Pandemic Programs Worked, So Business Elites Killed Them Off
To prevent economic collapse amid the Covid-19 pandemic, the government unleashed the power it always had. New programs caused hunger, evictions, and child poverty to plummet. Why not just continue them? Because employers thrive on desperation.
Clementine Gallot / Flickr
There is an enduring perception that the United States is an individualistic nation whose people oppose collective guarantees to the basic necessities of life. This perception is false.
Look at, for example, the overwhelming popularity of our Social Security program and the guarantees of free public education contained in every state constitution; the United States already has some well-established economic rights that are deeply woven into the fabric of our society. Public opinion polls in recent years show strong majorities in support of recognizing and enforcing housing and health care as human rights and calling for the government to do more to address food insecurity. Most Americans have long supported a government jobs guarantee.
So what is stopping us? Corporations and wealthy individuals who deploy their de facto unlimited ability to fund campaigns and lobby lawmakers to crush economic support programs.
Part of their motivation is to preserve and expand the benefits of some of the lowest corporate tax rates in the world. But the wealthy’s main goal in opposing economic support programs is something else altogether: maintaining a steady supply of people desperate enough to accept work at sub-poverty wages.
The most recent, striking example was the undermining of the enormously successful economic programs created in response to the devastation of the COVID-19 pandemic.
“Devastation” is not too strong a word. During 2020, more jobs were lost than at any time in the eighty-plus years of recorded US history — and more than the next two highest job-loss years combined. The US system connects health care to employment, so those job losses were accompanied by cancellation of health care and a rise in hunger. Waves of evictions and foreclosures were looming.
Yet by 2021, not only was disaster averted, but the percentage of US people and children living in poverty actually dropped to the lowest in recorded history. Evictions plummeted. Millions fewer children were going hungry than before the pandemic.
This was no miracle. It was the US government unleashing the power it always had — and still has today — to ensure that basic needs are met, and that no one in this country be homeless, go hungry, or endure without the health care they need.
Immediate, Dramatic Success
In March 2020, the Trump administration and Congress quickly passed legislation that created and expanded lifesaving and life-changing programs, many of which were extended and improved in the early months of the Biden administration. First, they addressed unemployment insurance, which is notorious in the United States for payments that are too small to survive on and difficult to qualify for.
The CARES Act (Coronavirus Aid, Relief, and Economic Security Act) supplemented weekly unemployment benefits by $600 a week initially and then $300 a week. It provided benefits to former independent contractors or part-time workers who were previously ineligible and extended the length of benefits coverage.
The hits kept coming. In September 2020, the US Centers for Disease Control issued a moratorium on most evictions. In 2021, the American Rescue Plan Act increased the Child Tax Credit to $3,600 for children under six years old and $3,000 for children ages six to eighteen. During the same period, the United States provided extra food benefits through the Supplemental Nutrition Assistance Program and halted the red-tape trap of Medicaid eligibility recertification that routinely kicks people off of the health care program.
The impact was immediate and dramatic. The likely economic catastrophe for millions of households was not only averted, but the number of children living in poverty had the largest single-year drop ever to a record low of 5.2 percent. The Child Tax Credit expansion alone kept over two million children out of poverty. The number of families experiencing hunger and falling behind on their mortgages and rent was dramatically reduced. The CDC eviction moratorium cut eviction filings by more than half.
Low-Wage Capital Strikes Back
Who could possibly not cheer for results like this? Well, for one, billionaires who require people to be struggling enough that they are willing to be Domino’s Pizza delivery drivers.
“The real pinch point in the business is drivers,” Domino’s CEO Ritch Allison complained to shareholders in early 2021, blaming “high government stimulus checks” for the dearth of delivery drivers. In my hometown of Indianapolis, those drivers are paid an average wage of $13.77 an hour for one of the most dangerous jobs in America. The checks reduced people’s willingness to take these jobs, putting the business model in danger.
Owners of hotels, restaurants, and other hospitality industry corporations raised the alarm, too. McDonald’s, Subway, and other fast food restaurants posted signs lamenting that “no one wants to work anymore.” Most of the complaints focused on the expanded unemployment benefits, but the Cato Institute, a corporate-supported think tank, went a step further and said the larger child tax credit would similarly cause “reductions in labor supply.”
The dehumanized language was telling, sociologist Matthew Desmond, Pulitzer Prize–winning author of the book Evicted, says. “The world’s first capitalists faced a problem that titans of industry still face today: how to get the masses to file into their mills and slaughterhouses to work for as little pay as the law and market allow. Hunger was the capitalists’ solution to the labor question.”
Suddenly, in 2021, people were not hungry enough. So the collective political mouthpiece of these corporations, the US Chamber of Commerce, began to openly lobby Congress and the White House to end the enhanced unemployment benefits. The landlord lobbyists at the National Apartment Association ramped up their own push against the eviction moratorium, including multiple lawsuits challenging its legality. Fast-food franchise owners, restaurant executives, and the National Restaurant Association members cashed in their millions of dollars in contributions to governors of states, urging them to refuse to distribute the enhanced federal unemployment benefits.
These corporate business and landlord lobbies were following a well-worn playbook. The Chamber of Commerce opposed New Deal programs to alleviate poverty and played a key role in blocking comprehensive health care reform during both the Clinton and Obama administrations. Since its inception in the 1930s, the for-profit real estate industry has attacked public housing, successfully lobbying the federal government to cap construction costs, forcing segregation and the use of cheap materials.
“Get America Back to Work”
Today, the combined political power of these corporations and landlords is without peer. The National Association of Realtors is the nation’s top spender on lobbying, and the Chamber of Commerce is number two. During the first three months of the national eviction moratorium, the National Association of Realtors dumped $33 million into a frantic surge of lobbying. In statehouses across the country, the state affiliates of the National Apartment Association are often considered the most powerful lobbyists.
The money talked. Over half of state governors withdrew from the federal unemployment support programs even before they were set to expire in September 2021. In May 2021, more than a dozen US Senators and Representatives introduced the unsubtly named “Get America Back to Work Act.” They made no effort to conceal in whose interests they were acting.
“The federal unemployment benefit has made it almost impossible for service industry businesses to maintain their workforce,” legislation co-sponsor Senator Lindsey Graham said.
Graham failed to mention that those service industry jobs in Graham’s state of North Carolina pay an average $13.45 per hour in food service or $15.92 for care professions, often without full-time hours. For an adult with one child and full-time employment, the state living wage is $36 per hour.
Rep. David Rouzer from North Carolina posted on Twitter a picture of a closed Hardee’s, saying, “This is what happens when you extend unemployment benefits for too long.” Hardee’s restaurants in North Carolina currently advertise that they are hiring workers for $12–$15 per hour.
But the enhanced unemployment benefits were allowed to expire in September 2021. The eviction moratorium ended in July 2021, and the Child Tax Credit expansion stopped at the end of 2021.
The resulting backslide in quality of life was both predictable and tragic. Evictions quickly returned to their previous level, overall poverty spiked, and the child poverty rate doubled. The number of unsheltered homeless individuals increased. So did hunger.
Billionaires again found people desperate enough to accept $13 per hour to deliver Domino’s pizzas and $12 per hour to work the third-shift grill at Hardee’s. Overall corporate profits went up, and profits for the landlord industry in particular increased.
The desire for cheap labor had successfully dismantled the COVID-era programs that had achieved historic success. But this was nothing new.
Early in the twentieth century, a proposed Greenville, South Carolina ordinance would have jailed black women who were not employed because “it is exceedingly difficult for families who need cooks and laundresses to get them.” Around the same time, several states adopted policies that cut off family assistance during cotton-picking and other harvesting seasons.
In a 1970 hearing of the Senate Finance Committee devoted to considering a minimum basic income plan, committee chair Senator Russell Long of Louisiana finally blurted out his main concern. “I can’t get anyone to iron my shirts!” he shouted.
The pattern continues.
When President Trump and Congressional Republicans this year passed the “Big, Beautiful Bill” legislation that will slash food supplements and health care, a long list of corporations lined up to support the bill. Front and center were the usual suspects: the Chamber of Commerce, the National Restaurant Association, and the National Association of Realtors.
Amid Trump’s loud talk of lower taxes and rescinding green initiatives, some corporate firms quietly acknowledged that their support was motivated by a familiar goal. The new work requirements to qualify for health care and food support will force more people into accepting low-pay jobs.