FACULTY Q&A

Luke Shaefer

As the coronavirus continues to spread, University of Michigan poverty scholar H. Luke Shaefer discusses how the pandemic will impact hourly workers and families with low incomes. Shaefer, faculty director of Poverty Solutions U-M, is a professor of social work and public policy.

What are the implications of the coronavirus pandemic for low-income families?

As there are more and more closures, those who don’t have paid time off and only get paid when they clock in are going to run into the most financial trouble. Some employers, like Amazon, Google and Microsoft, have taken great steps to cover pay and costs for workers, but these are a select few and other companies won’t be in a position to do the same. Employers may cut worker hours in an effort to keep workers at home and reduce the risk of spreading the virus and to try to reduce costs to compensate for their own losses.

That means a lot of the brunt of this slowdown is going to be felt by those who are most vulnerable. And it’s not just those in hourly jobs, it’s also those working in the growing gig economy who may be particularly vulnerable. Here, I’m thinking about folks driving for rideshare services or those cleaning homes.

Many low-earning hourly workers don’t have the option to work remotely, and this unexpected change in income will exacerbate challenges for families working hard to make ends meet. Many of these families are already operating on a thin margin. As a result, we may see increases in financial hardships such as delinquent bills, as people will have to prioritize which bills to pay. We should be concerned about how all of this will affect rents and evictions for folks impacted most.

Beyond that, most households struggling to make ends meet have little extra income or savings to use for stocking up on food, medicine or cleaning supplies. In moments when these are in short supply, they will be hardest to access for those with the fewest resources.

The public health challenges are critical and we must do everything we can to stop the spread of the coronavirus. But we also need to recognize that the response may trigger considerable economic hardship for many families too.

The Centers for Disease Control and Prevention and World Health Organization have issued important recommendations to help prevent the spread of the coronavirus. Do you anticipate any challenges for low-income families in following those recommendations?

Many people living in poverty will have a difficult time following these recommendations, which puts a spotlight on the inequities that exist in our country.

The recommendation to stay home if you feel sick and to seek medical care early if you have symptoms of COVID-19 may not be an option for people who do not have paid sick leave or health insurance. A Pew analysis of Bureau of Labor Statistics data tells us nearly one-fourth of U.S. workers do not have paid sick days, and among workers who make $10.80 an hour or less, that proportion rises to 69% who lack sick leave. There are about 27.5 million people without health insurance who may not be able to access testing and treatment for COVID-19. To afford health care, these families may cut back on other critical expenses or incur unmanageable medical debt.

Similarly, families with low incomes will have difficulty affording child care as schools close, and students without internet access and a computer at home will not be able to keep up with schoolwork remotely. Another consideration related to school closures are the 29.7 million children who qualify for free or reduced-price lunch at school. How can we ensure those children have sufficient nutrition at home until their schools reopen?

Are there any steps policymakers can take to address some of these issues immediately and to be better prepared to support people with low incomes during public health emergencies in the long term?

In the short term, we should consider ways to get resources to families who lack the financial means to weather public health emergencies. We should ask how funding can be deployed to food pantries and local health departments to ensure families with low incomes who need to quarantine have centralized access to additional food, medicine and cleaning supplies.

In the past year, because of different rule changes that make it harder for people to get help, we’ve seen lots of people have their benefits terminated or folks who would have gotten help before never even get access. That means that as we enter a period of economic challenge, people aren’t connected to the very resources that can help them weather it.

In particular, as states have added work requirements to food assistance, lots of adults have seen their benefits terminated, often because of confusion about the rules. And in Michigan and other programs, unemployment insurance has been cut, like the number of weeks a person can get aid. This is a good time to revisit those rules and see if we want to make it easier for people who’s hours get cut to get help paying for food or rent.

The federal government and states also should look at programs like unemployment insurance. My colleague Chris O’Leary highlights some ways the federal government could change the program to expand access to workers impacted by closures and make sure they can pay their rent and put food on the table. We can look at other programs too. This might be a good time to suspend work requirements on all public benefits, since we really want to enable those who need to to stay home.

Cities like Detroit and Atlanta are putting temporary moratoriums on water shutoffs for households who are unable to pay bills, and San Francisco and San Jose are advancing legislation that would put a moratorium on evictions for people whose wages have been affected by coronavirus-related closures and work stoppages. Other cities should take up similar efforts to help families living in poverty maintain a stable place to live and access water as the need for constant hand washing remains.

Looking to the future, federal policy changes could expand access to paid sick leave, and while we’ve made progress in reducing the number of uninsured over the last decade, this crisis brings into relief why we need to do more, since there are still tens of millions who are uninsured.

More information:

• Coronavirus: U-M experts can discuss health, economic, societal impact

• Related Faculty Q&A: U-M economist Gabriel Ehrlich sees sharp, short-lived effects of coronavirus