Good policy choices drive down poverty. We have to keep moving forward on that
So what can the plight of a little cafe tell you about the state of the American economy and the changing face of work? A lot, as it turns out.
The other week, the bistro where my family and I have been grabbing brunch every Sunday since the start of the pandemic announced that it would be shuttering on weekends and shifting to a more limited, weekday schedule.
The reason was a familiar one: The owner couldn’t find the staff they needed to both function effectively and to keep themselves and their current staff from being ground into dust from the punishing pace.
The news was heartbreaking, if entirely unsurprising. Employers across the nation are struggling with a labor shortage so profound that one Alabama pizzeria vowed to hire “literally anyone” just to keep the doors open, Business Insider reported last week.
Business leaders have falsely blamed the crisis on generous pandemic unemployment benefits, arguing that they’re a disincentive to return to the labor force. Study after study has proven this is not the case. Instead, more seismic forces are at work.
In April of this year, a staggering 4 million people quit their jobs, in a phenomenon that’s come to be called “The Great Resignation,” Vox reported.
It’s not that people don’t want to work, but rather it’s that, after an earth-shattering 16 months that have seen hundreds of thousands of our family members, friends, and neighbors die at the hands of an implacable and indiscriminate foe, there’s just a genuine question of whether grinding it out for 4o hours a week at a job with substandard pay, few benefits and little work-home balance is really worth it.
Increasingly, the answer is a resounding “No.”
Hospitality and leisure workers, who staff restaurants, bars and hotels, and who had to bear the brunt of pandemic-induced rage for low wages and little dignity, are leading that exodus, NPR reported. In April, the sector lost more than 740,000 people.
In the midst of the pandemic, workers across industries discovered something. When they weren’t tethered to desks or jobs, there was time for something miraculous: Family and community, the hobby they’d been putting off learning, the time to retrain and search for new, and more fulfilling, work.
Admittedly, not everyone had this luxury. Working parents had to scramble to find child care or balance the demands of remote work against acting as their children’s homeroom teacher. The shift was particularly hard for low-income workers. Frontline workers didn’t have the luxury of stepping back at all.
Even so, “We have changed. Work has changed. The way we think about time and space has changed,” Harvard Business School professor Tsedal Neeley told NPR. Having been given time and space and flexibility by the pandemic, workers now crave and demand it, she told NPR.
And then, something else happened, because of unprecedented, direct payments from the federal government — as much as $3,200 each — the number of Americans in poverty began to fall, according to Vox, from 12.8% in 2018 to 8.5%. That’s based on projections that researchers at Columbia University made in March.
Separate research by the Urban Institute, also cited by Vox, projected that 2021 poverty will be about 7%, nearly cutting the 2018 rate in half.
The Biden White House’s child tax credit program, monthly payments of $250 to thousands of American families, is similarly expected to lift millions of children out of poverty, the Guardian, and other outlets have reported.
Republicans argue against such largess, saying it perpetuates the welfare state. But it is hard to deny the bottom line reality: When you give people money, they are less poor, happier and more likely to inject that money back into the economy. In fact, economists expect economic growth of about 7% this year, and 4.9% in 2022, fueled by the stimulus and vaccines, Reuters reported.
Good policy choices drive down poverty. And American workers, by now accustomed to the flexibility of the pandemic economy, and the regular flow of stimulus checks, are unlikely to want to backtrack on that.
But it can’t end there. To help both employers and workers, Washington, Harrisburg and Raleigh need to step up and do a couple of things.
One of them is finally making the wealthiest Americans, who grew even richer during the pandemic, pay their fair share. Earlier this week, new research by a coalition of Pennsylvania advocates showed that that if a wealth tax proposed by U.S. Sen. Elizabeth Warren, D-Mass., had been in effect in 2020, “the nation’s billionaires alone would have paid $114 billion for that year—and would pay an estimated combined total of $1.4 trillion over 10 years.”
That would pay for roughly half the $3.5 trillion budget resolution backed by the Biden administration that would dramatically remake the post-pandemic economy.
We also need to stop tying health coverage and other benefits to employment. The U.S. stands nearly alone in tying health coverage and other key benefits to work.
In Pennsylvania (and North Carolina), lawmakers need to finally raise their states’ minimum wages from $7.25 an hour, where they’ve sat for more than a decade, to $15 an hour. They also need to crack the piggy bank on the billions in federal stimulus money they’ve locked away for no good reason. Doing that would pay for child care and a host of other programs that would enable thousands to return to work in a sustainable and healthy way.
The pandemic proved that everything we know about work is wrong. And there’s no stepping back from it now.
John Micek is the editor-in-chief of the Pennsylvania Capital-Star, which first published this essay.