Photo by Anne Wernikoff for CalMatters
Pizzaiolo part owner Donna Insalaco hopes that the business will be able to survive the shelter-in-place order. “We had to lay off everybody that is not a salaried employee,” she said. “We were all crying today.”
In response, local, state and federal lawmakers are proposing—and, in some cases, enacting—new ideas to soften the economic blow for low-income people, including sending cash to people and halting all evictions and foreclosures.
Jessica Bartholow, a policy advocate at the Western Center on Law and Poverty, said shutting down schools and businesses has “really hard consequences that we’re now struggling to address” but if it stems the spread of the virus “the overall outcome for families will be better.”
The economy already has entered a recession expected to continue through September, according to a UCLA Anderson report released Monday.
Who’s most at risk of losing work as the pandemic progresses?
“Low-wage workers broadly. People who are hourly, not salaried. People who work for small businesses, people who don’t have paid sick leave. People who depend on cash coming in the door of their businesses in order to cover their paychecks,” Rothstein said.
About a quarter of California employees do some work from home, according to Census data. But workers in retail, service, manufacturing, agriculture and transportation simply can’t take their work home with them.
About 18% of American adults and 25% of those making less than $50,000 a year, reported last week that they had lost jobs or hours, according to a survey by NPR, PBS NewsHour and Marist of 835 working adults.
Keeping more people from falling into financial catastrophe is all the more important during a pandemic because poverty conditions can compromise people’s health and compel them to work when it’s safer for them to stay home, causing viruses to spread faster.
“California’s one of the best places to weather these storms,” Bartholow said. “I think the question about whether each decision made will increase inequality will be considered.”
Here’s a breakdown of the state and federal proposals under consideration:
Immediate cash and tax relief
The White House announced plans to send cash payments directly to Americans to replace lost wages over the next two weeks, as part of a $1 trillion stimulus proposal. The plan includes $500 billion for two waves of direct payments to taxpayers on April 6 and May 16 that would vary by household income and size. Another $300 billion would help small businesses meet payroll, the New York Times reported. Politico reported that the checks could amount to $1,000 each.
“We want to make sure Americans get money in their pockets quickly,” Treasury Secretary Steven Mnuchin said on Tuesday.
Senate Democrats are pushing their own proposal: immediate $2,000 payments to all adults and children in the US below a certain income threshold. If enacted, people would get a second check for $1,500 in July and a third for $1,000 in October if the public health emergency continues.
U.S. senators are reportedly working on a stimulus package aimed at providing relief for small and large businesses. The U.S. Small Business Administration is offering low-interest federal disaster loans to California small businesses that suffer as a result of coronavirus.
Additionally, the Internal Revenue Service has delayed the deadline for taxpayers and businesses to pay their taxes to July 15.
On Wednesday, Newsom signed an executive order extending the eligibility period by 90 days for Medi-Cal, food stamps, welfare and in-home supportive services.
Bans on evictions, foreclosures and utility shut-offs
President Donald Trump announced Wednesday that he would suspend foreclosure and evictions for single family homeowners with federally backed mortgages until the end of April.
From Sacramento to Los Angeles, large cities across the state enacted their own local moratoria on evictions related to coronavirus.
On Monday, Newsom issued an executive order that waives a section of the state civil code, clearing the way for more localities to ban residential and commercial evictions related to coronavirus through May 31. The order also asks banks and other financial institutions to halt foreclosures.
Newsom also instructed the California Public Utility Commission to monitor how utilities are protecting customers from power, water, cell phone and internet shutoffs. Already the state’s largest power utilities, serving more than 21 million Californians, have voluntarily done so. Comcast is providing 60 days of free basic internet service to new customers.