Target economic relief to assist low-wage workers

Target economic relief to assist low-wage workers

Governments should take policy measures to buffer the economic impacts of COVID-19, which will affect lower-wage workers first and hardest. Social distancing, quarantine, and the closure of businesses may have enormous economic consequences. The most vulnerable people are low-wage workers in low-income households. Governments should create mechanisms so that workers affected by COVID-19 do not suffer loss of income that might deter them from self-isolating to contain the spread of the virus.

Public health experts recommend that companies encourage employees to work from home to prevent the virus from spreading. But remote work is not an option for millions of workers in fields like retail, restaurants, personal services, the gig economy, and informal sectors. In these fields, employment situations are more precarious, wages tend to be lower, and in some countries workers have low rates of paid sick leave. Particularly in countries such as the US, where low pay may combine with lack of access to sick leave and healthcare coverage, these workers will need assistance. 

Human Rights Watch has long urged governments to guarantee paid sick and family leave to enable workers to take time off to care for new children or ill or older family members or to deal with their own serious health conditions without losing pay. In the context of COVID-19 and other disease outbreaks, paid sick and family leave helps ensure workers who are sick – or those with sick family members – can stay home to minimize the spread of the virus.

Many governments guarantee some paid sick leave to all workers. Others – most notably the US among developed economies – do not. Low-wage earners, service workers, informal workers, and workers in the gig economy are among those least likely to have paid sick leave. The lack of paid sick and family leave means disease outbreaks like COVID-19 place an undue burden on poor and marginalized workers and exacerbate economic inequality and also contribute to gender inequity. To support families during the outbreak, sick and family leave should cover self-isolation and caregiving responsibilities during school and care facility closures.

Global supply chains have already been disrupted by COVID-19, which has led to reduced manufacturing and factory closures. There is a risk that workers in jobs linked to the global economy will be forced to work part-time for less income or lose their jobs altogether.

One option is direct cash payments to compensate some lost working hours, as was provided by the US government during the 2008 recession. Low-wage workers need protection against the consequences of being let go by employers when they cannot work due to their sickness or the sickness of family members. Without assistance, these workers may face intense economic hardship, fall behind on debt payments, and risk eviction. Simple one-off cash grants to families whose children receive free school meals or who are in receipt of specific family-related social security assistance could also help mitigate impacts on already-struggling families who now in addition to loss of income could face extra burdens, for example, due to school closures. European countries, including Italy, France, and Spain, are considering or already adopted special financial measures to support workers, low-income families, and small businesses.

Unconditional tax cuts for employers and employee-side payroll tax cuts are often poorly targeted and may not reach those most in need. For example, expanded social insurance programs like unemployment may permit workers to stay on payroll and be paid when they cannot work because of a COVID-19 downturn.