Policy responses to COVID-19 should be rooted in equity

Policies to deal with the pandemic have too often left out lower income people even though they'll be hit hardest in a recession.

Just a few weeks ago, you might have gone out to dinner with a friend or caught the newest blockbuster at the movie theater. But across the state, nation, and world, the way people live their daily lives has radically changed as we take important public health measures to socially distance and keep at bay the spread of COVID-19.  

 Slowing the spread of this disease is imperative. Many lives will be saved through the safety measures that are happening. At the same time, the pandemic is also having an impact on our economy. 

A recession seems inevitable. Unemployment claims have skyrocketed to record-breaking numbers. Just last week, over 6.6 million people across the country applied for unemployment benefits, including over 100,000 in Minnesota.  

The economic disruption caused by the coronavirus has laid bare the weaknesses and inequities in our economy. It’s essential that we take an inclusive response so that every one of us — regardless of who we are or where we live — can stay healthy and afford the essentials of daily living.   

A range of policy actions have already taken place at various levels of government. Gov. Tim Walz has created executive orders that, for example, expand access to unemployment benefits for the thousands of workers whose employers have closed for safety reasons, and to create the necessary administrative flexibility so that Minnesotans can maintain access to essential health care, mental health and income supports.  

Federal responses have ranged from greater funding to states to emergency sick leave for workers. Among the many provisions in the recent $2.2 trillion federal CARES Act are direct payments to many Americans to support them during this crisis.  

These actions have included many important components. New federal and state policies will ensure many of those who are often left out are included this time, including “gig workers,” independent contractors and freelancers. Federal funding for states, local governments and tribal nations will help support essential public services that are needed more than ever but will get harder to fund as government revenues drop along with the overall economy. 

But we see too many examples of people being left out. Just a couple of examples: 

  • Thankfully, the final version of the CARES Act’s “recovery rebates” did not follow the U.S. Senate’s original plan to provide smaller amounts to lower-income Americans. But it still has harmful flaws. Initially, the U.S. Treasury Department stated that millions of Americans would not get those payments automatically but instead would have to jump through additional unnecessary hoops — a condition they lifted late Wednesday night, at least for Social Security recipients. The $500 rebate for dependents inexplicitly doesn’t include children over the age of 16 or other kinds of dependents. Even worse, many immigrant families — including some with U.S. citizen children — are deemed ineligible because someone in the family uses a taxpayer ID instead of a Social Security number to file their taxes. 
  • Here in Minnesota, last week’s COVID response legislation left a few essential pieces of Gov. Walz’s proposed package on the cutting-room floor. Heartbreakingly, a $500 emergency payment for Minnesota’s lowest-income families and children was one of the items left out. We know that many parents participating in the Minnesota Family Investment Program have recently held jobs in the retail, hotel and other service sectors. Those who lost their jobs before the full impact of the COVID-19 crisis hit won’t be helped by the new unemployment insurance improvements, and they may be facing barriers to receiving federal financial assistance. These are the families most hard-pressed to put food on the table and to afford diapers and other basics. 

While we’ve taken some good steps forward, we can and must do better in further policy action to make sure that Minnesota workers, families, local businesses and nonprofits are able to make it through this public health and economic crisis. 

Policy responses should be rooted in equity, especially considering that recessions inflict the greatest harm on people trying to get by on low incomes and people of color. Both of these groups are more likely to lose their jobs in an economic downturn, and people of color often have much less income and wealth to help them weather the downturn. Why? As a result of a history of discriminatory practices that go back to our earliest days as a nation and have curtailed access to opportunity, education and housing.  

Nan Madden
Nan Madden has been director of the Minnesota Budget Project since 1999. Her work combines technical expertise of Minnesota tax policy with a drive to ensure everyday Minnesotans have a voice in the policy decisions being made at the Capitol.
Clark Goldenrod
Clark Goldenrod is deputy director of Minneosta Budget Project, researching Minnesota's economic trends, working on more inclusive state policies for new Americans and translating the state budget process.