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COVID ECON 101

Stimulus packages aren’t enough to recover from the Covid-19 economy

Reuters/Nick Oxford
Filing for unemployment is the trending job in the Covid-19 economy.
  • Leo Hindery, Jr.
By Leo Hindery, Jr.

Co-chair, Task Force on Job Creation

Published

With the Covid-19 pandemic raging on, the US economy is in freefall. There seems to be no telling when American life will return to normal, or what that new normal will be. But it’s already clear that making communities whole again once the virus is under control will be an enormous challenge, the likes of which our nation has not faced since the aftermath of the Great Depression.

It’s easy, however, to predict what US president Donald Trump will promise: that the recovery will be swift and robust, and that all losses will be reversed. In fact, he’s already saying as much. Once the virus is behind us, Trump said at a recent press conference, the economy is “going to pop back like nobody’s ever seen before.”

Teachers and nurses should not have to worry about how they are going to pay an unexpected $500 bill.

But tell that to the retail worker who lost her job and soon will be months behind on her rent payments. Tell that to the hotel cook who’d been supporting his family paycheck to paycheck with no financial cushion. Tell that to the small business owner whose company was forced to shutter. They, like too many Americans, would beg to differ. American lives have been turned upside down in every way. Empty promises, self-serving platitudes, and magical thinking will no longer suffice. It’s time for a clear, strong, long-term plan for how our country will rebuild. If we honestly recognize that we are facing enormous challenges in the months and years ahead, and if we plan now and implement measures to reach our goals, we can emerge stronger than ever.

Congress has taken important emergency measures to address the devastating impacts of Covid-19 on our healthcare system and on our economy in the form of a three-phase legislative package that includes an $8.3 billion spending bill, a $100 billion paid-leave bill, and stimulus checks and guaranteed loans to small businesses.

While these relief packages were and are critical, there must also be a comprehensive long-term national strategy for getting the economy back on track. That strategy should also focus on three areas.

First, we need to bolster and empower the middle class—the heartbeat of the American Dream – by better supporting unions. On case in point for the problem with the status quo is the apparent firing of an Amazon warehouse worker who led a walkout over the safety conditions at the company’s Staten Island warehouse after cases of Covid-19 were confirmed.

This is yet another example of how the decimation of our country’s unions has stripped workers of critical protections. That worker should not have been fired for standing up for himself and his co-workers. He should instead be applauded for potentially saving the lives of the people working in the warehouse.

Second, we must invest in education and skills training to better empower America’s middle class who will always be the driving force of our economy. Teachers and nurses should not have to worry about how they are going to pay an unexpected $500 bill. Permanently providing federal income tax relief to teachers, expanding STEM education, and affording professional development resources are critical to restoring America’s human capital.

And lastly, instead of defunding or altogether quashing social service programs like Social Security and retirement security which have been in place and have helped the elderly and low-income Americans for generations, lawmakers must help keep these programs solvent by eliminating the cap on wages subject to Social Security payroll taxes.

Like it or not, we’ve come to the end of an era. But we are facing not just a new era, but a whole new reality. We don’t yet know what that full reality will be, and there’s no doubt that going into the unknown is a frightening prospect.

Make no mistake: Short-term relief packages are critical, and Congress should continue to act in real-time to alleviate the economic pain being felt throughout the country. But policymakers must also be thinking long and hard about the months ahead. We must seize the opportunity to finally address fundamental vulnerabilities of our economy.

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