The racial divide exposed by COVID-19

The racial divide exposed by COVID-19

Black and Hispanic people in Louisiana have been hit the hardest by the Covid-19 crisis. They are more likely to work in front-line industries such as childcare and retail sales, where infections are most prevalent. They also are more likely to have been laid off during the current recession. Black Louisianans make up 30% of Louisiana’s workforce, but accounted for 40% of unemployment claims in Louisiana from mid-March through mid-April. LBP policy analyst Neva Butkus has more:

As Louisiana policymakers debate how to allocate federal recovery dollars, their top priority should be the workers who’ve been most affected. Instead of putting businesses at the front of the line for grants, the Legislature should make sure that the front-line workers who face the greatest risks are rewarded for their efforts. Instead of considering millions of dollars in corporate tax breaks, legislators should be incentivizing high-wage jobs that can help reduce the economic disparities that have held Louisiana back for far too long.

 

Businesses and workers compete for grants
Gov. John Bel Edwards signed legislation this week that spends $300 million in federal Covid-19 relief dollars on grants to small businesses. The money was redirected from $811 million that the governor had originally set aside to reimburse cities, parishes and other local governments for virus-related costs. The Baton Rouge Business Report’s Stephanie Riegal writes that Treasurer John Schroder expects a lot of interest:  

Schroder, who says his office has spent nearly two weeks preparing to administer the program, suspects the numbers of applicants will be significant. “We’ve been trying to get an idea of what kind of numbers we’re talking about,” he says. “We know there are around 400,000 businesses in Louisiana and fewer than 70,000 received money from the PPP, so we know a lot of people are hurting.” 

Meanwhile, some front-line workers would receive one-time “hazard pay” stimulus payments of $250 under legislation that began moving through the Legislature this week. The program would be capped at $50 million, and the money would be taken from the same CARES Act funding pool that was used to create the business grant program. The AP’s Melinda Deslatte reports that the bill is part of ongoing negotiations that also involve Republican-backed bills to cut taxes for corporations: 

The $250 payments would be available to workers with an adjusted gross income on their 2019 tax return of $50,000 or less and who had to report to a job outside of their home for at least 200 hours from March 22 through May 14. They would have to hold one of the long list of jobs considered “essential critical infrastructure” under the bill.

Reality check: As things currently stand, front-line workers would get $1 for every $6 in grants that go to corporations, with all of the stimulus money coming from one-time federal funding. Tax cuts, by contrast, are permanent and would reduce state revenues that could otherwise be invested in education, training or healthcare programs. Trading a permanent tax break for a one-time payment of federal funds would be a fool’s errand.


Corporations benefit from Covid-19 tax breaks
Language tucked into the federal stimulus bills is allowing big corporations to pocket billions of dollars in new, multi-year tax breaks. As Axios’s Bob Herman reports, companies are benefiting from changes that make it easier for companies to deduct operating losses, deduct interest expenses and subsidize payroll costs: 

Together, companies will reap more than $155 billion from these three provisions this year and in 2021, according to estimates from the Joint Committee on Taxation.

 

Cash bail system put Black Americans at risk
At any given time, about half a million people are locked up in America’s jails. The vast majority of them have not been convicted of a crime, and are there awaiting trial. About 90% of these detainees are there for the simple reason that they can’t afford bail. Arnav Shah and Shanoor Seervai with The Commonwealth Fund report on a cash bail system that disproportionately affects Black Americans: 

The pretrial population is disproportionately Black and Hispanic and has more than doubled over the past 15 years.1 Black and Hispanic Americans are more likely to be stopped by the police and experience police violence at the time of arrest; they also are more likely to be poor and unable to raise bail funds. The cash bail system also compounds underlying health disparities in access to care that has led to worse outcomes for Blacks and Hispanics compared to white Americans. Keeping people in jail if they cannot afford cash bail is bad for their health. A well-documented body of research describes the negative health outcomes associated with and amplified by incarceration. This includes higher rates of HIV, hepatitis C, and tuberculosis

 

Number of the Day
$24 Million – The amount that will be refunded to students from Louisiana universities and colleges due to the coronavirus interrupting the academic year.  (Source: The Advocate)