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US: Address Impact of Covid-19 on Poor

Virus Outbreak Highlights Structural Inequalities

A restaurant employee with her son leaves with her paycheck, in Brooklyn, New York, March 19, 2020. The restaurant company, which has closed its four locations due to the coronavirus, laid off 650 of 850 employees.  © 2020 AP Photo/Mark Lennihan

(New York) – The COVID-19 outbreak in the United States has put a spotlight on economic inequalities and a fragile social safety net that leaves vulnerable communities to bear the economic brunt of the crisis, Human Rights Watch said today. US policymakers will need to consider these underlying inequalities in responding urgently to the mounting challenges of the pandemic.

While the virus infects people regardless of wealth, the poor will be most affected due to longstanding segregation by income and race, reduced economic mobility, and the high cost of medical care. Low-income communities are more likely to be exposed to the virus, have higher mortality rates, and suffer economically. In times of economic crisis, these vulnerabilities will be more pronounced for marginal groups – identified by race, gender, and immigration status.

“The US government needs a response to the coronavirus that prevents people from having to choose between a missed paycheck and risking their and their families’ health,” said Lena Simet, senior poverty and inequality researcher at Human Rights Watch. “The government should target its economic stimulus packages to the low-income communities that will be hit first and hardest, and ensure an adequate standard of living for all.”

Low-income jobs in fields like retail, hospitality, childcare, and the gig economy cannot be performed remotely, and in the US the majority do not offer paid sick leave or health insurance. Research has shown that low income is associated with higher rates of chronic health conditions such as diabetes and heart disease, factors that increase vulnerability to COVID-19. Most of the 40.6 million people living in poverty in the US have no savings to weather a lack of income, and even stocking up on food can represent an impossible financial hurdle.

In the US, economic inequality is closely linked to a racial divide in income and wealth. Incomes and wealth are lower, and poverty is most acute among Blacks and Latinos. About 21 percent of Black people and 18 percent of Hispanic people live under the poverty line, compared with eight percent of white people. The median white household has 41 times more wealth (measured as the sum of assets held by a family minus total household debt) than the median Black family and 22 times more than the median Latino family. Past recessions have disproportionally affected Black and Latino families, partly because they have less wealth to fall back on.

Due to the lack of resources to prepare and protect against the coronavirus, the poor face a higher risk of contracting and subsequently spreading the virus. Under international human rights law, the government has an obligation to protect people’s right to an adequate standard of living, which includes ensuring adequate food and nutrition, the highest attainable standard of health, and social security.

The Families First Coronavirus Response Act, which was passed by the US House of Representatives and the Senate, is intended to address the effects of the coronavirus and provide a safety net for families and workers whose livelihoods are affected. Human Rights Watch is concerned that the legislation guarantees sick leave to only 20 percent of private-sector workers, because companies with more than 500 employees are exempted, and those with fewer than 50 employees can apply for exemption. Many workers at large restaurant chains, supermarkets, and retailers who fall in these categories and often have low-wage positions thus remain unprotected.

The US government has also considered large payroll tax cuts and bailouts to the airline, hotel, and shale industries. Such responses are expensive, with little or no direct benefit for most working people. The Institute on Taxation and Economic Policy estimates that eliminating the payroll tax would largely benefit the richest 20 percent of taxpayers, and the benefits going to the poorest 20 percent would make little difference in meeting their needs.

Moreover, payroll tax cuts would not benefit people without income, who are furloughed, or whose working hours have been cut in response to COVID-19. Unauthorized and informal workers, like street vendors, caregivers, or construction workers, would also be left out. And even workers who would benefit from the tax cut would only receive an amount proportionate to their low income, which would be insufficient to protect them from falling behind on rent or mortgage payments.

The US government’s most recent proposal is to send checks directly to everyone living or legally working in the US, except those making more than $1 million a year, by the end of April. Direct payments are intended to provide immediate help to workers who lost their jobs or have hours cut back as economic activity contracts from social distancing measures.

While immediate income support is important, long-term and targeted support will be needed, Human Rights Watch said. If the crisis prevails for several months, one-time income support will not prevent families from facing foreclosure or eviction. For people working remotely, direct checks are less crucial than for those who lost jobs but are not eligible for unemployment benefits. Checks also won’t reach the eight million unauthorized workers in the US, who generally earn low wages in restaurants, hotels, and on farms.

The government should consider a response that would support all low-income workers and people who have lost wages. Direct payments should be accompanied with assurances that people can get child benefits and disability and social security benefits in the event of unemployment, sickness, or other lack of livelihood in circumstances beyond their control.

“The US government policies proposed so far have yet to take into account existing social and economic inequalities,” Simet said. “The government should strengthen the safety net to protect millions of people who face devastating job and wage loss and inability to pay essential bills. Unless the stimulus package tackles those issues head on, it won’t protect those most in need, and that is bad for everyone in America.”

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