Opinion | The Coronavirus Hit Workers Hard. The Paycheck Guarantee Act Could Help.


Since 2016, Luciana has worked at Burger King clocking more than 40 hours each week. This year, she added a second job, picking up shifts at Dunkin’ Donuts. Even in the best of times she struggled to pay the bills given her low hourly wage.

In March, as the novel coronavirus spread and the public started to heed the warnings from officials, sales dwindled and Luciana’s hours were cut. Today, she is uncertain of her employment relationship with Dunkin’ Donuts. At her Burger King franchise, only managers are working. She received her first unemployment insurance check in mid-April. But the check didn’t include the extra $600 that the CARES Act promised. It was for only $240, which isn’t enough to pay for rent, food and her other bills. And she is one of millions of service-sector workers whose lives have been upended by the pandemic.

Since late February, we have been surveying service-sector workers as part of our Work-Family Text Study — a daily text message-based survey of 1,000 wage workers in the retail, food service and hospitality industries who have a young child (aged 2 to 7) and live in the Philadelphia area.

Naturally, we didn’t set out to study the effects of Covid-19. But the timing of our data collection coincided with the beginning of the crisis, and our participants’ responses tell the story of how the economic downturn created by the virus response has immediately and profoundly affected the lives of workers on the front lines of the service industry.

It’s a grim Before and After picture.

By the end of March, two-thirds of workers we surveyed found themselves working less: 41 percent had been laid off; 31 percent had their hours reduced; and a mere 28 percent were still working as usual. By the end of April, jobs that previously looked safe also crumbled: 58 percent had lost a job, and only 20 percent were working as usual. But among those who have been laid off, fewer than one in five have so far managed to receive unemployment insurance benefits.

Of course, this is all happening in a context in which roughly 40 percent of Americans were, before the pandemic, unable to afford a $400 emergency expense. For countless people, this emergency will be much more costly than that. Perhaps not surprisingly, roughly half of those we surveyed said they didn’t have enough money to make rent for May.

Nearly every worker we surveyed has been hurt in this crisis. But as we parsed the data, two groups emerged — one facing substantially greater harm than the other.

What differentiated these two groups wasn’t their gender, race or ethnicity. Instead, it hinged on whether their employer was compensating them for the hours of work they have lost. Eighty-seven percent of workers whose employers were unable or unwilling to provide them compensation for lost work experienced a decline in income; 59 percent of them reported losing more than half their income.

A very different experience was reported by their peers with employers who provided at least some compensation for time not worked — often through collective bargaining agreements, pressure campaigns, business models that incorporate the cost of supporting work forces in hard times or the incentive of government-backed business loans.

According to our survey data, half of the workers being compensated by their employers for lost work have avoided income loss altogether. But rather than giving employers the resources they need to cover payroll, Congress has so far chosen to deliver most income support through public benefits — despite the fact that many state governments have intentional roadblocks that make it very difficult to get those benefits.

But the United States can still reverse course. We can follow the model of many countries, such as Britain and Denmark, and require employers to keep employees on the books. As proposed in Representative Pramila Jayapal’s Paycheck Guarantee Act, our government can cover payrolls for workers paid up to $100,000 a year until the crisis is over, and retroactively include employees who have been laid off since March. Its open-ended funding would be an enormous improvement from the currently overwhelmed Payroll Protection Program, which runs out of money every time applications open because of its capped budget, leading to fights over who deserves its scarce dollars most.

Our data show that it’s not too late to pivot: Even now, 41 percent of the workers in our sample are still technically working in some capacity for their original employer, even if their hours are minuscule. Another 23 percent describe their layoff as temporary. Crucially, this means nearly two-thirds of our respondents could be made whole by the Paycheck Guarantee Act.

And there’s still much that can be done for the workers who have been told that their layoffs are now permanent — which was about 36 percent of the respondents to our survey. More than half of them were already receiving Supplemental Nutrition Assistance Program benefits, informally known as food stamps, before the crisis. If Congress was to boost the maximum SNAP benefit, that help would reach these worst-hit families right away.

“As long as we get SNAP benefits, we will be OK for groceries,” one mother with two young children texted us.

Our data sets from the Work-Family Text Study reveal that there’s little reason to reverse these repairs to the social safety net once the public health threat fades: the parents in our study were already facing an affordability crisis before the virus reoriented American life.

Luciana, who worked at Burger King and Dunkin’ Donuts before all of this, was struggling before the coronavirus. Both her low wages and the no-sick-leave policy of both of her employers contributed to the small amount of unemployment insurance she’s eligible for — and her lack of rainy day savings. When the economy, someday, resumes, “That would be the first thing I want to change,” Luciana said.

“I want to change the hourly wage cause can’t nobody live on that $7.50 or $8,” she told us. “I would fight for the minimum wage to be raised. And then I would fight for time and a half, getting paid our holiday pay. I would fight for everything that we’re supposed to get. Fight for our overtime that they don’t want to pay us for. Vacation time. Sick time. I would fight for all of that.”

Elizabeth O. Ananat (@LizAnanat) is a professor of economics at Barnard College, Columbia University. Anna Gassman-Pines (@agpines) is a professor of public policy and psychology at the Sanford School of Public Policy at Duke University.

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