Workers deemed essential in the pandemic, such as grocery store clerks and transit workers, deserve an income boost, Democrats say.
Senate Democrats in early April proposed a Heroes Fund to provide a pay raise through the end of the year of $13 per hour for essential workers earning less than $200,000 yearly. The maximum payment would be capped at $25,000, while higher-income earners would receive an additional $5,000. The plan also provides a $15,000 incentive for people to join the medical workforce.
“I think there’s a very clear case to ensure that, particularly for the workers who are risking their lives in really serious ways who are not making even a living wage, let alone median wage,” said Molly Kinder, a Brookings Institution fellow in the Metropolitan Policy Program. “I believe there are grounds to ensure they get a boost, so they’re not risking their lives for $9 an hour.”
The Democrats’ plan would offer the most pay increase to the lowest earners and less to high-income earners. For instance, the policy would double the pay of a low-wage earner making $13 an hour. A mail carrier may get a 25% pay increase, and a physician earning a high yearly salary would not qualify.
More workers realize their health is at risk just by reporting to their jobs. Offering employees a pay increase for working through the coronavirus pandemic could make them more willing to go to work every day.
The Heroes Fund could be prohibitively expensive, though. Conservative think tank the American Action Forum estimated that a $13 pay rise through December could cost nearly $400 billion. Ben Gitis, a senior economic policy analyst at the Bipartisan Policy Center, said enacting a fiscal policy such as the Heroes Fund would hinge on narrowing down the pool of people eligible for financial assistance and “how you define who is an essential worker.”
A hazard pay plan that both parties agree on, Gitis said, should be targeted at stopping the U.S. economy in a downward spiral and temporary, so that, once the crisis passes, the labor force has not been permanently disrupted.
“Of course, we want to take care of these workers who are putting themselves at risk throughout this crisis. I think it also makes economic sense to make sure they’re well compensated,” Gitis said. “Compensation is going to be key to making sure that we maintain that workforce.”
Without increasing compensation, employers run the risk of losing employees, who may be enticed by the promise of the $600 boost to unemployment insurance enacted by Congress. Republican Sens. Ben Sasse, Lindsey Graham, and Tim Scott criticized the policy before Trump signed the $2.2 trillion stimulus package that augmented unemployment insurance in March. Economists and Democrats reasoned, though, that unemployment insurance is progressive and decided by states, so low earners may not receive sufficient help through unemployment benefits alone.
Some employers, such as Kroger, Giant, and Safeway grocery stores, will offer workers hazard pay through the end of May, but workers for some of the largest employers in the United States have to advocate for themselves. For example, Whole Worker, a grassroots group created by employees of Amazon-owned Whole Foods, is organizing strikes all over the country unless they’re offered hazard pay and demanding that a store be shut down as soon as an employee tests positive for the coronavirus.
“Jeff Bezos makes around $200 million a day, and we get a $10 discount for risking our lives,” one Whole Worker wrote. “I don’t think you’re on the same ‘team’ as us Bezos because our team is the working class.”
About 65% of businesses have decided not to offer hazard pay to employees but instead will offer day care services, meals, and other perks. About 9% of organizations have nothing planned for employees at all, according to the human resources association WorldatWork.
Employers will eventually have to offer their workers an incentive to stay at work and keep the business running as the pandemic persists, Gitis said.
“I think it’s important to keep in mind that, the longer this crisis goes on, the more that this really will become predictable. And employers will compensate accordingly,” Gitis said.
A wave of deaths due to COVID-19 has left the labor market in flux and essential workers nervous about working and possibly becoming vulnerable to infection. Recently released plans by governors in southern states to reopen their economies could disrupt workers’ efforts to be granted hazard pay if they are made to return to work as if the pandemic had passed.
A good compromise for employers and employees to strike would be to make pay rises temporary, as the Heroes Fund proposes, and as several grocery store chains have done.
“This could be time-limited,” Molly Kinder said. “The eligibility could be set in such a way that really prioritizes those whose lives are most at risk.”
