Coronavirus is coming for your job. The spread of death and carnage from the coronavirus pandemic is mirrored by its ravaging effects on the world economy. Each passing day sees businesses hitting the end of their cash flow and making very difficult decisions to release or furlough workers. And it’s not just small businesses, household names are also folding. Norwegian Airlines. Nieman Marcus.
Some governmental systems are better than others at handling the human toll. Places like Western European countries with generous social safety nets means that people who lose their jobs do not lose their livelihoods. Businesses pay very high salary tax rates in order to provide a level of social stability. These schemes are designed to limit the precarious nature of capitalist employment. That combination is proving particularly prescient for a situation like today’s pandemic.
Contrast that with the high-flying and risk-taking American system. America is all about self-responsibility. Taxes are low, labor laws lax. You earn better but you have to make sure you can provide for yourself. It’s capitalism unchained. Unemployment programs exist there too, but the combination of at-will contracts (your company can fire you for whatever reason whenever it wants with no compensation) and the fact that so many Americans are living paycheck to paycheck have put an incredible strain on a system that is not designed for it. Just look at these numbers:
Stimulus packages, like America’s $2 trillion dollar version, are on the way. But where will this money go and who will ultimately pay for it? Corporations who have been spending the last decade milking profits through outsourcing and reducing labor costs by using contractors to avoid calling them employees will receive billions of dollars of aide. Families will get a one-time check in the mail for about $1000.
These are the same corporations who use the country’s top tax firms in order to pay as little tax to the government as possible. Do you think that they will be the ones who will shoulder up and assume the burden of repaying the stimulus? No, that responsibility will fall on tax payers, the very same ones who corporations shed like dead weight as soon as things started to get bad.
And as soon as desperation sets in, the corporations will gain again. After two months of being broke people will have little choice but to accept whatever work is available. Corporations will hire back workforces and pay them less than they did before, ostensibly claiming that it’s “the best they can do.”
Let’s not forget debt. Borrowing is already a problem whether it’s credit cards or student loans. It is a burden even in the best of times. People will still have to service many of those debts as they lose their jobs. In many cases they will have to borrow more in order to make ends meet until the situation improves. Couple the coming increase in personal debt and the trillions of dollars that we will have to plug in the coming years – most likely at the expense of bulking up the very social programs that should have been in place to prevent a catastrophe like this from happening – and it becomes clear that the coronavirus has exposed the ugly reality of American capitalism. One where very few rake in fabulous wealth while so many others pick up the scraps.
White collar workers work remotely on their computers and collect their full paychecks while the replaceable “essential” workers find themselves out of a job. Small businesses will go under, people will have to sell property, and who will swoop in? Those who already have wealth. Buyers will run the show. The coronavirus is accelerating the concentration of wealth from the many to the few.
But even white collar workers shouldn’t be complacent. Many are over-leveraged and rely on cash flow to keep their books balanced. Coronavirus doesn’t care how much money you make. If many big companies fall, there will be a lot of high earners who find themselves on hard times too. Consultants are particularly vulnerable since they tend to get axed before salaried employees. It all depends on how long this lasts.
One thing that the two working classes have in common is that in America healthcare coverage comes primarily through your employer. While I’m sure that whoever came up with this idea thought that it was a brilliant alternative to a public system that so many on the right oppose, it was always absurd (why should a restaurant owner have to be versed in healthcare policies? She should be focusing on her business and her food.) Having healthcare limits the employee mobility that so many in America tout as a legitimate reasons to have no employment protection because people hesitate to change jobs if they are unsure about future coverage. But coronavirus has shown just how dangerous this approach is. When a health crisis hits the entire nation the economy has no choice but to partially shut down, as we are seeing. That means that people lose the very jobs that are supposed to provide the coverage for the care they need to fight the health crisis in the first place.
If America chooses to do nothing in the face of the pandemic, that is to say implementing no livable federal minimum wage, no tax raises on corporations, no debt forgiveness, no public healthcare programs, and no shift in employment protection, the coronavirus will have handed yet another victory to the 1% while leaving lasting symptoms for the working class to live with. Some of which might prove fatal.
Coronavirus is a wake up call. Now America must get out of bed.
Tony Hymes 