Donna Insalaco laid off 45 employees at Pizzaiolo after sales fell through a “black hole.” Responding to a statewide call for restaurants to close their doors to dine-in customers, the pizzeria is now only offering pick-up and delivery.
“A lot of tears,” Insalaco said, “All of us here live check-to-check. … We hope that we can limp by enough to stay open and call our staff back.”
About 6.9 million Californians don’t have enough money for basic needs, per the Public Policy Institute of California. Another 7.2 million are just above the poverty threshold for their county, one step away from calamity — a job loss, rent hike or surprise medical bill.
Now the coronavirus threatens to swell those ranks of poor Californians as restaurants, stores and other businesses shutter and workers stay home. “Very few Americans have cushions to be able to live for months without pay, and low-wage workers, even less so,” said Jesse Rothstein, a professor of public policy at UC Berkeley.
In response, local, state and federal lawmakers are proposing and enacting new ideas to soften the economic blow for low-income people, including sending cash to people and halting all evictions and foreclosures.
Jessica Bartholow, a policy advocate at the Western Center on Law and Poverty, said shutting down schools and businesses has “really hard consequences that we’re now struggling to address” but if it stems the spread of the virus “the overall outcome for families will be better.”
Who’s most at risk of losing work? “Low-wage workers broadly,” Rothstein said. “People who are hourly, not salaried. People who work for small businesses, people who don’t have paid sick leave.”
About a quarter of California employees do some work from home, according to Census data. But workers in retail, service, manufacturing, agriculture and transportation simply can’t take their work home with them.
About 18 percent of American adults and 25 percent of those making less than $50,000 a year, reported last week that they had lost jobs or hours, according to a survey by NPR, PBS NewsHour and Marist of 835 working adults.
Keeping more people from falling into financial ruin is all the more important during a pandemic because poverty conditions can compromise people’s health and compel them to work when it’s safer for them to stay home, causing viruses to spread faster.
Here’s a breakdown of the state and federal proposals under consideration:
Cash and Tax Relief
The White House announced plans to send cash payments directly to Americans, as part of a $1 trillion stimulus proposal. The plan includes $500 billion for two waves of direct payments to taxpayers on April 6 and May 16 that would vary by household income and size. Another $300 billion would help small businesses meet payroll, The New York Times reported. The checks could amount to $1,000 each.
Senate Democrats are pushing immediate $2,000 payments to all adults and children in the United States below a certain income threshold. If enacted, people would get a second check for $1,500 in July and a third for $1,000 in October if the public health emergency continues. Senators are reportedly working on a stimulus package aimed at providing relief for small and large businesses. The U.S. Small Business Administration is offering low-interest federal disaster loans to California small businesses that suffer as a result of coronavirus. Additionally, the Internal Revenue Service has delayed the deadline for taxpayers and businesses to pay their taxes to July 15.
Eviction Bans, Foreclosures and Utility Shut-Offs
President Trump announced Wednesday that the Department of Housing and Urban Development would suspend evictions and foreclosures until the end of April. Details were unavailable, but it is likely that order applies only to federally funded housing.
Newsom instructed the California Public Utility Commission to monitor how utilities are protecting customers from power, water, cell phone and Internet shutoffs. Already the state’s largest power utilities, serving more than 21 million Californians, have voluntarily done so. Comcast is providing 60 days of free basic Internet service to new customers.
Both landlord groups and tenant-rights activists have asked the administration for emergency assistance for struggling renters, which Newsom could fund with the $1.1 billion that the Legislature passed for the state’s COVID-19 response.
Leave and Unemployment
The U.S. House of Representatives passed a coronavirus relief bill that would provide federally funded emergency leave, including two weeks of paid sick leave and up to three months of paid family and medical leave. Excluded, however, are millions of Americans who work for companies with more than 500 employees. The Senate is expected to vote on the plan.
Unlike many states, California law entitles most workers to at least three days of paid sick leave, and several cities require more than that. California workers who have lost hours or jobs because of the virus can file for unemployment benefits, while those unable to work because they have contracted the virus or been quarantined can apply for disability benefits.
Newsom also signed an executive order waiving the one-week unpaid waiting period for both benefits due to COVID-19. A work-sharing program allows businesses facing financial hardship to avoid layoffs.
Jackie Botts reports for CalMatters. This article is part of The California Divide, a multi-newsroom collaboration examining inequity and economic survival in California.