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Congress must fill the leadership void

Congress must fill the leadership void
© Bonnie Cash

President TrumpDonald John TrumpTrump rages against '60 Minutes' for interview with Krebs Cornyn spox: Neera Tanden has 'no chance' of being confirmed as Biden's OMB pick Pa. lawmaker was informed of positive coronavirus test while meeting with Trump: report MORE is promising a swift and seamless economic recovery if only the states will hurry up and lift their stay-at-home orders. “Those jobs will be back and they’ll be back very soon,” he said, reacting to last month’s horrendous spike in unemployment.

This is fantasy. Besides ignoring the health hazards of prematurely reopening the economy, Trump is raising false hopes among millions of U.S. workers whose jobs have vanished in the COVID-19 crisis.       

In fact, getting everyone back to work once the pandemic is contained will be a huge challenge. It will happen in stages, not all at once, and it will require a well-focused national push to help less-educated and low-wage workers find new jobs, skills and careers.    

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Unfortunately, the Trump administration seems as woefully unprepared to grapple with this urgent task as it was to check the pandemic’s spread. That means Congress will have to deliver what we need: A full-scale, full-employment initiative in which the federal, state and local governments work in tandem with the private sector to upskill displaced workers, match them to openings in fast-growing sectors and lower obstacles to starting a business.

In just two months, more than 36 million Americans have lost their jobs. It’s a staggering number, and it has revealed a new class divide between better educated people who can telework from home, and those who can’t. When businesses start reopening (and schools too, since parents can’t go to work if their kids are stuck at home), most furloughed and laid-off employees will be able to return to their former jobs. But a sizable minority – disproportionately black, Latino and low-income workers – won’t have jobs to go back to. 

Many small businesses have gone under, and millions more are treading water. “Data from credit-card processors suggest that roughly 30 percent of small businesses have shut down during the pandemic,” reports the Atlantic’s Annie Lowry. A survey by Main Street America found that 7.5 million small businesses are likely to close permanently if the shutdown continues for 3-5 more months. As many as 40 percent of the shutdown-induced layoffs could become permanent, according to a University of Chicago study.

Meanwhile, large companies in sectors hit especially hard by social distancing – travel and tourism, restaurants and hotels, energy production and manufacturing, and brick and mortar retail – are leery of staffing up until demand fully revives. The COVID-19 crisis also is likely to accelerate automation as companies seek a technological hedge against future health-related shutdowns.

It’s true that companies that have stayed open, such as Amazon, Walmart and CVS, have been adding workers at a rapid clip during the shutdown. But such “essential” firms won’t be able to absorb anything like the estimated 13 million workers whose jobs are likely gone for good.

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The longer those workers languish in unemployment, the worse off they will be — and the longer it will take for our economy to snap back. Prolonged bouts of joblessness make it difficult for displaced workers to get past employer screens and hiring algorithms. Meanwhile, their skills atrophy, self-esteem evaporates, family stress rises. When the unemployment checks stop coming, they risk losing their homes and ruining their credit if they can’t pay their bills.

We can’t let this happen to millions of our fellow citizens who have sheltered at home for months, doing their part to prevent COVID-19 from metastasizing and overwhelming local health care systems.

For starters, Congress should stop the bleeding by providing direct wage subsidies to employers who agree not to lay off workers. The House’s just-passed Heroes act includes a creative proposal by Rep. Stephanie MurphyStephanie MurphyWhy it's time for a majority female Cabinet Democrats scramble on COVID-19 relief amid division, Trump surprise Bank lobbying group launches ad backing Collins reelection bid MORE (D-Fla.) to provide payroll subsidies to businesses whose revenues fall by more than 10 percent. But the $3 trillion bill otherwise doesn’t do enough to prevent the surge of mass layoffs that is propelling us toward a 25 percent jobless rate.

Lawmakers also should gradually phase out the expansion of unemployment insurance benefits included in the CARES Act as the economy recovers, rather than expiring arbitrarily on July 31. This would convert the UI program into an “automatic stabilizer” to counter future downturns, while also making sure that work pays better than unemployment.

Washington should invest heavily in retraining workers who lost jobs due to the pandemic and need to jump career tracks. For example, Congress should revive a Great Recession-era program (Trade Adjustment Assistance Community College and Career Training) that funneled money into high-quality education and career training efforts run by community colleges and employers.

Government can’t do this job alone. To scale up a full-employment drive and achieve “speed to job,” Ryan Craig of University Ventures proposes that the federal government enlist thousands of private staffing firms and business service providers. It should create strong incentives for these private intermediaries to hire displaced workers, help them acquire new skills and place them with employers in “outsourced apprenticeships” that can lead to permanent jobs.

A full-employment drive also should stimulate new business creation. Congress should pass the New Business Preservation bill, crafted by pro-growth Democrats Sens. Amy KlobucharAmy KlobucharHillicon Valley: YouTube suspends OANN amid lawmaker pressure | Dems probe Facebook, Twitter over Georgia runoff | FCC reaffirms ZTE's national security risk Democrats urge YouTube to remove election misinformation, step up efforts ahead of Georgia runoff YouTube temporarily suspends OANN account after spreading coronavirus misinformation MORE (D-Minn.) and Chris CoonsChris Andrew CoonsDemocrats face increasing pressure to back smaller COVID-19 stimulus Biden rolls out national security team Democrats brush off calls for Biden to play hardball on Cabinet picks MORE (D-Del.) and Rep. Tim RyanTimothy (Tim) RyanHouse Democrats introduce bill to invest 0 billion in STEM research and education Now's the time to make 'Social Emotional Learning' a national priority Mourners gather outside Supreme Court after passing of Ruth Bader Ginsburg MORE (D-Ohio), which would channel $2 billion to support public-private venture lending partnerships around the country.

In short, it will take hard work and hard thinking to get all Americans working again. The president, fixated on conspiracy theories, is otherwise occupied, so the leadership will have to come from Congress.

Will Marshall is president and founder of the Progressive Policy Institute (PPI).