Newsletter 2/12
My father, Rev. Richard Poethig, has spent much of his life thinking and writing about the influence of Reformed Protestantism on Western capitalism and how we reward and value work (PDF). Over his lifetime, he’s made the argument that capitalism has led us to value some kinds of work more than others. At 95 years old, he can still deliver a pretty powerful sermon—even though his audience may now just be his five children on Zoom—asserting that the original intent of the Protestant reformers was to instill the idea that all work is noble, including the lowest-paid labor, and we need a society and a capitalist system that recognizes the dignity of work.
Over these past seven months, I’ve reflected a lot on my father’s moral teachings and how to apply them to policymaking in this moment. I think we have an opening to recalibrate how low-wage work is valued in American society, but only if we use this moment wisely.
Before the pandemic, we knew that people earning low or no wages worked longer, harder hours and had the least to show for it in terms of pay, dignity, and visibility. This moment underscores for all of us—including policy decisionmakers—that these workers and the jobs they perform in health care, farming, domestic work, and education are essential to a functioning society. People are putting their lives on the line daily to deliver critical services to their neighbors; choosing to support their efforts is smart policy that will directly affect our recovery. As we consider how to rebuild a healthy economy after COVID-19, we’ll have to reassess the work they do and how we compensate for it.
COVID-19 reversed progress for low-paid workers
The outlook for low-wage workers was beginning to brighten in 2019. US Census Bureau poverty data showed that overall, household incomes increased and poverty decreased last year. To paraphrase an observation by leading labor economist and Urban Institute board member David Autor, workers were starting to gain more bargaining power, setting the conditions for wages to continue upward. In fact, the prepandemic expectation was that jobs in low-paid services—many of which are essential to community function—would continue to grow as a sector, thus, demand for labor would result in workers earning more money and having more bargaining power.
COVID-19 not only reversed those gains, Autor said, but it also accelerated permanent job losses that will leave workers worse off for years. With no vaccine and experts still recommending physical distancing, Autor now predicts an increase in automation and telecommuting and decreased demand for low-paying jobs that support in-person interactions, such as hospitality, retail, and food service.
After the Great Recession, we assumed an economic recovery would drive economic progress. And, as Autor points out, increased private sector demand for low-wage work was affecting wages, but 40 percent of jobs still pay poverty-level wages. For many businesses—particularly in retail, service, warehousing, and agriculture—offering low pay and few or no health benefits is a major strategy for achieving profits in a globalized economy.
In the early months of the pandemic, we almost followed the same assumptions. Some businesses—Amazon, Rite Aid, and grocery chain Kroger being the biggest examples—recognized hazards to employee health by offering additional pay to frontline workers. Though encouraging, scaling these market-level actions would be challenging. And most of the 12 percent of companies that offered hazard pay at the start of the pandemic have already ended those premiums as the national economic outlook worsened.
But what if some of those efforts were made permanent and wide-reaching through policy change or through more coordinated employer practices? The good news is that several communities are already making promising progress.
Workers as assets to inclusive recovery
Although there isn’t a single prescription for inclusive recovery, we know that cities improving on racial and economic inclusion are more likely to embrace certain principles along the way, including building voice or power within underrepresented groups and leveraging the distinct assets each community has to offer.
The worker-led push for a living wage in Washington, DC, is an example. Despite economic pressures, city leaders have stayed the course on increasing the minimum wage, holding to the belief that putting adequate pay in workers’ pockets leads to more spending on rent, food, household needs, and other goods within their communities.
Other communities are looking to their existing workforce as assets to help keep businesses and services operating. Health departments in California, Illinois, Massachusetts, and New York are retraining their unemployed workers to become public health workers and contact tracers, with pay ranging from $15 an hour to $65,000 a year. With support from JPMorgan Chase, the Healthcare Career Advancement Program will provide infectious disease preparedness training to new workers hired to fill the shortages in health care settings and also provide longer-term digital skills development that these workers can use to advance along their career pathway.
In Minneapolis, the Center for Economic Inclusion recently challenged corporate leaders to protect underrepresented voices and help combat economic and societal racism. Pointing out that over the 10-year recovery since the last recession, Minneapolis and Saint Paul have only reduced the wage gap between white workers and workers of color by $541, executive director Tawanna Black urged city leaders to quicken the pace toward change. When I interviewed Tawanna recently, she reiterated her call for deliberate action on both economic and racial inclusion. “I think in our work, we often have to call out the difference [between economic equity and racial justice] for folks who often take for granted that if we make progress in one, we’ll make progress in the other. And we can either choose to take action now or we can choose to keep going until the pain demands change.”
The value of work and workers
To come full circle, if I’ve learned anything from my father, it’s that the fights for economic justice and racial justice are intertwined, even if they don’t always run together. In the same way we need to value every job and its role in the community, we need to value every worker too. When work is devalued in pay and reputation, we devalue the people in those jobs while demanding more from them. The pathway to a more just capitalist system is also the pathway to a more inclusive society where all workers are valued, as assets and as humans deserving shared prosperity and what my father called “a more abundant life for all the people.” During this time of economic uncertainty and stress, I am hoping we can make some footprints toward justice.
The Urban Institute’s Collaboration with JPMorgan Chase
The Urban Institute is collaborating with JPMorgan Chase to inform and catalyze a data-driven and inclusive economic recovery. The goals of the collaboration include generating cross-sector, place-based insights to guide local decisionmakers, using data and evidence to help advise JPMorgan Chase on the firm’s philanthropic strategy, and conducting new research to advance the broader fields of policy, philanthropy, and practice. This newsletter series outlines what inclusive recovery means in light of the coronavirus global pandemic. Subscribe here to learn more about the cities/communities that have successfully applied the principles of inclusive recovery to the realities of pandemic response and ensured that those most harmed by the health and economic impacts of COVID-19 are ultimately those best positioned to frame the way forward.
