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.

Historically high: Jobless claims vs Great Recession

New unemployment claims are trending down, but still rising and in the latest week were still nearly as high as the worst week of the Great Recession.

The pace of new unemployment claims slowed in Iowa to 13,040 for the week ending May 16, but still nearly as high as new claims in the worst week of the Great Recession. Meanwhile, the running total of new claims since mid-March — at 313,150 — is about 18 percent of Iowa’s entire labor force.

On top of that, Iowa has slowly begun to process claims for Pandemic Unemployment Assistance (PUA), the federally funded benefits for those ineligible for regular UI. In the week ending May 9, there were 15,219 Iowans on continuing PUA claims and 4,552 new applications.

The PUA has enormous potential for the self-employed, independent contractors, platform or “gig” workers, and new entrants to the labor force. It pays a weekly benefit of between $200 and $590 (depending on earnings and dependents). Once approved, recipients can received up to 39 weeks of benefits — retroactive to early February and running through December. Receipt of PUA benefits brings with it another $600 month in Pandemic Unemployment Compensation (PUC), the federal top-off that runs through the last week of July.

All of this is funded entirely with federal dollars — making it an important source of economic stimulus for the state as well.

But the rollout of the PUA has been slow. Initial applicants were summarily rejected by Iowa Workforce Development and the first payments did not trickle out until almost two months after the program was put in place. And the number of new and continuing PUA claims in Iowa (just under 20,000) as of this morning is very low given the number of Iowans that could benefit from this program (taken together, those reporting some form of self-employment income and new entrants probably account for about 20 percent of the labor force). Under normal conditions, Iowa pays unemployment claims to only about 41 percent of the unemployed. The PUA could and should extend that coverage dramatically.

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

Faster infection pace, fewer limits

Despite problems with testing, we are able to know where there have been major increases in identified cases.

A number of Iowa counties are seeing a surge in coronavirus cases, even as the Governor continues to reopen the Iowa economy and further relax social distancing requirements.

In Wapello County, cases soared from 10 on April 28 to 306 two weeks later. Over that same time period, Crawford County saw an increase from 21 to 207, and Sioux County from 8 to 103. Yet instead of reinstituting social distancing in those hot spots, the Governor has expanded her relaxation of requirements on businesses from 77 counties to all counties statewide.

Given the problems and delays with testing, and the lack of widespread testing, it is difficult to know just how many Iowans are actually infected with the coronavirus, and whether there are other emerging hotspots that remain unidentified. But we do know where there have been major increases in identified cases. For the most recent two-week period, the table below shows the 16 counties with the highest number of new cases per 100,000 population over the past two weeks (through May 12).

When adjusted for population, we see that many rural counties are experiencing more rapid growth than urban centers, many of which (Linn, Johnson, Scott) did not even make this list. Half the counties on the list (indicated by shading) are among the 77 counties where restrictions were first relaxed on May 1.

Most of those eight counties we identified last week as likely hot spots based on the growth in cases up to that point. New additions to the list are Monroe and Osceola, where the total number of cases is not large, but where we may be seeing the beginning of a surge. Six of the eight shaded counties saw their case count more than double in the past week.

It is easiest to see which counties have grown the fastest if we compare the cases per 100,000 population and how this number changed since the county first hit 50 cases. The counties are compared on the basis of when the surge began in their county. Wapello and Crawford have been growing at much the same rate as Woodbury, notably one of the top counties in the entire country in terms of the size and rate of the coronavirus surge.

 

 

 

 

 

 

 

Peter Fisher is research director for the nonpartisan Iowa Policy Project in Iowa City.

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 Falls 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.

Governor’s metrics still raise questions

Iowa’s social distancing policy appears to be hostage to an unexplained and backward-looking indicator for hospitalizations.

(UPDATED, APRIL 16)

The latest “metrics” from the Governor’s office once again raise serious questions. A few days ago it seemed clear that two or three of the state’s six regions would very soon reach the magic number 10, at which point shelter-in-place is considered justified by the Governor and the Iowa Department of Public Health, according to their guidelines. Instead, as of April 15, regions 1 and 6 remained stuck at 8 and 9, respectively, and region 5 had fallen to 8. Why? Because the hospitalization rate score, which by deduction must have been at 3 for all 6 regions just a week ago, was suddenly downgraded to 1 in two regions, and 2 in two others.

Today, April 16, things changed again. Lo and behold, Region 6 made it to 10. And in fact the Governor followed through with something akin to shelter in place, with most kinds of gatherings limited to families, not groups of 10 or fewer. No additional business closures were announced, however. Meanwhile, Region 5 jumped two points with new outbreaks at two more nursing homes, but then lost a point because the hospitalization score apparently was lowered again, without any explanation. So it remains at 9, even though it is maxed out on all criteria except hospitalizations.

No explanation of the hospitalization score has been forthcoming beyond the vague definition in the “Guidance” memo unearthed by Zachary Smith of the Iowa City Press-Citizen last week. That memo defines it thus: “Percent of identified cases requiring hospitalization.” Is the numerator the cumulative total of all cases in Iowa that required hospitalization at some point, or just cases in the last 14 days, or just current hospitalizations as of the most recent day? Is the numerator cumulative cases, cases in the last 14 days, or something else? We don’t know, and no hospitalization rate by this measure has been reported even statewide, nor does the newly launched dashboard contain any hospitalization data at the county or regional level.

Total cases of COVID-19 continue to rise, as do current hospitalizations. So in the face of a rising number of Iowans currently with a severe enough case of the virus to be hospitalized, why does the hospitalization score decline, lessening the supposed need for shelter in place? Why is the percent relevant in the first place? Surely the total number of persons hospitalized for the virus is the single most important indicator, since it signifies not only the number of Iowans seriously affected by the virus, but the potential strain on hospital resources.

A forecast of this number is the crucial indicator in the widely known forecasting models by epidemiologists at the University of Washington and elsewhere. But in Iowa, we still do not have a forecast, and social distancing policy appears now to be hostage to an unexplained and backward-looking indicator. If that percentage continues to be low, or to fall, despite daily increases in cases, deaths, and hospitalizations, we may not see another region get to the magic number of 10.

Peter Fisher is research director for the nonpartisan Iowa Policy Project in Iowa City.

pfisher@iowapolicyproject.org

Sheltering the data in place

One thing is clear: transparency has been sadly lacking, and for no apparent reason.

Governor Kim Reynolds over the past few weeks has moved incrementally to close more kinds of businesses, to the point where Iowa’s restrictions now resemble those of states that have a blanket statewide “shelter in place” order. Significant distinctions remain: a proper and comprehensive shelter in place order closes all businesses except those specified as essential, leaving no ambiguities and loopholes, and comes with clear and enforceable restrictions on travel and social activities.

The governor continues to assert that her recommendations are driven by the same four metrics that have guided her since the beginning and that only recently became partly public information due to efforts by the press. We provided a thorough analysis of that guidance several days ago. On Tuesday, we finally learned about one of those metrics: There are three long-term care facilities with a sufficient number of COVID-19 cases to be classified as a facility with an outbreak.

We now know enough to construct the point system in spite of stonewalling by the Governor’s Office.

The first of the four measures — percent of population age 65 or over — can be found from census data. The second — cases per 100,000 population — can be calculated because the number of cases has been released by IDPH by county. The third — outbreaks at care facilities — is now known, with locations, because of a question at a press conference.

That leaves the fourth — hospitalizations as a percent of cases — that is unknown by county or region because the governor still refuses to release the data. But we know the total score by region because it shows up on the maps that are intermittently released at press conferences (but remain unavailable on the IDPH website). Thus by subtraction we can determine that all four regions must be at the highest level, a 3, on the hospitalization rate score.

From here on out, the only thing that can change is the cases per 100,000 population and the number of care facility outbreaks. Region 5 is already at the maximum on the cases measure, and regions 1 and 6 will likely get there soon, leaving all three regions with a score of 9, 1 short of 10, the number that supposedly triggers shelter in place. So those regions, covering a large majority of the state’s population and COVID-19 cases, can get to 10 only with another outbreak at a care facility.

The governor on the one hand argues that we already have the equivalent of shelter in place, and at the same time the metric that she says still guides her decisions shows that shelter in place is not yet warranted anywhere in the state. Has that metric really been used thus far, and in what way? How do you get from the metrics to a list of particular additional businesses to close? What will happen when a region reaches 10? Will the governor order more stringent measures in just that region? Or will the whole thing be scrapped once a proper forecasting model is developed that meets with her approval?

One thing is clear: transparency has been sadly lacking, and for no apparent reason.

Peter Fisher is research director of the nonpartisan Iowa Policy Project.

pfisher@iowapolicyproject.org

Iowa’s employment apocalypse

As daunting as we may find the new unemployment claims numbers, they understate the true scale of the damage to the economy.

This morning, the Department of Labor released the count of new weekly claims for unemployment insurance, marking the second week of claims reflecting the employment impact of the COVID-19 crisis. The numbers are staggering, not just for their scope but for their suddenness. Most downturns in the business cycle occur gradually over a number of months; this spike has occurred in just a couple of weeks. These numbers are also the best metric we have in this unfolding crisis, providing us a near real-time measure that the April jobs report (with a March 12 reference point) will largely miss.

Nationally, new claims for the week ending March 21 were 3.28 million; last week we added another 6.65 million new claims — a total fully 10 times the previous weekly peak. In the week ending March 21, Iowa fielded 40,952 claims for unemployment insurance; in the week ending March 28, we added another 58,453. The total over the last two weeks — almost 100,000 new claims — is about the same number of new claims filed in the first four months of the Great Recession. The graph below plots weekly claims since 2007, the Great Recession indicated by the grey shading.

These numbers, of course, understate the true scale of the damage. Those ineligible for regular unemployment insurance — including the self-employed, gig workers, independent contractors, and new entrants to the labor market) do not show up in the claims data — although this will change once the federal Pandemic Unemployment Assistance Program kicks in. And the underemployed, those who are hanging on to whatever hours they can get, are also uncounted here.

And Iowa is not alone. In a longer post at Dissent, I plot all the state numbers: Off-the-charts rates of new claims over the past two weeks are evident in almost all states — but especially in those with a high share of leisure and hospitality workers, and those hard hit by the pandemic itself. California logged 186,000 new claims in the week ending March 21; and added almost five times as many (878,000) this week. New claims in Louisiana, as a telling measure of the mess many states are in, spiked on March 21 to the same level (over 70,000) as those made in the immediate wake of Hurricane Katrina — and this past week added another 97,000 claims.

The best numbers we have show that Iowa and the nation will see a lot of economic harm. It is essential to help all workers now.

Colin Gordon is a professor of history at the University of Iowa, and senior research consultant at the Iowa Policy Project. He has authored or co-authored IPP’s State of Working Iowa series and several other IPP reports on issues affecting working families, jobs, pay and benefits.

Too soon to consider recovery?

Even economists point the immediate focus to public health — and keep recovery in the wider view.

What is needed in a pandemic is for citizens to stay home, and for public policy to assure access to unemployment insurance and health care, and push support to the health system.

Economists such as former Labor Secretary Robert Reich are making these points — that limiting the spread of the coronavirus is the top priority to save lives.[1] When even economists are pressing the point about public health, our leaders should pay attention. Now is not the time to talk about being “open for business” prematurely, as President Trump once suggested we do by Easter.

That is not to say a public health spotlight precludes steps in the coming weeks and months to set up recovery when that can be the main focus.

Now, jobs remain in critical services in hospitals and electric stations, and some in construction. Factories where people stand next to each other on a production line have different social distancing from workers who build things in the open air. We could expand more of the latter jobs right now where the materials are at hand.

Good examples: Wind turbines and solar installations and the power lines that connect them to the electric grid. Right now we could be constructing clean energy facilities that can be producing electricity in six months or a year when we all want demand to expand. It is an opportune moment to think ahead and start replacing older coal production plants, which have their own health problems.

Public policy has a role here. Just before the Iowa legislators recessed because of the COVID-19 pandemic, they passed — and Governor Kim Reynolds signed — a bill to stabilize the solar industry. It would do this by setting the price for the next seven years for the electricity that MidAmerican and Alliant buy from homeowners and businesses.[2]

Another step the Legislature could take is lifting the limit on the tax credit for businesses and homeowners when they install solar.

The annual amount that could be taken on the credit was not fully used in the first year, but in all years since 2013 installations exceeded the cap, now at $5 million per year, pushing installations completed later in the year to a waitlist.[3] The tax credit eventually comes but not until at least a year later. While an installation completed today will get a federal tax credit when taxes are filed in April 2021, the Iowa tax credit will not happen until 2022 or later.

Why make these Iowa investors wait? Extending the total amount eligible for the credit from $5 million to perhaps $20 million would further stimulate the construction of solar panels just when the economy needs the jobs.

There also is a federal role, as the amount of that credit for both solar and wind is phasing out. This would be a good time to stop the phaseout for the next several years. Tax credits of electric cars could also be enhanced.

COVID-19 has slammed the economy. We need to think about when we will recover but also how we will recover. Jobs in clean energy have been on a growth curve that can be re-established quickly. And these jobs are creating a new energy system that will help us with the next crisis, climate change.

Most agree we should follow science to confront the pandemic. We should also follow the science to prepare for the next crisis — climate change.

David Osterberg is an economist and lead environmental researcher at the nonpartisan Iowa Policy Project in Iowa City. Contact: dosterberg@iowapolicyproject.org.

A version of this column also ran in the April 1 Quad-City Times.

 

 

 

 

[1] MSNBC interview, March 17, 2020. https://www.msnbc.com/the-beat-with-ari/watch/-our-economy-is-shutting-down-clinton-wh-veteran-pushes-lives-over-dollars-in-covid-19-crisis-80868933847

[2] O. Kay Henderson. Iowa House and Senate give solar bill unanimous support. Radio Iowa March 4, 2020. https://www.radioiowa.com/2020/03/04/iowa-house-and-senate-give-solar-bill-unanimous-support/

[3] Iowa Department of Revenue. Solar Energy System Tax Credit Annual Report for 2019. https://www.legis.iowa.gov/docs/publications/DF/1126111.pdf

Churchill’s words for Iowa’s future

Iowans should take this opportunity to build a stronger, more resilient state that is forward facing and not just rebuilding what came before.

“Never let a good crisis go to waste” — Winston Churchill.

Mass government spending and social distancing nearly everywhere is a response to the COVID-19 outbreak in the United States. Perhaps we, like Winston Churchill, writing during World War II, might find a silver lining.

There is a sense of national unity or purpose, an outpouring of selfless action by medical professionals, and a renewed sense of national urgency to “Wash your damn hands!” What is intriguing to me is the number of individuals who — if they are still working — are suddenly shifted to a work from home situation and the follow-on effects that this has had.

While not all the “dolphins returning to the canals of Venice videos” are real (sorry!), the reduction of air pollution and greenhouse gas (GHG) emissions in China are observable and documented.[1] European cities are seeing similar reductions in GHG emissions and air pollution. A similar impact may soon be seen in the United States as “shelter in place” directives, which cut driving and factory production, take hold across the nation. The economic slowdown from the spread of COVID-19 could lead to a 9 percent reduction of emissions from the sector that is the largest GHG generator across the nation.

The transportation sector is the largest source of GHG emissions nationwide, and nearly one-third of all miles driven are for commuting purposes.[2] While only 5 percent of Americans regularly work from home today,[3] the Bureau of Labor believes that nearly one-third of Americans could do so.[4] Winston Churchill might ask: How can this be made sustainable?

From recent personal experience, working from home, especially if your partner also is now working from home, requires very few things — a comfy chair, a tub of salted pretzels, and high-speed internet. I am fortunate that I live in an area with access to broadband, but many Iowans find broadband access prohibitively expensive or lack access at any price. My own family members who live in rural areas of Iowa have experienced broadband access problems.

This disparity is well known to Governor Kim Reynolds’ office, which has encouraged the growth of broadband throughout the state through a grants program.[5] Even with this support, much of Iowa remains in a broadband desert, without access to the high-speed internet that allows for teleworking options for Iowans. The blue-shaded areas in the map below indicate areas lacking 25-megabit-per second download speed and 3-megabit upload speed, known as 25/3 broadband, in June 2018.[6]

Similarly lacking in quality are Iowa roads. The American Society of Civil Engineers gives Iowa an overall grade of “C,” with an even lower grade of D+ and D for our bridges and dams.[7] This is also not a new phenomenon, and the old joke of the Midwest having two sessions, winter and construction, points to the constant state of improvements we often find.

With these poor infrastructure grades in mind, how do we make the crisis of COVID-19 not go to waste? The federal government is passing legislation and considering more policy to provide needed financial support for workers, businesses, and the states.

While funds must first go to supporting those who have lost their jobs and for healthcare, infrastructure programs are also a way to quickly inject money into local economies once the crisis has subsided. We can even ensure some workers stay employed as we increase infrastructure construction during these economic lean times.

How? We can super-charge telecommunications investments by the state, either directly or via low-interest loans and grants to existing telecommunication firms. We can use the available public right-of-way that exists on local and state roads to lay fiber for broadband communication capacity across the state while also jump-starting road and bridge repair projects.

When telecom companies are given loans or grants, they should come with price caps to ensure that broadband service extensions are actually used by the rural public. Roads should be rebuilt with an eye less toward peak commuting travel, but more realistic travel demands in a world with expanded telecommuting and reduced motorist traffic.

In short, Iowans should take this opportunity to build a stronger, more resilient state that is forward facing and not just rebuilding what came before. And, they should ensure that fair and prevailing wages are paid for all construction contracts.

This time is one full of heartbreak for families directly affected by COVID-19 and anxiety for those wondering if and when their own family will fall ill. Industries are struggling and the economy may be grinding to a halt by the swift application of painful, but necessary, distancing efforts.

But within these trying times is an opportunity to respond with the future in mind. Like Churchill said, we should not let this crisis go to waste.

 

[1] https://www.politico.com/news/2020/03/13/climate-advocates-hit-political-turbulence-127649

[2] https://www.fhwa.dot.gov/policy/2015cpr/chap1.cfm

[3] https://www.cnbc.com/2019/10/13/people-who-work-from-home-earn-more-than-those-who-commuteheres-why.html

[4] https://www.bls.gov/news.release/flex2.t01.htm

[5] https://ocio.iowa.gov/broadband

[6] https://ocio.iowa.gov/broadband-availability-map-version-2

[7] https://www.infrastructurereportcard.org/wp-content/uploads/2016/10/ASCE_Brochure-IOWA2019.pdf

Joseph Wilensky is a Master’s Degree candidate in the University of Iowa School of Urban and Regional Planning. He has been an intern at the Iowa Policy Project during the 2019-20 school year.

New solutions needed long term

Federal emergency legislation will make important unemployment insurance reforms on a temporary basis. Iowa — like other states — should make secure and equitable changes permanent.

Current estimates of job losses in the COVID-19 recession are hard to fathom. Even with a sizable stimulus, the national economy would shed nearly 14 million jobs by mid-summer; Iowa is projected to lose more than 140,000.

To make matters worse, as Josh Bivens of the Economic Policy Institute underscores, this recession is “laser-targeted at low-wage, low-productivity, and low-hours jobs in service industries.”[1]

Our most vulnerable workers, in other words, will bear much of the burden: They do not have the option of working from home — a luxury enjoyed by two-thirds of workers in the top quarter of the earning distribution and by one-third of white workers, but by fewer than 1 in 10 workers in the bottom quarter of the distribution, 1 in 5 African-American workers and 1 in 6 Latinx workers. These vulnerable workers face both a much greater risk of unemployment as the service economy shuts down and a heightened risk of exposure to the virus if they keep working.

This is a scale of unemployment and social and economic dislocation that our existing programs are ill-equipped to handle. This demands a policy response — state and federal — unprecedented in its scale, and innovative in its efforts to reach those most affected. At the forefront of that policy response is both a dramatic expansion and a fundamental rethinking of unemployment insurance.

The first step here has already been taken by the federal government. The Families First Coronavirus Response Act (passed March 18) pumped $1 billion into the administration of state unemployment insurance (UI) programs, in exchange for new state standards and conditions. In order to draw down these funds, states must improve their methods of notifying workers of their eligibility for benefits, provide multiple (not just online) methods of filing, provide prompt notice of the receipt of a claim, waive waiting periods for benefits, waive the requirement that recipients be actively searching for work, and ensure that employers are held blameless for COVID-19 layoffs. (Conventionally, UI is “experience-rated” so that employers with histories of layoffs are taxed at a higher rates).

As Peter Fisher pointed out in recent days, Iowa has met all these conditions. There is still a lot of work to be done — not just to meet the current crisis, but to ensure that our unemployment insurance system is recast for the 21st century and ready for the next crisis.

The first task is to make unemployment insurance accessible and available to more workers.

In Iowa, just 41 percent of unemployed workers ever see a benefit check. This is better than the national rate (28 percent), but it is still a scandal that well over half of the jobless are left in the cold. We should sustain the “Families First” Act’s commitment to raising the recipiency rate by streamlining the claims process. Federal and state unemployment law should revise our definition of “employee” to better capture the diversity of employment (including the self-employed, gig workers, and the like) in the modern economy. Too often, workers — cleaners, homecare workers, delivery drivers — are misclassified as “independent contractors” and shut out of basic social insurance programs like UI. The Pandemic Unemployment Assistance Program embedded in the latest COVID-19 stimulus bill provides up to 39 weeks of benefits to those (like the self-employed) otherwise ineligible for UI. This is a start — but the real fix would be to recast the law so that such workers are eligible in good times and bad.

By the same token, we should make permanent the more generous standard for a “good cause” separation, allowing workers — not just in pandemic conditions — to qualify for UI when they leave their jobs for compelling personal reasons. Iowa should make better use of its work sharing program, which allows workers partial compensation for reduced hours, while retaining their attachment to the labor force and their access to job-based benefits such as pensions and health insurance. And we should make benefits available to new entrants to the labor force — students graduating into a recession, returning caregivers, the formerly incarcerated — who deserve support even in the absence of a recent work history.

Second, we need to bolster the size and the duration of the basic benefit. Iowa’s current “replacement rate” is less than 50 percent of current wages — higher than the national average (38 percent) but still woefully insufficient to maintain basic expenses.[2] The logic here, of course, is that a low replacement rate will compel the unemployed to look for work. But low replacement rates (and short benefit windows) create enormous economic burdens and, by pressing workers back into the labor force, actually worsen re-employment prospects. As a baseline, UI benefits should be closer to two-thirds wages. And, for the duration of this crisis, they should be 100 percent. After all, places of employment are under order to close down, and those displaced have few options. This is why the pending stimulus bill bumps UI benefits by $600/week through the end of June.

Finally, we need to improve the funding of state unemployment insurance programs. The $1 billion boost to administration in the “Families First” legislation does not come close to backfilling cuts in federal aid since the 1980s. During the last recession, 36 state UI trust funds went broke — and most of those entered the current crisis with insufficient reserves. Iowa’s trust fund is in better shape than most, but all state funds will be exhausted once this crisis lifts. Under current law, the state only taxes the first $7,000 in earnings. This should be increased dramatically (Social Security taxes the first $137,700), so that revenues are sufficient to sustain UI administration, and pay extended and disaster benefits when needed.

Federal emergency legislation — some in place, some in the pipeline — will install many of these reforms on a temporary basis. But many of the problems being addressed — the accessibility of benefits for deserving workers, the low percentage of the unemployed who receive benefits, the insufficient level and duration of benefits — are broader problems with the UI system itself. Iowa should, of course, do what it can to qualify its workers for extended and enhanced benefits paid for with federal dollars. But it should also follow the lead of other states in making its UI system more secure and equitable on a permanent basis.

[1] Josh Bivens, Economic Policy Institute, “Coronavirus shock will likely claim 3 million jobs by summer,” March 17, 2020. https://www.epi.org/blog/coronavirus-shock-will-likely-claim-3-million-jobs-by-summer/

[2] The inadequacy of this replacement level is compounded by the fact that the benefits are still taxable, and yet they do not count as earnings for purposes of the Earned Income Tax Credit, creating an additional income loss for low wage workers receiving that tax credit.

Colin Gordon is a University of Iowa professor of history and is senior research consultant for the nonpartisan Iowa Policy Project. He has authored several IPP reports since the organization began in 2001. Among these are the State of Working Iowa series, and the October 2019 report “Race in the Heartland: Equity, Opportunity and Public Policy in the Midwest,” for Economic Analysis and Research Network members IPP, Policy Matters Ohio and COWS.