Coronavirus and the U.S. economy

Coronavirus and the U.S. economy

The COVID-19 pandemic – and the “social distancing” it has prompted – will almost certainly plunge the United States into an economic recession. Low-wage workers will be among the hardest hit, as restaurants, hotels and retail stores lose business. State governments will suffer as well, because slower economic activity means less tax revenue, which in turn leads to budget cuts. Josh Bivens of the Economic Policy Institute says that means the federal government must step in to ensure struggling families have the resources they need: 

The first two characteristics of a potential COVID-19 slowdown—that it could come fast and come straight for low-wage workers first—suggest one potential response: rapid direct payments to individuals. … Jason Furman, chief economic adviser in the Obama administration, has recommended they be $1,000 for each individual and $500 per child. This seems like a good number to start. The payments should be 100% refundable—they should not be reduced at all for workers and families without income tax liability. They could be increased for lower-income households by starting at $2,000 per individual and $1,000 per child and phase out as incomes rise.


Court blocks harsh SNAP rule
A judge on Friday blocked a new federal rule that would have taken away SNAP benefits from more than 700,000 American adults, calling the move by President Donald Trump’s administration arbitrary, capricious and likely unlawful. As NPR’s Maria Godoy reports, the rule was set to take effect April 1 and would have taken away food benefits from “able-bodied” childless adults who failed to document at least 80 hours of work or volunteer activity each month. 

In her ruling, (U.S. District Court Judge Beryl) Howell cited concerns raised by the spread of coronavirus and its effect on the most vulnerable Americans. “Especially now, as a global pandemic poses widespread health risks, guaranteeing that government officials at both the federal and state levels have flexibility to address the nutritional needs of residents and ensure their well-being through programs like SNAP, is essential,” she wrote.

Closer to home, schools in East Baton Rouge Parish moved quickly to ensure that kids will still have access to food during the 30-day school closure ordered by Gov. John Bel Edwards. The Advocate’s Charless Lussier reports

While they’ll have fewer meals, the limited meal program, akin to the summer meals that some schools provide during summer breaks, will be open to more children than normal. Thanks to waivers the state obtained over the weekend, all children 18 and younger, no matter their family income or what school they attend now, will be able to get a meal if they visit one of the school meal sites.


The fine print of the coronavirus bill
The U.S. House of Representatives, moving with rare alacrity, passed emergency legislation last week to deal with the economic fallout from the COVID-19 pandemic. While the bill was touted for providing paid sick leave to stricken workers who need it, The New York Times editorial board reports that it came with a giant loophole carved out by corporate lobbyists. 

The first draft of the coronavirus legislation included a permanent change requiring employers to allow every worker to earn up to seven days of paid sick leave, and a temporary change allowing any worker to take up to 10 days of sick leave during a public health emergency. The final draft includes only a pale shadow of those sensible requirements. The paid sick leave requirement is narrowly focused on the coronavirus; it does not even require paid sick leave during future pandemics — a contemptible signal that political leaders are already committed to not learning the lessons of this one.


Expanding vote-by-mail
The COVID-19 pandemic has shined a new spotlight on the way Louisiana conducts elections, as Gov. John Bel Edwards and Secretary of State Kyle Ardoin have pushed the state’s presidential primary from April 4 to June 20. Legislation filed by rookie Rep. Mandie Landry of New Orleans would make it easier for people to vote absentee by mail, by allowing anyone to do so without providing a specific reason. WAFB-TV’s Matt Houston explains

“If we are having an election and there’s an outbreak, you want people to stay home,” Rep. Mandie Landry, D-New Orleans, said. “You don’t want people to go to a germy poll location where everyone is touching the same machine and everyone is in the same place. Vote-by-mail would allow people to stay home.” Landry says her bill could be classified as emergency legislation, allowing it to be approved through an expedited legislative process. Even then, Ardoin says the state would not have enough time to implement any potential changes before the postponed spring elections.


Note: The Louisiana Budget Project has joined with more than two dozen advocacy organizations in calling for the Louisiana Legislature to suspend its session until at least April 15 to safeguard public health during the COVID-19 pandemic. 


Number of the Day
$0.10 – Tax revenue generated for the state for every $1 Louisiana spends on the Quality Jobs tax incentive program, under a “best-case” scenario. In the worst case scenario, the state’s return on investment is 1 cent for every dollar (Source: Louisiana Legislative Auditor)