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Trump is offering big business billions of dollars as the pandemic spreads, and almost nothing for their stranded employees. But real protection for workers has to be much more than a $1000 check.
Story Transcript
This is a rush transcript and may contain errors. It will be updated.
Marc Steiner: Welcome to The Real News. I’m Marc Steiner, good to have you all with us. Donald Trump, with Congress’ acquiescence, wants to send every family in America $1000, while banks, oil companies and other large businesses, are given millions with no strings attached. The poorest workers in our country, like in the service industry, living paycheck to paycheck, and companies are now denying workers unemployment, shutting down their healthcare. The Guardian quoted Moody’s Analytics today in a report saying 80 million workers could lose their jobs and benefits. That’s more than half of all the workers in our country. Why are we trimming around the edges? Why are Democrats going along with this? What should we really be doing? We’re joined now by Dr. William Spriggs. He’s a professor and former chair of the Department of Economics at the Howard University, and serves as the chief economist at the AFL-CIO. And welcome back, good to have you with us Dr. Spriggs.
William Spriggs: Thank you for having me, I’m glad to be here.
Marc Steiner: So, let’s begin at the top here. When you look at the response that Congress has made and Trump has made, a lot of folks think this is pretty inadequate, especially when it comes to $1000 per worker, per family. That barely covers groceries for two weeks for most people. We’re talking about people who are losing their pay checks, and they live paycheck to paycheck. Some are losing their healthcare benefits, and if Moody’s is right, this could be a huge crisis if 80 million workers actually lose their jobs. Right now we’re seeing in Seattle, they’re saying that 400,000 workers could lose their jobs in Seattle alone, and they’re two weeks ahead of us. So, talk a bit about what you think’s happening, and whether you think the response is adequate.
William Spriggs: So, I think we have to back up. It’s unfortunate during the H1N1 crisis in 2009, we didn’t put in place paid sick leave, and didn’t put in place unemployment insurance to capture the problem we knew we faced then. We knew we would face it again, and here we are, totally unprepared. Had we had policies in place, it would have been easier to have started this earlier with certainty for everyone how it would play out. Now, we’re trying to play catch up. Here’s the big problem. For the workers who are affected, they’re going to lose huge amounts of money. $1000 simply does not begin to make up for what they’re about to lose.
But this is not a problem of aggregate demand simply shrinking. Yes, aggregate demand is falling, but it’s falling in very specific sectors because we’re trying to be safe and avoid the virus. So, we know we’re avoiding restaurants, movie theaters, going to malls, any large gathering. If I give you $1000, you’re still not going to go to a mall. You’re still not going to go to a bar. You’re still not going to go to a hotel or fly. So, we should not fool ourselves that this is a normal recession, and I’m trying to make up for that demand by simply giving people money so they can spend it. And in fact, you could make things much worse because what people are going to do is use the money to consume substitutes for the things they can’t do. So, you can’t go to the mall. That means you go on to Amazon. You can’t go to the gym, you buy an exercise bike. You can no longer go to the coffee shop, so you buy a more expensive, upgraded coffee machine.
So, coming out of this, if you made that investment in a better coffee machine, exercise equipment, a better TV, you’re not going back to the movies, the gym or the coffee shop. Companies that are making investments understanding that their infrastructure wasn’t adequate for online meeting, they’re buying more Zoom licenses, they’re upgrading their own equipment. Well, those companies, sooner or later, after 12 months or 12 weeks of not traveling, are going to say, “Why were we traveling before? Couldn’t we save money by doing this on Zoom? Do you really need to travel?” So, a danger of simply increasing demand as a response is that you could have this perverse, making situations worse for the companies that are going to be most affected, without having compensated the workers adequately for their lost income.
So, that’s the danger here. And the other danger becomes to encourage firms to retain their workers has to be the number one objective. If firms separate from their workers, and we know this from natural disasters where this has happened, then when the disaster is abated and we’ve got the flood waters down and the streets are clean and people are coming back, how do those companies relocate their workers? How do they recruit? How do they get training in place so they can go back up to speed? And that’s what we don’t want to have happen here, because if those workers aren’t continually attached to their firm, coming out of this, there’s going to be all the frictions we know are in our labor market and we’re not good at in the United States that are going to prolong unemployment periods.
Marc Steiner: So, I wanted to kind of talk a bit about what’s happening at the moment and what the responses are from this government at the moment. It seems to me, as I was talking about earlier, that long term, this could be a continuing disaster, and I think the points you’re raising are very critical and clear. At the moment, we’re facing this coronavirus and people not working. If you look out my window right here, there’s nobody in the streets. Nothing is happening. People are locked down, and understandably so. This is a very potentially dangerous virus. But it seems the response from our government is, in itself, inadequate at this moment, just to have people survive this moment.
That is something that I think that some of the major media are kind of missing in terms of the effect of what these trillions of dollars the government says it’s putting out, they’re mostly going to large corporations. They’re not going to working families that are trying to survive and get through this. And when you look at the numbers of people in the service industry, those people living paycheck to paycheck. We heard that Marriott was denying some workers benefits when they went to get their unemployment benefits, coming off health insurance. These things of immediacy that could have a huge effect. What should be the political response and the response from unions and others to what’s happening at the moment?
William Spriggs: So, there are two problems at the same time. I think, again, we’re looking at this through the wrong lens. Economists have a hammer. They see demand fall, they want to increase demand. That’s not what’s happening here. If the government ask a business for public interest needs, that should be viewed as the same, if the government says, “Want to build a highway through the street, I want to go through your business.” We know, under law, the government would have to declare eminent domain and compensate me. The same thing holds here. If the mayor says, “I need you to shut down,” then the mayor needs to say, “What I really mean is I’m going to buy out your restaurant. And so, your workers will stay, you will stay, and we’re all going to be healthier because of this, and we need to have this happen.” The federal government needs to say to that mayor, “I know that you’re losing sales tax revenue vital for your city, and I’m going to compensate you for that.”
So, we keep people whole through this, and it’s important that we have the workers who are directly affected not have their anxiety level go up. And that’s what happening right now, because if you’re one of those workers, your anxiety’s through the roof. Here’s the other problem. So, there’s the issue of the workers being connected, and the compensation for the workers and for the business, but then, you’ve got to think through, why didn’t we have paid sick days anyway? Why didn’t we have an unemployment insurance system that was better prepared anyway?
There are 12.4 million Americans, roughly speaking, who are in food service and drinking establishments. 12.4 million. That’s the size of our manufacturing workforce, roughly speaking. It’s a little bit bigger than manufacturing, but only a little bit bigger, it’s like 400,000 more people. So, it’s roughly the same size. So, [inaudible 00:10:09] all American manufacturers shut down. That’s equivalent to what’s happening here. So, this is not a small sector. If even one-fourth of those workers lose their jobs, and that’s a very generous thing to say, it’s only going to be one-fourth, that’s three million workers who just this week stopped getting a pay check. So, the size of this is very large. The vision that’s necessary here needs to be equally as large. And so, we have to keep it centered on the workers and the workforce.
The other way that we like to look at it in the labor movement is, we have been making a case about just transition as part of a global Green Deal. We know that we have to get greenhouses emissions down or human beings won’t survive. We know that. But we know that you can’t just say to a bunch of workers, “You take the sacrifice.” You have to tell them, well, what are you going to do about it? How are we going to be fair about this? That’s the same situation here. We’re asking a sector to take a big hit. People in entertainment, people who do travel, people who have public-facing service industries, we’re taking you out because this is for everyone’s safety, and for the nation’s economy to even survive, for us to survive. Good, fine. Let’s do that. But let’s be fair about it. And so, those same principles of a just transition have to apply in this case.
If we do it properly, then coming out of this, those companies will be ready to operate the moment we’re safe again. Their workers will be in place, and those workers will be whole without huge levels of anxiety. Many of them do not have health insurance. And so, we have to deal with that problem. And our normal unemployment insurance system, last year in the United States, fewer than 17% of unemployed workers got unemployment insurance. If you were in leisure and hospitality, the industry we’re talking about, accommodations, food service and drinking establishment, those people had only 8% getting unemployment insurance if they were unemployed. So, the system was broken coming into this.
And so leaving this, we shouldn’t leave with a broken system. We should leave better prepared to handle the next time this happens, and in a global world, we should be assured it will happen again. You had the H1N1 in 2009. Here we are 11 years later, another bug. So, anybody that thinks, “Oh, this isn’t going to happen again,” it’s going to happen again. You have to have things in place.
Marc Steiner: So, before we conclude, I’m really interested in what you think, how Democrats and others should be responding to what we’re doing now. I said in the beginning here, it appears that to get this bill through, to get these bills through Congress at the moment, that many people have acquiesced to say, “Okay, we’re just going to send $1000, and with all these millions of billions of dollars into these companies,” large companies, fossil fuel industry and auto and other places. “And we’re not going to take care of the workers or what could happen next.” So, what do you think, in short, should be implemented now, at this moment, to ensure that people get through and to ensure that when we come out of this, that we’re moving ahead?
William Spriggs: Every dollar that goes to a business has to go with a directive that it must, the company must retain its existing workers and it must be using the money to retain them, pay them, make sure that they have benefits, and make sure that they’re going to have sick days and health coverage. That’s how the money has to be attached. We gave money to the airline industry after 9/11, back in 2001, and the rest of us saw what happened. They got the bailout money, and instead of saying to workers, “We got this money, we’re going to keep you whole,” they asked the unions for concessions, which the unions gave them, so that the companies could survive. The companies turned around and declared bankruptcy anyway, took away pension funds. The point of them going bankrupt was so that they could take away the pension funds of those workers.
it is only now, it’s only now, 20 years later, that flight attendants, airline pilots, are getting the pay they had in 2000. And the workers who are the caterers and the janitors who come in and clean the planes, who provide the food, they’re still waiting to get back to 2000. The concessions that workers gave them to succeed, the tax cut that these corporations got just two years ago, they spent it on boosting their stock prices. They didn’t give raises to their workers. They didn’t invest in themselves, and now they want a bailout. The bailout must be conditioned absolutely on, this is not for stock buy backs. You may not declare bankruptcy. You may not boost executive pay. You may not do anything to raise executive pay until things are back to normal, and your workers must be retained. You must keep the workers, keep their benefits. That has to be the number one priority. And I don’t think Democrats are caving on that.
Marc Steiner: You don’t think Democrats are what, I’m sorry?
William Spriggs: I do not think Democrats are caving on that. I do not think Nancy Pelosi had budged an inch. They’ve locked Nancy Pelosi out of the conversation.
Marc Steiner: It’s true, they’ve done that, though the bill that Congress sent to the Senate didn’t have some of the things that the Democrats wanted in it when they first started talking about this.
William Spriggs: The Democrats on the House side passed legislation which they thought they had bargained in good faith with Steven Mnuchin, who said he was representing the president, only to find out that, well, the president wasn’t exactly giving Mnuchin that kind of authority, and it delayed the bill that just got signed yesterday. But there was compromise after it got to the Senate. And so, I think Nancy Pelosi is certainly going to require some compromise for the House to be able to pass a bailout for the industries that are asking for a bailout. I do not think Nancy Pelosi, the Speaker of the House, will want to write a blank check. She knows the record that the airline industry has. They’re a leper, they got the spots, as Maya Angelou famously said. If they show you what they are, believe them.
Marc Steiner: And they are showing what they are. So, Dr. William Spriggs, it’s always a pleasure to talk with you. Again, there’s a depth of issues, and I appreciate you taking the time with Real News today, and look forward to many more conversations as we plow away through this crisis and see what happens next.
William Spriggs: Thank you very much for having me.
Marc Steiner: Our pleasure completely, thank you. And I’m Marc Steiner here for The Real News Network. Thank you all for joining us, let us know what you think. Take care.
Production: Genevieve Montinar, Marc Steiner
Post-Production: Will Arenas