The COVID-19 hazard continues, but the hazard pay does not: Why Americas essential workers need a raise – Brookings Institution

ContentsIntroduction

The United States has entered a third peak of the COVID-19 pandemic, with cases spiking across the country. Many experts anticipate that the winter months will be the worst yet, and a new study projects that the U.S. could surpass 500,000 COVID-19 deaths by the end of February. As we begin this even deadlier phase of the pandemic, the countrys 50 million frontline essential workers are among the most vulnerable. Are they receiving fair compensation for the worsening hazards they face on the job?

In this report, we look at the state of hazard pay for COVID-19s frontline essential workers. We follow up on the recommendations we made in our April report, which called on Congress to pass federally mandated hazard pay. At the beginning of the pandemic, the prospects of hazard pay were bright; in April, the House of Representatives passed legislation to create a $200 billion hazard pay fund, while dozens of large companies were offering small, temporary hourly pay bumps and bonuses to frontline workers.

Seven months later, those hopes have largely been dashed. While the hazards of COVID-19 are growing worse, few frontline essential workers are receiving any hazard pay at all. Most large retail employers ended temporary pay bumps months ago, despite many companies earning record sales, eye-popping profits, and soaring stock prices. After facing strong resistance in the Republican-controlled Senate, House Democrats dropped their hazard pay proposal from their revised legislation in September. Innovative hazard pay initiatives by state governments have been among the few bright spots, but the scale of these efforts is small compared to the need.

The failure of the federal government and most employers to provide hazard pay is especially detrimental to low-wage workers, who comprise nearly half of all frontline essential workers. As the pandemic-fueled recession deepens, many of these low-wage workers face additional financial hardship on top of elevated risks of infection. Nearly half of these low-wage frontline workers are nonwhite, with Black and Latino or Hispanic workers overrepresented among critical jobs that pay less than a living wage.

Deeply rooted policy failures and structural problems underpin these inequitiesfrom a woefully inadequate minimum wage, to systemic racism, to the long-term erosion of worker power. Hazard pay is an immediate stopgap measure to ensure frontline workers earn a living wage as they shoulder extreme burdens. Its a down payment on what should be permanent, lasting change through an increased minimum wage. Heres how it can be done.

The COVID-19 pandemic has upended traditional notions of what jobs are considered dangerousand essentialas well as what workers who hold those jobs deserve to earn. Hazard pay is additional pay for performing hazardous duty or work involving physical hardship; previously, it was associated with dangerous jobs in military service, construction, or mining. Today, jobs as diverse as bus driving, warehouse jobs, and grocery work now expose employees to the deadly risks of COVID-19. Our colleagues Adie Tomer and Joseph W. Kane calculated that there are 50 million frontline workers who are in essential jobs and must physically report to work, making them vulnerable to COVID-19.

Hazard pay is a popular response to the risks that frontline essential workers face. In a May survey, more than three-quarters of Americans surveyed supported providing hazard pay or additional compensation to workers in essential jobs.

Hazard pay is also popular among frontline essential workers themselves. I believe that people who have sucked up their fear every day and marched through that door, not knowing whether today would be the day they would catch it, deserve recompense for that, said Lisa Harris, a 32-year-old cashier at a Kroger supermarket outside Richmond, Va.

Since the start of the pandemic, we spoke with dozens of frontline essential workers from a range of industries who expressed a strong desire for hazard pay while putting their lives on the line every shift. Many workers said they deserved hourly wage increases, and preferred predictable pay increases in each paycheck similar to overtime or holiday hours, rather than occasional bonuses that fail to compensate workers for each additional hour worked.

It should be an hourly raise for the duration of the pandemic, said one Walmart associate who preferred to remain anonymous, reflecting on the periodic bonuses Walmart workers receive. Because for a lot of these people working out there, four or five days a week, eight hours a day, risking their lives so much given how the virus is spreading in the country, $2 to $3 extra an hour is a start. I dont know if it is the answer, but it is a lot better than what we are getting now.

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The case for hazard pay is especially urgent for the millions of frontline essential workers who earn low wages. From certified nursing assistants to housekeepers to farm laborers, the essential jobs that are vital to the country and require workers to risks their lives are disproportionately low-paying. We calculate that, as of 2018, nearly half (47%) of all frontline essential workers earned less than a living wage that can sustain a family.

Daryll Cox, a poultry plant worker in Virginia, is one of the nearly 19 million frontline essential workers who earn less than $15 an hour. In an interview this summer, Cox, who is Black, discussed the hardships of his job during the pandemic.

Its been a challenge for everybody, Cox said. We work around 600 people a night in a packed environment. You just have to pray and believe and hope that the person that youre working next to is not infected. He said the fear of not knowing causes great anxiety, wondering if the person working just inches away from you has it, being scared if somebody coughs or sneezes.

Cox said he enjoys his job, but laments the low wages he earns. Workers at his plant typically make $12 to $14 an hourconsiderably less than a living wage. After paying taxes and insurance, Cox said there is little left to pay bills and support a family. He said that even a small hazard pay increase would make a difference.

Were not making much, Cox said. If you add $2 to $3 an hour, youd get at least $15. To be in this environment with all the money that we know the company makes, I dont think it would set back the company at all to at least show us appreciation by giving us a $2 to $3 raise. This is the sentiments of at least 85% of other employees.

Hazard pay is one way to immediately correct the financial injustice for frontline essential workers who risk their livesand their families liveswithout the dignity of wages that can support them. But it is ultimately a stopgap measureessential workers low wages reflect long-standing policy failures and illustrate the need for permanent reforms.

For over a decade, the federal minimum wage has remained stuck at $7.25 per hour, a wage so low it would put workers earning it below the poverty line. Meanwhile, there is overwhelming public support to raise it to $15 per hour. Frontline workers earning paltry wages deserve permanent pay increases and lasting changes to these policy failures. In the interim, hazard pay can make an immediate difference in their lives during the pandemic.

33%

Source: Brookings analysis of Department of Homeland Security, Bureau of Labor Statistics, and Emsi data

During our national reckoning over structural racism and inequality, hazard pay can also help address racial equity. Black and Latino or Hispanic workers are overrepresented among low-wage frontline essential workers. In 2018, Black workers comprised 13% of all U.S. workers, but made up 19% of all low-wage frontline essential workers. Latino or Hispanic workers comprised 16% of all U.S. workers, but 22% of low-wage frontline essential workers.

Millions of Black and Latino or Hispanic essential workers hold critical but undervalued jobs in caregiving and health care, cleaning, and other services, often earning poverty wages with few (if any) benefits. Hazard pay targeted to low-wage essential workers would disproportionately benefit workers of color, who too often are excluded from decent-paying work.

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The COVID-19 recession has pummeled workers with the lowest wages, especially Black and Latino or Hispanic workers. Low-income workers have suffered the worst job losses in the pandemic. More than half (51%) of households earning under $50,000 have experienced employment loss during the pandemic. These job losses have further strained already limited household finances and increased food insecurity. In a recent survey, nearly half of low-wage workers reported having trouble paying bills and about a third had trouble paying their rent or mortgage.

This is the case for Yvette Beatty, a 60-year-old home health aide in Philadelphia, who is Black. Two of her children lost their jobs in the pandemic recession. One moved back in with her. Now, Beatty is the sole provider for her family of seven. Even though she is scared as heck working during the pandemic and fears bringing the virus back home to her family, she feels she has no choice but to keep working. But she is barely surviving on just $12.75 an hour.

Its very hard, Beatty told us. Thank God for noodles. We are eating just what we can right now. Like a disproportionate share of low-income workers, Beatty has several underlying health conditions that put her at greater risk from COVID-19. Due to her financial struggles, her health has suffered during the pandemic. She said she sometimes skips a day of her medicine to stretch it further, and cant afford to eat the healthy foods recommended for her diet. I know I am supposed to eat certain things, but I would rather give to my family than to myself, she said.

Beatty wishes the federal government would come to the aid of frontline workers like herself: Youre telling me, before you pushed out trillions of dollars, you couldnt push out money for us? You couldnt push it out for these people who are on trash trucks, mopping floors, picking up biowaste, who are home health aides? Even for some of the nurses and doctors?Its time to wake up and recognize us.

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In Congress, Democratic and Republican proposals for federal hazard pay started ambitious, but languished in the Republican-controlled Senate, with little prospect of being passed into law.

In April, Democrats in Congress proposed hazard pay legislation to provide generous compensation to essential workers across the public and private sectors. This $200 billion Heroes Fund was part of the original $3 trillion HEROES Act passed by the House on May 15. Through the fund, eligible workers would receive up to $25,000 in pandemic premium pay through the federal governmentequivalent to an extra $13 per hourfrom the start of the public health emergency until the end of the year. The eligibility requirements of the fund were expansive, including even highly paid essential workers such as doctors. Essential workers earning up to $200,000 a year (or approximately $100 per hour) would be eligible for the full amount of up to $25,000, while workers earning over $200,000 would be eligible for a smaller amount of $5,000.

In May, Senator Mitt Romney (R-Utah) proposed a narrower Patriot Pay proposal for a temporary bonus of up to $12 per hour. Compared to the Democrats proposal, Sen. Romneys proposal included a lower income cap (annual incomes up to $50,000 could receive the full amount and incomes up to $90,000 would receive a smaller amount), a shorter timeline (May 1 through July 31), and only some of the money (three-quarters) coming from the government and the rest from employers. Sen. Romney explained that the legislation would address the risks that frontline essential workers face as well as the anomaly of some essential workers earning less money than unemployed workers receiving enhanced unemployment benefits.

Many Republicans in Congress expressed little interest in either hazard pay proposal, and neither has been passed into law. After House Democrats passed their $3 trillion HEROES Act, Senate Republicans introduced a smaller, $1 trillion HEALS Act in July. That bill did not include any hazard pay for essential workers. It also excluded new state and local aid, which would shore up struggling state and local government budgets with the funds necessary to keep public sector frontline essential workers employed. The result was dimmed prospects for any federal hazard pay. On September 28, House Democrats introduced an updated, leaner version of the HEROES Act which did not include the original Heroes Fund for hazard pay for essential workers.

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While hazard pay from the federal government has stalled, several state governments have leveraged federal relief funds to introduce innovative hazard pay programs. Most of these state-level programs have a strong equity focus and prioritize frontline workers who earn low and moderate wages. While their approaches are promising and can serve as a model for national scale, the reach of the state programs is relatively modest compared to the need. A typical state-level hazard pay program benefits tens of thousands of workers out of a total of 50 million frontline essential workers nationwide.

Three statesPennsylvania, Vermont, and Louisianaleveraged federal CARES Act relief funding to finance hazard pay for a broad swath of essential frontline workers in their states, including both private and public sector workers. All three states leveraged $50 million in federal CARES Act funding to finance the pay increases.

Pennsylvania

One-time payment up to $1,200 per worker

Funded by $50 million from CARES Act

Public and private employees in seven critical industries

Full-time and part-time employees earning less than $20 per hour

Employers apply, equity focus

41,587 workers supported through grants to 639 employers

More than 5,000 employers were eligible, totaling $900 million in costs; less than 10% of that need was met

Vermont

One-time payment of $1,200 or $2,000 per worker

Funded by $50.5 million from CARES Act

Public and private employees in essential services that deal with the public. First-round eligibility limited to mostly public sector workers.

Second-round eligibility was expanded to include grocery, retail and other private sector workers

Employees earning $25 per hour or less and working in a job with an elevated risk

Employers apply; first-come, first-served

15,650 workers supported through first-round grants to 370 employers

Second round of grants opened on October 28

Louisiana

One-time $250 payment

Funded by $50 million from CARES Act

Public and private employees in critical industries

Adjusted gross income of $50,000 or less

Worked at least 200 hours from March 22 to May 14

Individuals apply

Checks sent to 100,000 workers as of September 4

Nearly 114,000 more applicants waiting as of September 4

Pennsylvanias COVID-19 PA Hazard Pay Grant Program is an especially promising model. To date, the grant funds provided more than 40,000 frontline workers with the equivalent of a 10-week, $3 per hour raise. Eligibility was limited to workers earning less than $20 an hour in essential industries. The $50 million program was only able to meet about 10% of the needs of the applicants, so it applied a strong equity lens to focus the limited funds on the greatest need. The program prioritized workers that are the lowest-paid, face the highest COVID-19 risks, and have the least opportunity for other federal support. Home health aides, nursing home workers, and other care providers were among the biggest beneficiaries. Pennsylvania Governor Tom Wolf recently called on state legislators to provide additional funding from the states federal relief money to expand the program. (Gov. Wolf has also advocated unsuccessfully for the state legislature to raise Pennsylvanias minimum wage from the current $7.25 per hour.)

Several other states leveraged federal relief dollars to provide hazard pay to a narrower set of frontline essential workers in public-sector-funded industries such as first responders, home health aides, and caregivers.

$3.13 per hour pay raise

Costs about $3.7 million every two weeks

Public employees in 24/7 jobs such as law enforcement, correctional officers, and hospital employees

15,000 employees eligible originally

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The COVID-19 hazard continues, but the hazard pay does not: Why Americas essential workers need a raise - Brookings Institution