lus check, pro­vide $50 bil­lion in emer­gency rental assis­tance, and give an addi­tion­al $10 bil­lion to the Sup­ple­men­tal Nutri­tion Assis­tance Pro­gram (SNAP).

Over the week­end, the Trump admin­is­tra­tion coun­tered with a small­er, $1.8 trillion pro­pos­al that would include a $400-per-week unem­ploy­ment sup­ple­ment, $20 bil­lion for air­lines, anoth­er $330 bil­lion for PPP loans, and a sec­ond $1,200 check, among oth­er mea­sures—but nei­ther House Speak­er Nan­cy Pelosi nor Sen­ate Repub­li­cans appear ready to push this bill in their caucus.

While mil­lions of U.S. work­ers are left in the lurch and mass lay­offs con­tin­ue to mount, Trump and Sen­ate Repub­li­cans are instead focus­ing their atten­tion on ensur­ing right-wing, anti-union judge Amy Coney Bar­rett is hasti­ly con­firmed to the Supreme Court in time for the election.

“If this gov­ern­ment doesn’t work for us, then we need to focus on the fact that it is our labor that gives all the val­ue to this coun­try,” Asso­ci­a­tion of Flight Atten­dants pres­i­dent Sara Nel­son—who famous­ly called for a gen­er­al strike to end Trump’s fed­er­al shut­down in Jan­u­ary 2019—said last week. “This coun­try doesn’t run with­out us as work­ers. So we have to think about that option as well.”

This blog originally appeared at In These Times on October 19, 2020. Reprinted with permission.

About the Author: Jeff Schuhrke has been a Work­ing In These Times con­trib­u­tor since 2013. He has a Ph.D. in His­to­ry from the Uni­ver­si­ty of Illi­nois at Chica­go and a Master’s in Labor Stud­ies from UMass Amherst. Fol­low him on Twit­ter: @JeffSchuhrke.


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A $6.5 Trillion Stimulus Plan Now! Hong Kong Labor Activists Under the Gun

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Let’s go really big! I outline a $6.5 trillion stimulus—more than double what the Democrats in the House passed—because that’s what the people need over the next year: $1.3 trillion in wage guarantees; $715 billion for state and local governments; $600 billion for a “Pandemic Medicare For All”; $1.5 trillion to cancel all student debt; $200 billion for a rent and mortgage freeze…and a lot more. Fight me on the specifics—but let’s expand the debate and the way people think about what is possible, what is needed and what should be done.

Just a few days ago, China imposed a new National Security Law which is aimed at shutting down the mass protests that have consumed Hong Kong for more than a year. In the crosshairs especially are union activists who have been signing up people to dozens of new unions which doesn’t thrill China’s leaders who manage the linchpin for the global corporate supply chain. Cathy Feingold, the director of international affairs for the AFL-CIO and deputy president of the International Trade Union Confederation, joins me with a look at the pressures facing unions in Hong Kong.

This blog originally appeared at Working Life on July 8, 2020. Reprinted with permission.

About the Author: Jonathan Tasini is a political / organizing / economic strategist. President of the Economic Future Group, a consultancy that has worked in a couple of dozen countries on five continents over the past 20 years.


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Fewer Workers, Bigger Profits—and Endless Recession?

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Roger BybeeMotorcycle-maker Harley-Davidson is revving up its engines, nearly tripling last year’s profits in the second quarter by hauling in $71 million.

This follows first-quarter profits of $68.7 million. But Harley is still roaring toward a head-on collision with the workers in its hometown of Milwaukee, where the company has been a beloved symbol of the city’s gritty blue-collar image and pride in craftsmanship. Harley is still demanding $54 million worth of wage and benefit cuts, along with changes in work rules, from the United Steelworkers within the next 60 days.

Unless Harley gets the concessions before the current contract expires in April 2012, it has announced that it will zoom off to a new location with at least 1,400 jobs. Harley, like many other U.S. firms, is managing to extract bigger profits despite slow, sometimes declining sales and shrinking workforces, as the New York Times reported:

This seeming contradiction — falling sales and rising profits — is one reason the mood on Wall Street is so much more buoyant than in households, where pessimism runs deep and joblessness shows few signs of easing.

Many companies are focusing on cost-cutting to keep profits growing, but the benefits are mostly going to shareholders instead of the broader economy, as management conserves cash rather than bolstering hiring and production.

Clearly, bigger profits are doing nothing to promote an economic recovery. CEOs have little motivation to invest in new machinery and hire more people as spending power continues to lag badly—due precisely to the widespread wage-slashing and job cutting by other corporations doing the very same thing.

FORD NOW PRODUCING 62% OUTSIDE U.S.

The persistence of high unemployment—widely predicted to extend for as long as another four years or even longer—gives CEOs enormous leverage over workers. Even when profits are roaring back, as at Harley, U.S. corporations face no obstacles to relocating production in low-wage southern states or repressive nations like China or Mexico if workers refuse to concede to their demands.

Ford is cited by the Times as another firm that has managed to make bigger profits with lower sales and fewer workers:

At Ford, revenue in its North American operations is down by $20 billion since 2005, but instead of a loss like it had that year, the unit is expected to earn more than $5 billion in 2010. In large part, that is because Ford has shrunk its North American work force by nearly 50 percent over the last five years.

Somehow the Times’ neglected to mention that 62% of Ford’s production now takes place outside the United States. More generally, the environment of long-term, prolonged joblessness has created an environment where maximum production is squeezed from the fewest workers possible, the Times stated:

Because of high unemployment, management is using its leverage to get more hours out of workers,” said Robert C. Pozen, a senior lecturer at Harvard Business School and the former president of Fidelity Investments. “What’s worrisome is that American business has gotten used to being a lot leaner, and it could take a while before they start hiring again.”

Corporate America’s no-hiring mode continues a long-term trend, as job growth in the U.S. over the last decade has been under 1% compared with gains in of 22% to 38% every decade since 1940.

While corporations individually have discovered how to profit temporarily from vast reductions in their workforces and the biggest wage-slashing spree since the Great Depression, their strategies offer no way out of the Great Recession. As the Times noted, the increasingly leaner and meaner workplace has a downside:

The problem is that companies are not investing those earnings, instead letting cash pile up to levels not reached in nearly half a century.

“As long as corporations are reinvesting, the economy can grow,” said Ethan Harris, chief economist at Bank of America Merrill Lynch.

“But if they’re taking those profits and saving them, rather than buying new equipment, it hurts overall growth. The longer this goes on, the more you worry about income being diverted to a sector that’s not spending.”

The current direction of Corporate America not only prolongs the
recession. It also re-distributes wealth upward—thereby taking away the very spending power from working families that is needed to break out of the recessionary cycle.

At a moment when the richest 1% already hauls in 23.5% of all annual income in the United States, there is little likelihood that the super-rich will be igniting an economic recovery with even more cash on their hands. They are much more likely to simply add to their already-vast savings:

“There’s no question that there is an income shift going on in the economy,” Mr. Harris added. “Companies are squeezing their labor costs to build profits.”
In fact, while wages and salaries have barely budged from recession lows, profits have staged a vigorous recovery, jumping 40 percent between late 2008 and the first quarter of 2010.

About The Author:

Roger Bybee is a Milwaukee-based freelance writer and progressive publicity consultant whose work has appeared in numerous national publications and websites, including Z magazine, Dollars & Sense, Yes!, The Progressive, Multinational Monitor, The American Prospect and Foreign Policy in Focus. Bybee edited The Racine Labor weekly newspaper for 14 years in his hometown of Racine, Wis., where his grandfathers and father were socialist and labor activists. His website can be found here, and his e-mail address is winterbybee@gmail.com.


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REPORT: The Recovery Act, Unsung Hero of the Year

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Image: Kate ThomasMarking the first anniversary of the American Recovery and Reinvestment Act (ARRA), the SEIU is releasing a new report today analyzing the social and economic impact of the Recovery Act. This report explains what the aggregate numbers on economic growth and job creation fail to illustrate–how the Recovery Act helped counter the recession by protecting human services and the workers employed to deliver those services at a local level.

Reporting by state recipients of Recovery Act direct government investment spending demonstrates that this spending has saved or created 1,239,437 jobs in both the public and private sector. When you include the impact of indirect spending–jobs created or saved as a result of the consumer spending of directly funded job holders–the total rises to 1,859,156 jobs that have been saved or created. Pretty amazing. Without it, the unemployment rate in December 2009 may have reached 11.2 percent, 1.2 percent higher than the actual rate of 10.0 percent that month.

How Recovery Act Investments in Human Services Created and Saved Hundreds of Thousands of Jobs
While it would be impossible to describe all of the significant findings of this report in just one blog post, I’ll be doing just that in a series of blog posts at SEIU.orgover the next couple of days. I’ll also be highlighting the stories included in this report–collected from a combination of public sources, government Web sites, and interviews with SEIU state-level leaders–which uniquely illustrate how states and some local units of government have used ARRA resources to limit scaling back.

For workers like Akbar Chatman–a substance abuse counselor for the Department of Mental Health in Los Angeles County–the Recovery Act played a critical role in helping him do his job. Watch:

While conditions are far better than they would have been without the stimulus fund actions that were taken, it is clear that substantial challenges remain. Without additional fiscal relief, new budget gaps could force state governments to shed 900,000 jobs this year.

View the report in full at http://seiu.me/arra

Download the (PDF) report:
“How Recovery Act Investments in Human Services Created and Saved Hundreds of Thousands of Jobs”

*This post originally appeared in SEIU Blog on February 17, 2010. Reprinted with permission.

About the Author: Kate Thomas is a blogger, web producer and new media coordinator at the Service Employees International Union (SEIU), a labor union with 2.1 million members in the healthcare, public and property service sectors. Kate’s passions include the progressive movement, the many wonders of the Internet and her job working for an organization that is helping to improve the lives of workers and fight for meaningful health care and labor law reform. Prior to working at SEIU, Katie worked for the American Medical Student Association (AMSA) as a communications/public relations coordinator and editor of AMSA’s newsletter appearing in The New Physician magazine.


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Will Teacher be Left Behind by the Stimulus Gold Rush?

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To teachers across the country, the carrot that Washington is dangling before schools could soon start to feel like a stick.

As the Obama administration funnels stimulus money into public schools, states will compete for a $4.3 billion fund known as Race to the Top. But the strings attached to the money reflect a vision for school reform that many activists fear will drive the corporatization of education and the marginalization of organized labor.

One key requirement is that states allow teachers to be assessed on the basis of standardized test scores—a policy that could ignite labor disputes over merit pay and raise philosophical questions about how to evaluate educators.

The funding guidelines could endanger some states’ access to the funds, due to “firewall” policies that bar the direct use of test scores in employment-related decisions, such as awarding tenure—a protection against unfair judgment of teachers based on limited data.

The Race to the Top guidelines also prioritize the expansion of charter schools and alternative pathways for teacher certification, like Teach for America’s fast-track program for top-tier college grads. Both have been hyped as a way to bring innovation and “entrepreneurialism” to public schools. But critics view charters and alternative credentialing as steps toward privatization and deregulation, which in turn alienate struggling students and undermines union power.

By tethering stimulus money to controversial policy initiatives, Education Secretary Arne Duncan is stoking tensions between free-market reform principles and unions’ mission to protect their professions and labor standards.

Randi Weingarten, head of the American Federation of Teachers, signaled a willingness to compromise in a recent statement, calling for “shared responsibility” and transparency in reform efforts.

But many cast doubt on the merits of the Duncan brand of reform.

In a new report on efforts to reform teacher pay schemes, the Center for American Progress challenges the common assumption that “compensation is the primary incentive for teachers to perform at higher levels”:

[N]umerous approaches have been punitive or simplistic in design, implementation, or marketing. This is one reason that teachers and unions have frequently opposed efforts to link learning and compensation. Teachers have often seen these efforts as professionally insulting and as misunderstanding what leads to improved performance.

To progressive education activists, the Duncan brand of reform—which was incubated during his tenure as CEO of Chicago Public Schools —embodies the worst aspects of No Child Left Behind.

Though the Bush-era law was billed as a path toward alleviating racial and socioeconomic educational gaps, critics say it has cheated disadvantaged students by emphasizing rigid high-stakes testing regimes rather than genuine intellectual development.

From a labor standpoint, Jim Horn of Schools Matter says the Race to the Top will accelerate the downward spiral in public education:

The winners of the Race to the Top will not be teachers, who will be further humiliated by having meager pay raises to their embarrassingly low salaries now dependent upon test score production work….

Among the winners will not be the embattled teaching profession, since Mr. Duncan prefers the marginally-prepared and the alternatively-certified teachers to those with real credentials based on both content and pedagogy expertise.

While Duncan tries to pull schools and unions toward a hardline “accountability” agenda, there are signs that some educators are bucking mainstream reform trends from the ground up. Teachers at some charter schools are moving to unionize to stabilize their jobs and working conditions.

In Duncan’s former hometown, a crop of radical teachers has risen up against Chicago’s plans to overhaul and shut down under-performing schools. The Caucus of Rank and File Educators (CORE) filed a discrimination lawsuit last month to challenge the city’s school “turnaround” initiative.

CORE alleges that black teachers have been disparately harmed by staff purges, and that the restructuring has disrupted students’ education, with little accountability to parents and surrounding communities.

Amid all the political bluster around “fixing” public schools, the lesson that seems to constantly elude policymakers is a simple one: a classroom is a space for intellectual exploration as well as a workplace, and it works best when it enables students and teachers to thrive together.

In the Obama administration’s race to reform, is there room at the top for the whole school community?

Michelle Chen: Michelle Chen’s work has appeared in Extra!, Legal Affairs, City Limits and Alternet, along with her self-published zine, cain. She also blogs at Racewire.org

This article originally appeared at Working In These Times on July 30 and is reprinted here with permission from the source.


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