Building an Economy that Works for Everyone

Getting Washington through COVID-19 Requires Big Changes

With unemployment likely to exceed 20 percent, we need to protect Washingtonians

When your friend is sick, running a temperature of 103, coughing, sweating, and vomiting, do you leave her $200 and think that will is enough for her get better? No, that wouldn’t be enough. Neither is the federal government’s plan to send out $1,200 checks. 

To get better, your friend needs tender-loving care, health consultations, health care, the proper medications, the right kind of food, and some good air. And she needs hope.

We can think about this from a macro-level perspective concerning the COVID-19 pandemic and the priority for government services. 

First Things First: Stepping Up to Health Care and Coverage 

To restore economic health, we need to treat the underlying cause of the recession, soon to be a depression. That means that we must make tremendous investments in health care. It doesn’t matter which combination of systems are advanced (so let’s put ideology aside), but we must cover all residents in our state and country.

We will need:

  • Immediate expansion of Apple Health (Washington State’s version of Medicaid),
  • Support for workers on Unemployment Insurance to pay for premiums in their employer’s plan or to buy on the Exchange,
  • Increased enrollment in the Health Benefit Exchange’s qualified health plans, and federal and state money to decrease premiums, deductibles, and out-of-pocket costs,
  • Increased funding and decreased premiums for Medicare,
  • COVID-19 testing and care for patients completely covered by the government, and
  • Coverage for all of us – that means all of us: all residents in our country.
Ensuring Economic Security and Job Security

We must also remediate the underlying social and economic determinants for health. This entails ensuring incomes which enable people to buy groceries, pay for utilities, internet, rent and mortgages, outstanding loans, child care, tuition, transportation and transit … all activities essential for wellbeing. 

With unemployment likely to exceed 20 percent in the next few months, we need to ensure that our unemployment insurance funding is robust and restrictions are removed so that it is available to everyone who loses work due to this crisis. Governor Inslee has taken the lead in making sure that our unemployment system is not punitive, that we don’t require claimants to search for work that doesn’t exist, and that we enable and encourage shared work programs to stabilize the workforce.

We need to make sure that all businesses that can still operate provide ample paid sick leave and support their employees’ health and well-being throughout this period of emergency.

For the federal government to enable income stabilization, we need immediate cash assistance for the 70 percent of American households with incomes under $100,000. We could step this up and down by income, delivering $10,000 in cash assistance to those households with income under $50,000, $7,500 in cash assistance to those households with income between $50,000 and $75,000, and $5,000 in cash assistance to those households with income from $75,000 up to $100,000. We need to universalize paid family and medical leave and paid sick days. 

We need substantial support for small businesses so they can reopen and help get our economy going again. Specifically, we need direct subsidies to businesses impacted by COVID-19, to enable them to cover immediate business expenses to keep their door open and employees paid (payroll, health insurance premiums, paid sick time, rent). The federal government should provide progressive levels of support based on company size and impact. We also must make sure that businesses provide payroll documentation to ensure funding is getting to their employees.

What We Don’t Need

We will continue to see the stock market fall. But keep in mind that the Dow Jones average today is the same as it was in October 2016. It is still about 66 percent higher than in 2011. With consumer demand very depressed, home sales tailing off, and lay-offs accelerating, we can expect the stock market to fall a lot more. But that doesn’t cause economic recession, instead it is the result of economic recession.

The stock market is a single indicator that doesn’t impact the majority of Americans directly. We can’t fix this pandemic by bailing out Wall Street (which has been raking in the big bucks lately) or by cutting taxes on employers. Any federal support for large businesses must be contingent on maintaining workers on payroll with health insurance and extended guaranteed sick leave – it can’t go to CEO salaries and stock buybacks.

Determining The Resources We Need to Pay for Health, Employment and Economic Security

Altogether, these measures add up to almost $1.5 trillion a year. That is just about what the Trump Administration and the then-Republican Congress gave away, primarily to the wealthy, with their 2017 tax cut. Congress could immediately reverse that tax cut and increase taxes on the affluent, with a 91 percent marginal tax on income above $1 million. That’s what we did in World War II and that is what we should do now.

We should also consider, at both the state and federal levels:

  • corporate taxes on excessive executive compensation,
  • ramped-up estate taxes,
  • ramped-up income taxes on the affluent,
  • wealth taxes,
  • inheritance taxes, and
  • payroll taxes above the Social Security ceiling of $137,700.

None of these taxes will, by itself, make up for the revenue shortfalls we can expect. They all will generate much less revenue than they would have three months ago. But together, a full menu of such taxes on the affluent will ensure public services for all of us without further impinging upon the already fragile economic status of American families. 

We can get through this pandemic by first stopping the spread of COVID-19 infection. We must remember and act upon the causal chain which confronts us: to regain economic wellbeing, we must first guarantee physical and mental wellbeing for each and every one of us, including security from COVID-19. And to realize a future with a good shared quality of life for all, we must insure the economic wellbeing of each and every American household. This is not a choice. This is an imperative. 

  • Leave a Reply
    • Anne

      What about us childcare workers? We are expected to stay open. And our wages are not good-

      Mar 20 2020 at 5:46 PM

    • Economic Opportunity Institute

      We are working on it! We are working with the Legislature and the governor to improve childcare workers’ pay and working standards in this crisis.

      Mar 23 2020 at 3:39 PM

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