Data clear: New stimulus needed

Basic protections needed in unemployment insurance, SNAP, energy and other assistance as the COVID-19 virus surges in Iowa and other states in a weak economy.

As the long-awaited next round of federal aid and stimulus remains mired in political infighting, the hardship in Iowa — and around the country — is acute. As a new report from the Center for Budget and Policy Priorities (CBPP) makes clear, households are struggling to pay for the basics now, and that need will only grow if the $600 per week federal “PUC” boost to unemployment insurance benefits expires as scheduled next week.

The receipt of SNAP (food stamps) is up 14 percent in Iowa since February of this year, but the share of Iowans reporting food insecurity continues to grow. According to the CBPP’s analysis of the Census Bureau’s Household Pulse Survey, 1-in-8 (12 percent) Iowa families with children reported (for the last week of June and first week of July) that their household sometimes or often didn’t have enough to eat in the last seven days.

Housing insecurity is also a growing problem. Iowa set up a small fund with CARES Act funds to provide short-term assistance for those unable to make rent or mortgage payments — but disqualified those receiving PUC benefits from even applying. There is about $20 million left in the fund (out of $22 million) but when the PUC expires next week, the demands on this program will skyrocket. According to CBPP, 1 in 6 Iowa tenants are already behind on their rent.

These hardships will be especially stark for Iowa’s Black and Latino workers and their families. Unemployment rates are persistently higher for workers of color. These workers are disproportionately represented among the front-line and manufacturing (especially meat processing) jobs that have posed a higher risk of exposure to the virus. In the absence of meaningful and enforceable workplace protections, the temporary boost to UI benefits provided something of a refuge. As an administrative judge concluded in approving unemployment compensation for a worker who quit because of safety concerns concluded in one recent UI case, “the working conditions at Tyson were unsafe, intolerable and detrimental, and rose to the level where a reasonable person would feel compelled to quit.” But that option evaporates next week.

All of this hardship would be even worse in the absence of the CARES Act provisions for enhanced unemployment insurance, and increased federal support for SNAP, LIHEAP (Low-Income Home Energy Assistance Program), and other social supports. Iowans are suffering with those programs in place, and they will suffer more if social supports are allowed to return to levels previous to COVID-induced shutdowns.

The latest data on initial unemployment claims, released today, show the persistence of Iowa’s economic woes during the pandemic, with nearly 400,000 filing claims in the last 18 weeks.

It is crucial that, with the virus surging in Iowa and other states and the economy projected to remain weak, that our federal representatives move quickly to enact a stimulus package that continues and expands upon these basic protections. We need an extension of expanded unemployment benefits, more opportunities for paid leave, more federal support for child care, SNAP, and LIHEAP, and robust fiscal relief for states and localities. And it is just as crucial that Governor Reynolds and the Iowa Legislature pass along any discretionary state assistance to those in the most need.

Colin Gordon is senior research consultant at the nonpartisan Iowa Policy Project and a history professor at the University of Iowa.

Worker safety: Who gets protected?

Public policies should be assessed on whom they put at risk and whom they reward. The blanket business immunity in SF2338 during COVID-19 comes with a failed record of protecting Iowa workers.

The COVID-19 crisis poses a dizzying combination of health and economic risks, and it has forced us to rethink the ways in which our public policies protect us against those risks. The underlying logic of the CARES Act, for example, was based on the assumption that sharing public spaces — especially workplaces — posed a grave threat to the public health. Its benefits — including a limited program of paid leave and a relatively generous expansion of unemployment insurance — were designed to make not working and sheltering in place possible.

That instinct was right but its execution was dismally flawed. State unemployment systems could not begin to manage the avalanche of claims. The virus flourished in settings — most starkly meatpacking plants — that ploughed ahead as “essential” businesses. And states impatient to open up again did everything they could to discourage workers from accessing the new federal benefits — a point Iowa Workforce Development Director Beth Townsend all but conceded in testimony before Congress last week.

From the first hint of the virus to the rush to reopen, Iowa has done perilously little to protect its workers, their families, and their communities. Safe workplaces are pretty clearly defined in the guidelines developed by both the CDC and the Occupational Health and Safety Administration (OSHA). But there is nothing in state or federal law that compels employers to follow them, and ample evidence that many are not. Even in the midst of local outbreaks, county health directors lacked the authority to shut down production. “They just don’t get it,” as the Tama County emergency management coordinator, complained in the midst of an outbreak at the National Beef plant there, “They will keep going until all of their employees have this virus. They would rather risk their employees’ health and keep their production going.” As Governor Reynolds coldly reminded us in late May: “Our recovery is contingent on our ability to protect both the lives and the livelihoods of Iowans. We can’t prioritize one over the other.”

Those priorities came into sharper focus this week. In a brief and largely aimless session, the Iowa Legislature offered scarcely a passing reference to the health and economic insecurity facing Iowa’s working families. They did, however, jump to address the insecurity of Iowa employers — offering up blanket immunity from COVID related claims coming from workers or consumers.

The “COVID-19 Response and Back to Business Limited Liability Act” (Senate File 2338) requires that any claims of exposure to the virus meet a standard of “reckless disregard” or “actual malice.” Employers “shall not be held liable for civil damages for any injuries sustained from exposure or potential exposure to COVID-19 if the act or omission alleged to violate a duty of care was in substantial compliance or was consistent with any federal or state statute, regulation, order, or public health guidance related to COVID-19 that was applicable to the person or activity at issue at the time of the alleged exposure.” Since such regulations or guidelines are virtually non-existent, it is hard to imagine what such threshold might look like.

At a time of such peril and uncertainty, this is a remarkable and damning expression of our state’s priorities. It is a solution in search of a problem; there has been no stampede of frivolous damage claims — in Iowa or elsewhere. And it ignores the more obvious and equitable tack, which is to protect the workers in the first place, and allow them to refuse work (and draw unemployment benefits) if that protection is not sufficient. “Everybody wins when businesses follow clear, science-based guidelines to protect health and safety,” as The New York Times put it in a recent editorial. “Workers and customers are less likely to get exposed to the virus, and businesses are less likely to get exposed to litigation.”

Now, more than ever, our public policies should be assessed on whom they put at risk and whom they reward; on whom they protect, and whom they do not. The blanket immunity offered Iowa businesses by SF2338, alongside our abject and continuing failure to offer any meaningful protection for Iowa’s workers, fails that assessment on all counts.

Colin Gordon is senior research consultant for the Iowa Policy Project and a professor of history at the University of Iowa.

Encourage Iowans to seek both jobless, housing benefits

The new rental and mortgage assistance program offers relief in one breath to Iowans economically harmed by COVID-19, and then snatches it away in the next.

Amidst the worst employment crisis since the Great Depression, Governor Kim Reynolds and her colleagues seem fixated not on the magnitude of the crisis, but on the generosity of the CARES Act unemployment programs and the obstacle they apparently pose to getting Iowans back to work.

First, Iowa Workforce Development issued a chilling directive (from which they have now retreated) which very nearly suggested that only those actually laid out by the virus had any claim on unemployment insurance. Now the new “Iowa Eviction and Foreclosure Prevention Program,” (which offers rental and mortgage assistance to households “at risk of eviction or foreclosure due to a documented COVID-19 related loss of income”) actually disqualifies those receiving unemployment insurance from applying.

The logic here is difficult to fathom. Those thrown out of work by the pandemic are struggling to make ends meet, and to sustain rent or mortgage payments. Aren’t these exactly the Iowans who should be eligible for a program of rental or mortgage assistance? Instead, the new program offers assistance to “Iowans who have been economically impacted by COVID-19,” in one breath and then snatches it away in the next — penalizing and stigmatizing those most at need by treating receipt of the federal Pandemic Unemployment Compensation (PUC) benefit ($600 a week through July 25) like a failed drug test.

But even if we put the savage inequity of this aside, the Governor’s evident distaste for the federal supplements to unemployment insurance is just bad fiscal policy. Let’s do the math. As of this week, 178,619 Iowans are receiving regular unemployment benefits and another 17,545 are receiving Pandemic Unemployment Assistance (PUA).  The PUA base benefit is paid for with federal dollars, and recipients under both regular UI and the PUA also get the $600 PUC benefit through July. That’s an inflow of over $120 million a week, from the federal treasury into the pockets of working Iowans.

If we assume an effective state income tax rate of 2.3 percent and effective sales tax rate of 5.3 percent (both based on estimates by the Institute on Tax and Economic Policy for Iowans earning between $22,000 and $40,000/year), that’s a boost to state income tax receipts of $2.8 million dollars a week,[1] and a boost to state and local sales tax receipts of $6.4 million dollars a week. In the seven weeks before the PUC expires July 25, that’s a net revenue of gain of $64.5 million — or enough to pay for the mortgage and rental assistance program (which has been allotted $22 million of Iowa’s CARES Act funds) almost three times over.

And these are conservative estimates. The unemployment totals do not include the over 150,000 UI (including those from the last two weeks) that have been filed but not yet processed. They do not include the retroactive benefits payable to those qualifying for UI. They are based on the minimum monthly benefit under the PUA. And they do not include the stimulus or tax revenue impact of state-funded UI benefits.

For the health and safety of working Iowans, we should be encouraging and enabling as many as possible to qualify for unemployment benefits. And, as long as federal government is picking up the tab, we should jump at the chance to backfill state and local budgets with the tax revenues that accompany such benefits.

[1] The state’s June 3 fiscal update echoes this estimate, attributing a $31.4 million increase in state income tax receipts over the 10-week period from March 19 to June 2 ($3.1 million a week) to withholding from UI benefits. This estimate is slightly higher because it includes the withholding from state-funded benefits as well.

Colin Gordon is senior research consultant for the nonpartisan Iowa Policy Project. He is a professor of history at the University of Iowa.

Demanding a healthy way to go back to work

The state’s “back to work” directive sends the wrong public health message at exactly the wrong time. And in clear defiance of Iowa and federal standards, it puts economic and physical security of workers at unnecessary risk.

Iowans want to get back to work. But — much more importantly — they want to get back to work under conditions that protect their health and safety, and the health and safety of their families and communities.

Over the past few weeks, we have questioned both the metrics and the lack of transparency behind the state’s decision — virtually alone among its peers — to stop short of a “shelter in place” order. Those concerns are now magnified by announcement this week that Governor is lifting social distancing measures in 77 of Iowa’s 99 counties — this despite the fact that the caseload in Iowa continues to grow, that two of Iowa’s metros (Sioux City and Waterloo-Cedar Falls) are currently among the worst “hot spots” in the entire country, and that a sudden influx in social interactions, as the Iowa Medical Society warned earlier this week, “is all but certain to cause a spike in new COVID-19 patients and potentially overwhelm our health care system.”

Even more troubling is the clear evidence that public health policy is being driven by largely economic concerns. At the same moment as the Governor’s office announced the relaxation of restrictions, Iowa Workforce Development (IWD) chimed in with a chilling directive for unemployed Iowans — warning not only that “Iowans who refuse to return to work without good reason when recalled will lose eligibility to unemployment benefits,” but that those who continued to draw benefits in defiance of this directive faced “serious consequences for fraud, including fines, confinement and ineligibility for future unemployment benefits.” IWD even created a webform where employers are encouraged to “report employees who refuse to return to work without good reason or who quit their jobs.”

The IWD directive goes on to list a narrow range of “good cause” reasons for remaining unemployed — including a positive COVID test (for the worker or a member of her or his household), and the loss of child care or transportation to work because of COVID-19.

This directive — and the message it sends to working Iowans — is bad public health policy in a state where the most severe COVID outbreaks have occurred at workplaces. But, just as importantly, it offers a fundamentally flawed misreading of both Iowa law and the terms of the federal Families First and CARES Acts.

Iowa Code (871-Chapter 24.26 [96]) is crystal clear on this point, and offers a much broader set of conditions and options. A person who leaves a job due to “unsafe working conditions” or “intolerable or detrimental working conditions” cannot be considered to have voluntarily quit the position, which would make the worker ineligible for unemployment benefits. The determination of what is “unsafe” or “intolerable” depends upon both the workplace and the worker. A reasonable standard of safety, under these conditions, might be the guidance offered by the Centers for Disease Control or the Occupational Health and Safety Administration for best practices — regarding social distancing and protective equipment — for workplaces. Yet, while IWD is directed to discourage claims and applications, there is no accompanying expectation that such safety guidelines are mandatory in Iowa workplaces.

Federal law offers the same basic assurance. For workers collecting regular UI, the federal “prevailing conditions of work” provision prohibits a state from denying UI to a worker who refuses work if the “the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality.” This provision covers “work rules, including health and safety rules” and situations where there has been a change in the existing conditions of work. According to the legislative history of the provision, it “requires a liberal construction in order to carry out the Congressional intent and the public policy embodied therein,” and the “the claimant should be given the benefit of the doubt.”

In turn, IWD’s directive flies in the face of the federal programs (and money) designed to both prop up Iowa’s unemployment system through the crisis and offer a more generous approach to eligibility. The Families First Act (passed in mid-March) offered emergency grants to states (including Iowa) for the administration of unemployment under the condition that states streamline their application process and “demonstrate policies to increase access to unemployment compensation.” The Act also requires a report, due at this time next year, detailing how progress on increased access.

The CARES Act (passed in late March) established three new unemployment programs: Pandemic Unemployment Assistance (PUA) for those workers (self-employed, gig workers) not conventionally eligible for unemployment insurance; Pandemic Unemployment Compensation (PUC), which adds $600 per week (through the end of July) to all unemployment claims paid under either regular UI or the PUA; and Pandemic Emergency Unemployment Compensation (PEUC), a 13-week extension of state UI benefits.

The programs extended the logic of the Families First Act: States were expected to be expansive and generous in their approach to eligibility for unemployment insurance, making it both possible and economically-feasible for workers to shelter in place and avoid the risks posed in many settings by continued employment. Importantly, the CARES Act attached a list of COVID-related conditions (similar to that in the IWD directive) to the PUA program, but not to the expansion or extension of regular UI benefits.

The IWD’s “Back to Work” directive is bad public policy. On public health grounds, it sends exactly the wrong message at exactly the wrong time. And, in clear defiance of Iowa and federal standards for unemployment insurance eligibility, it puts the economic security and physical health of Iowa workers at dire and unnecessary risk. The Governor and Iowa Workforce Development should reverse course and protect our workers and their families.

Colin Gordon, senior research consultant for the Iowa Policy Project, is a professor of history at the University of Iowa.