Fourteen million Americans who lost their jobs at the beginning of the pandemic are still relying on some form of federal unemployment aid to feed their families and pay for housing.
The end to the COVID-19 medical emergency may be within sight, but the economic and social crisis will last far longer and require far more effort to resolve.
The Coronavirus Recession was unique in many ways and for many reasons, but its most insidious aspect is the exacerbation of pre-existing economic disparities. For more affluent Americans, the virus simply forced us to work from home. For the rest, it destroyed careers and health.
The challenge for political leaders will be convincing those who barely felt any financial impact that they should assist those who suffered.
TOMLINSON’S TAKE: Income inequality growing faster than ever due to COVID
The pandemic accelerated existing workforce trends, with employers replacing low-skill workers with automation or offshoring. The slow phase-out of entry-level positions can be subtle.
Consider the restaurant cashier. Taco Bell and other chains were installing kiosks where customers could place orders and pay using touch screens long before the pandemic. Today, we can order and pay for meals with our phones, allowing restaurants to cut down on front-of-house staff.
On the other hand, the pandemic has accelerated the creation of new kinds of low-skilled jobs, which are moving the working class in the wrong direction.
A fast-food cashier was at least an employee. Gig economy jobs, such as delivery drivers, turn vulnerable hourly-laborers into independent contractors with no benefits or advancement opportunities.
Uber, Lyft and other gig workers organized in California and convinced the state assembly to force big firms to treat them as employees. But the tech empires struck back by convincing California voters to deny low-skilled workers even essential benefits like a minimum wage.
Americans love free or cheap delivery and taxi service, but apparently, they do not respect the drivers.
The billionaires who depend on gig workers argue the jobs they offer are only stepping stones or moonlighting jobs for folks to make a little extra money. No one should want to make a career delivering groceries, they say. Fair point, if workers indeed had other options.
The pathway to good-paying jobs is education. American companies have millions of positions they cannot fill because there are not enough qualified applicants. But with states and school districts suffering financial losses due to the pandemic, the quality of public education is dropping quickly.
School districts have struggled to provide quality remote instruction, and student failure rates are rising. Statewide, Texas districts have also seen a dramatic drop in attendance statewide, and as a result will likely see less funding next year under state school finance rules.
Matriculating struggling students from underfunded schools is not the best way to fill seats in Texas’ cash-strapped public universities, which are also suffering from COVID-19’s side effects. And none of this helps meet Texas’s goal of developing a 21st-century workforce.
State lawmakers convening in Austin in a few days will need to address education funding at every level, including adult learning, to get the unemployed back to work. They will also require federal help because state coffers are emptying, and unlike Congress, the Texas Legislature must balance its budget.
The best way to speed the economic recovery is to help people fill good-paying jobs. The chronically unemployed are a burden on their families’ disposable income and our health care system. They are also a drag on national worker productivity and, therefore, economic growth.
The Great Recession experience also shows that while unemployed people want to work, they will reject lousy jobs and bad pay.
TOMLINSON’S TAKE: Heedless COVID spreaders take toll on lives and the economy
Following the Great Recession, millions of Americans dropped out of the workforce, driving down an economic indicator known as the labor participation rate. Many of the unemployed chose to stay at home even though there were a plethora of unpleasant jobs offering subsistence wages. Imagine that?
The Great Recession’s low labor participation rate was one reason for the slow economic recovery. When wages finally rose in 2018 and 2019, millions of Americans rejoined the workforce, and the participation rate began rising.
State spending on roads, education and health care could leverage federal dollars to create jobs and encourage workers to retrain for better-paying careers. Congress could raise the minimum wage to inflation-adjusted norms to encourage people to rejoin the workforce.
Most importantly, elected officials need to recognize that the workers who lost their jobs due to the pandemic deserve a helping hand as much as small businesses. The American worker and consumer are the same, and their prosperity is key to healthy growth.
Tomlinson writes commentary about business, economics and policy.