And protect unemployed and self-employed Americans.
The Roosevelt Rundown is an email series featuring the Roosevelt Institute’s top stories of the week.
Preserving Payrolls and Supporting Unemployed People
This week’s economic news has been sobering beyond precedent: 10 million Americans filed unemployment claims in the last two weeks alone, and Oxford economists project that 20 million more will do so in the next few weeks. With lives and livelihoods at risk, experts are calling on government to support those both with and without jobs—and Americans agree. “The American public is very concerned that the money [of stimulus relief] be used to support workers, to keep employees on payroll and that it not be used for things like stock buybacks or excessive CEO pay,” Roosevelt President & CEO Felicia Wong told Hill.TV this week.
- The coronavirus economic crisis: “Fundamentally, this needs to be a government solution. Individual acts of charity or trying to keep the economy afloat are not sufficient at this moment,” Roosevelt Director of Progressive Thought Mike Konczal tells Vox in a new explainer. “The recession is ultimately a collective problem, and the government will be the one who determines what happens to small business, self-employed people, and so on down the line.” As Roosevelt Fellow Darrick Hamilton adds, this unprecedented economic shock will disproportionately harm workers of color: “We know that Black, Latinx, and Native people . . . have lower levels of reserves, and we also know that their employment is more precarious than that of white people.” Read on.
- Another angle: “This dramatic spike in jobless claims is an American peculiarity. In almost no other country are jobs being destroyed so fast. Why? Because throughout the world, governments are protecting employment,” University of California, Berkeley economists Emmanuel Saez and Gabriel Zucman write in a New York Times op-ed. “. . . government should pay not only wages of idled workers, but also essential business maintenance costs, like rents, utilities, interest on debt, health insurance premiums, and other costs that are vital for the survival of businesses in locked down sectors.”
- Moving forward: The CARES Act passed by Congress last week is an essential, if imperfect, leap forward. It’s also a springboard for policymakers to invest more in worker and health care security in future relief packages. Citing recent polling, Wong argues for the blog that “the popular support is there for building on the momentum of the CARES Act to create a more resilient economy for all.” Read more.
Ending Shareholder Primacy Once and for All
Senate Majority Leader Mitch McConnell (R-KY) describes the CARES Act as a “wartime level of investment into our nation.” In a new paper, Roosevelt Fellow J.W. Mason looks to the economic mobilization policies of World War II and makes the case that government can—and should—be doing more in times like these. “Problems like the climate crisis and future pandemics will involve an economic restructuring comparable in scale, if not speed, to the mobilization of World War II,” Mason writes. “. . . when thinking about the role of the public sector in fostering investment in new industries or technologies, we should not think of it as merely providing resources. Additionally, and even more critically, its role is to bear risk and to solve coordination problems, both of which it can do in a way that private businesses cannot.” Read more.
- An unequal playing field: “For the bigger players, it will be easier to go back to business as normal of late last year,” Mike Konzcal tells HuffPost. “This could present a perfect opportunity for big businesses to swoop in and consolidate their market power since even the small businesses that survive a recession are likely to come out of it with considerable debt.”
The Double Wage Gap and the Bottom Line
“As the American economy currently grapples with the onslaught of the coronavirus, the main work-related challenges currently confronting Black women are reductions in work hours or job loss. But if and when the US economy recovers, African American women will once again face the double gap,” Michelle Holder (assistant professor of economics at John Jay College, City University of New York) writes in a new Roosevelt report about the confluence of race and gender income gaps. Based on three quantitative methodologies, Holder estimates that Black women lost approximately $50 billion in involuntarily forfeited wages in the US in 2017 alone—systemic undercompensation with generational consequences for wealth-building in the Black community. Read more.
- Why this matters: “Like most of our problems today, the double gap is a structural issue that requires a rebalance of power,” Roosevelt Managing Director of Communications Kendra Bozarth writes for the blog. “Expecting US companies to pay workers, especially Black women, what they’re worth ignores the reality of who our economy is working for and who it is working against. Until Black women are made whole, none of us are.” Read on.
Rewriting the Rules—During the Pandemic and Beyond
Roosevelt is covering all angles of the coronavirus economic crisis and response efforts in a new blog series:
- “COVID-19 and the Economy: Industrial Planning and Policy in This Moment” by Roosevelt Director of Governance Studies Todd Tucker and Director of Advocacy and Policy Michelle Sternthal;
- “A Generational Crisis: Restructuring America’s Social Insurance System to Better Protect Young People” by Suzanne Kahn, deputy director of the Great Democracy Initiative and a Roosevelt education expert;
- “The Lost Opportunity in Buyback Spending” by Lenore Palladino;
- “Seeds of Progressive Change: Rethinking Our Market-Based Medicines System” by Roosevelt Vice President for Advocacy and Policy Steph Sterling and Director of Advocacy and Policy Katy Milani; and
- “We Need to Protect Abortion Access Now More Than Ever” by Roosevelt Director for Health Equity Andrea Flynn and Roosevelt Network National Director Katie Kirchner.
What We’re Reading
The Four Rules of Pandemic Economics – The Atlantic
Unsanitized: A Crisis to End All Crises – American Prospect
Pandemic’s New Victim? Free College – Inside Higher Ed
We Can Finally See the Real Source of Washington Gridlock – The Atlantic
Trump Is Failing at Wartime Leadership – Washington Post