As Americans scramble to buy face masks and hand sanitizers to guard against growing coronavirus infection, an equally serious concern is growing alongside the pandemic scare, especially among low-wage workers, about how the contagion would impact their livelihood even after the virus has been contained.
Layoffs are increasing almost daily as businesses are made to shut down because of the deadly infection, prompting people to seek unemployment benefits. Blue-collar employees, including domestic workers, food and hospitality workers, home health aides, taxi drivers and nail and hair salon industry workers, many of whom are South Asians, are desperately looking for financial help from any quarter possible to be able to put food on the table and save their families.
“Like other communities, low-wage workers of South Asian origin, including Indian Americans, are economically upended by the virus and the lack of basic workers’ protection as they tend to lose jobs across sectors,” Sarita Gupta, Director of the Future of Work(ers) Program at the Ford foundation in New York who was formerly director at Jobs With Justice, a union rights organization, told this correspondent.
Increase in Layoff of Workers
There is no final data as yet on the total number of laid off workers due to coronavirus as the situation is changing everyday, but according to an NPR poll in the first week of March, 18% of households have already had someone laid off and states were recording massive spike in unemployed insurance claims and firing.
In an updated report March 19 quoting the Labor Department, it said new claims for unemployment benefits climbed to 281,000 last week as the coronavirus pandemic shuttered businesses and left people out of work. This was the highest level since Sept. 2, 2017 when they totaled 299,000.
Restaurants, which have had to close except for pickup and delivery, have been particularly hard hit and auto manufacturers like Ford, General Motors and Fiat Chrysler were suspending production until the end of March.
Experts say more job losses are expected in coming months. The Los Angeles Times reported March 19 that after years of steady economic growth that drove unemployment to a 50-year low, the pandemic has suddenly raised the specter of joblessness on a scale not seen since the onset of the Great Depression.
Gupta said New Jersey alone has recorded at 12-fold increase in unemployment insurance claims and these numbers are going up. “Obviously there is huge concern among people now about unemployment. A related issue is the question of paid sick days for workers in low-wage industries who generally do not have such facility except in some cases,” Gupta said, adding that the U.S. is perhaps one of three or four industrialized countries in the world that do not have any sick days for workers.
The Labor Department said that “a number of states specifically cited COVID-19 related layoffs, while many states reported increased layoffs in service-related industries broadly and in the accommodation and food services industries specifically, as well as in the transportation and warehousing industry, whether COVID-19 was identified directly or not.”
There were many other sectors with sizeable South Asian workers’ presence, including homeworkers, taxi drivers and nail and hair salon workers who have been adversely impacted by layoffs or in some cases due to lack of paid sick leave.
Impact on Low-wage South Asian Workers
Pabitra Khati Benjamin, Executive Director at Adhikaar, a New York based non-profit that works with Nepali-speaking communities to promote human rights and social justice for all, said while many domestic workers/cleaners were still being asked by their employers to come to work, there has also been cases in the last two weeks where they have been asked not to report to work at all because of the virus scare.
Since workers, who have been asked not to come to work are not on any kind of payroll and have no sick leave, they are not even defined as employees and don’t get paid when they do not work.
“Those home workers, who are still being permitted by their employers to work, have been taking risks, first because they have to travel daily by public transport to go to work and secondly their employers often send them to do groceries and for other chores outside because the employers themselves to not want to leave the safety of their homes for fear of the virus. This is unfair for the hapless domestic workers, but they are helpless because they cannot afford to miss work even for the pittance they get in lieu of their service. After all, they have to take care of their families,” Benjamin said, adding that the situation for workers in this sector is dismal and not the same as in other organized industry.
Talking about nail and hair salon workers, which includes about 1,300 Nepalese-speaking employees in New York area, Prarthana Gurung, communications manager at Adhikaar, said until Gov. Andrew Cuomo ordered closure of all barbershops, nail and hair salons and tattoo parlors on March 20, some workers were still going to work since there was no direction from salon owners although some were asked by their employers to go home and apply for unemployment benefit.
“It’s a scattered situation because some of our members who worked in high-end saloons were in a better financial position, but the majority of our people are the ones who were working under the table and did not even get the $15 an hour minimum wage, although we recently won a victory on that issue,” Gurung said.
With the closure ordered by the governor, the workers are desperate to find an alternative source of livelihood but in the current job market that may be the most difficult challenge.
Stories of other workers are no different. A house cleaner from Philadelphia affected by COVID-19 wrote on Facebook that she is worried about not going to work but she is also worried about going to work. “If I don’t go to work, at the end of the month there’s bills to pay. But when I go out, I’m worried,” the House cleaner wrote on the National Domestic Workers Alliance home page.
One home worker said she is worried because already three of her clients have canceled and one of them canceled the whole month of March because she just traveled and did not want to risk making the workers sick. “I appreciate their concern, but I don't know how I will pay my rent I am really worried about how we will cover our costs if we don't have work.' The domestic worker, who is not South Asian, wrote.
NYC Taxi Drivers Struggling
Another industry where workers have been taking a hit is the taxi and limo drivers who are believed to be struggling to make both ends meet in New York because they are experiencing a radical drop in ridership amid concerns about the virus. They point out that most people work from home these days and there are fewer fares to airports because people don’t go to airports due to several flight cancellations last week.
“Our pockets are empty,” one Mohammad Azad in SoHo was quoted as saying in news reports March 15. “If it continues like this, it will be very hard to survive in New York City. All taxi drivers are miserable. I am scared but we take the risks,” Azad told the New York Post.
The population of yellow cab drivers are dominated by South Asian immigrants, who make up about 38 percent of drivers (14 percent from Pakistan, 14 percent from Bangladesh, 10 percent from India), according to news reports.
Business is said to have dropped by 30–50 percent as fewer tourists hit the city and more locals stay indoors to avoid contact with the COVID-19 virus. “It’s really dire out there,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance. “Trips dry up after evening hours and with significant loss of airport trips, only small fares remain,” Desai said referring to the plight of cabbies in the Big Apple.
The situation is no better in other places like in the West Coast or in St. Louis in Missouri which has a growing number of Indian American white-collar immigrants working in emerging biotech and health care industries. St. Louis has some Indian-American-owned business and groceries as well.
“It’s a pretty dismal scenario. In St Louis, roads are empty right now because of coronavirus pandemic and you can well imagine its impact on people who have been seeking to eke out a living on meagre tips at gas stations or restaurants that are closed now. The same is true about convenience store and grocery owners and workers because business is totally down as few are visiting our stores,” Ashwin Patel, who owns a travel agency and a grocery, said.
Missouri now has 90 confirmed cases of COVID-19, including three deaths whereas St. Louis metro has 35 confirmed cases, including one death, according to state authorities.
Impact on Small Businesses
“Small businesses are not getting much of a help at least till today from the Small Business Administration, although lot of things are being said about assistance in Washington. My travel business has come to a virtual standstill as people are cancelling flights and nobody seems to be travelling out at this time. It’s a very alarming situation,” Patel who is associated with Gujarati Samaj of St Louis as well as Bal Bihar and has been in business for 40 years, said.
Analysts say for President Trump, the corona virus and the resulting layoff statistics could be an ominous sign politically because he has been seemingly banking his reelection hopes on the strength of the economy and particularly the stock market and the very low unemployment in the nation.
Rajiv Gowda, a retired Staten Island-based engineer and ex-labor leader, noted that supply chain disruptions, slow sales, and sick employees are just a part of what small businesses have to deal with. “As owners are forced to close their doors, there are still things that we, as members of the South Asian community can do to support our neighbors. When workers or their family members are sick, they shouldn’t have to decide between staying home from work to care for themselves and their dependents, as opposed to paying rent and putting food on the table,” Gowda told this correspondent.
“But that is the situation our policymakers have put workers in, it is time for policymakers to provide healthcare and paid sick leave for all,” Gowda who is running for New York Senate as Democrat in 2020 election, told this correspondent.
Since the virus outbreak in the U.S., stocks have lost almost all the gains since Trump took office, with the Dow falling more than 30% in the last month and the labor market, which just a month ago had generated 273,000 new jobs, is likely to see rapid deterioration, the report said.
To arrest the downslide U.S. Treasury Secretary Steven Mnuchin last week announced that he would propose a $1,000 check to be given to every American, and the President wants to give cash now in the next two weeks,” according to a March 17 Bloomberg report.
Economists’ Concern about Government Help
But there were worries about the mechanism and who will get that money and who will not as the mechanism of doling out such money has not been clearly stated as of last week.
“There are concerns that any attempt by the federal government to provide what they call helicopter money of $1,000 for every American that President Trump has discussed may not actually reach those workers who are not formally employed and are being paid in cash or even those who may be undocumented. It is probably going to reach only documented taxpayers. I think it is still quite early to know exactly how these things are going to be administered and there are worries,” Sanjay Reddy, Associate Professor of Economics at The New School for Social Research in New York, told India Abroad.
Reddy said that in this situation some of the workers like South Asian taxi drivers would have considered going back home for long periods of time as they have reportedly done in the past when things got difficult here, but because of current travel restrictions, they cannot do that either. “So, people, even those fully documented, have very limited cushion to tide over the crisis,” he added.
The New York Times in a report titled ‘Who Qualifies for Paid Leave Under the New Coronavirus Law’ said those at companies with more than 500 people — 48 percent of American workers — are excluded.
Workers at places with fewer than 50 employees — 27 percent of workers — are included, but the Labor Department could exempt small businesses if providing leave would put them out of business. Employers can also decline to give leave to workers on the front lines of the crisis: health care providers and emergency responders.
Saru Jayaraman, founder and president of One Fair Wage, said the situation is very dire, referring to restaurant workers who are, like other tipped workers, in an unprecedented financial morass in the wake of closure of restaurants or have been fired by the owners because of lack of patrons.
“We are going to see a lot of starvation and what we really need is to fix the system and we need minimum wages for people who are laid off so they don't become destitute,” Jayaraman, former president of the Restaurant Opportunities Center United, a nonprofit co-founded by her in New York City in 2001, told this correspondent, adding that there is need for an unemployment insurance system for everybody and need for public health care. “There are so many problems in this system that need to be fixed!
Nonprofit Launches emergency Help Fund
One Fair Wage Campaign has launched an emergency fund to support tipped workers and service workers affected by Coronavirus and economic downturn. At press time a little over half a million has been raised to help workers. “We’re hoping to raise as much money as possible to give as many workers as possible cash assistance of $213,” Jayaraman said.
The organization is calling on Americans to demand the federal government and every state end the sub-minimum wage and adopt One Fair Wage — not just in this crisis, but permanently.
“Fair wage for workers and medical insurance and unemployment benefits for workers are going to be the most important issue in this general election,” Jayaraman, who is Director of the Food Labor Research Center at the University of California, Berkeley, said in response to a question.
Jayaraman told UC Berkeley news that while the U.S. House of Representatives has approved a measure this month to provide broad new support to workers affected by the health crisis, some food and restaurant companies already have reversed longstanding practices and now are providing paid sick leave for their workers.
Jayaraman told this correspondent earlier there are 14 million restaurant workers in the United States, including 104,000 South Asian restaurant workers according to government data but added that actual numbers may be more as government data “can dramatically undercount” restaurant workers, especially immigrant restaurant workers. There are also another 10 million to 15 million workers in retail. “You’re talking about at least a third of the working population. That’s low-wage workers, working full-time and living in poverty,” she said.
Jayaraman noted last week that, “This crisis should tell us that it doesn’t work to have some people with access (to health care) and some people who don’t,” adding that restaurant workers can’t afford to be sick, and if they are, they often go to work anyway. “But if they’re cooking or providing childcare while ill, they risk transmitting illness.”
Economist Reddy, who is a member of the Independent High-level Team of Advisers to the Economic and Social Council of the United Nations on the longer-term positioning of the UN Development System, feels that the success of public health measures requires that the government covers everybody, not just people having green cards.
“For example, there may be food or other vendors with or without license on the streets of New York who are trying to eke out a living. If any such people fall sick, they cannot afford to be sitting at home and would continue to be out on streets doing his business. They may or may not have documents, but they're engaged in an economic activity that bring them out to interact with people daily. People may be under pressure to continue to work even if they're sick, and that increases the chance of the virus spreading,” Reddy said.
“That is why launching a broad-ranging system of support, which is quite generous and helps people who are potentially at risk of contracting the disease is in the broader public interest in this situation,” Reddy said.
Similar sentiments were expressed by Vanita Gupta, president and CEO of The Leadership Conference on Civil and Human Rights last week. “The onset of Covid-19 has laid bare the structural racism and barriers to opportunity that are entrenched in our society. As people look to our leaders for assistance, Congress must take steps to break down those barriers - not shore them up,” Gupta said in a statement.
She said by all accounts, the Republican proposal” is woefully inadequate” and must be scrapped. “Congress must put politics aside and ensure that the final bill prioritizes working people over corporations, supports our most marginalized communities, and protects our democracy,” she said.
Fear of Recession
Reddy said he feels that increasingly the pandemic is becoming both an economic crisis and a health crisis at the same time. His fear like many other economists, were that there is a clear danger that the Coronavirus will trigger a global recession as it has severely disrupted both demand and supply in many countries, or threatens to do so.
“I think we have enough voices going towards that direction of a possible recession in the U.S. economy although I must say the U.S. economy had previously been more robust than' the European or the Chinese economy,” Reddy said in response to a question.
Talking about the economy, Sarita Gupta said the crisis is as much because of the virus as due to its stifling effect on the economy. “We are dealing with two crises right now, one being the pandemic, which we need to contain, and the other being the economy and the job market which also needs to be taken care of. The reality is that largely we are looking at six to eight weeks of shutdown of economic activity and that is if we are able to flatten the curve,” Gupta said.
Last week Deutsche Bank said that it sees the world plunging into a coronavirus-fueled recession in the first half of 2020 before recovering through the rest of the year.
Quarterly GDP declines seen in the first and second quarters will “substantially exceed anything previously recorded going back to at least World War II,” the bank's economists wrote, according to markets.businessinsider.com It said that “the U.S. economy would slump by 12.9% in the second quarter.”
Commenting on global recession Reddy said there is a risk that it may also deepen and bring to the breaking point existing sources of fragility without an adequate emergency program of public support, adding that inevitably, workers of all kinds, but especially those in already insecure occupations, are being affected.
“In the United States, this includes immigrant workers in low-wage occupations who already possess limited protections like home care workers, taxi and car-service drivers, informal construction workers and many others. It is too early to tell what will happen, but it is not too early to advocate for a robust government response that helps small firms to stay afloat, and workers, including those working informally or who may be undocumented, to maintain income, housing and food security,” Reddy said.
“It is important that such measures reach everyone in order to ensure cooperation with and success of public health efforts as well as better economic outcomes -- but it is not clear if the steps announced so far by the U.S. federal and state governments will actually do so,” Reddy said.
“The international dimensions are also concerning. The disruption not only of employment and income but of family life, which for many immigrants (involve) crossing borders, and of remittances, may be sizable. It remains to be seen how it will all play out, but it is important to recognize that who will ultimately be hurt will be greatly influenced by the steps taken now by public authorities.”