Covid-19 and the struggle at the bottom of the labor market



Risky work and low pay shouldn’t co-exist. Economics textbooks and the public policies they support treat high pay—whether it’s an hourly wage, a stock option, or a lofty salary—as necessary compensation for the risks that befall people on the job. Without raising hourly pay well into the double digits, unpleasant or physically risky jobs will theoretically find no takers; without sky-high pay, Chief Executive Officers will avoid the kinds of risks from which innovation and business transformation are born. So the story goes.

The Covid-19 crisis dramatizes in especially stark form what anyone who works for a living has long known: The economist’s story about wages rewarding workers for risk has it backward. The less a worker earns, the more likely she is to endure working conditions that erode the ability to plan a life or realize her potential. The gulf between economic theory and economic reality, as well as the gulf between the fortunate and the powerless, is evident at every level of response to the current pandemic. Take job stability, one of the basic dimensions of job quality. It is now well-noted that Covid-induced layoffs have fallen disproportionately on low-wage workers. The risk falls on them. But the multi-trillion dollar federal policy response steers resources to business owners and executives—whose high levels of pay supposedly compensate them for the risks they take in running businesses.

The differences here are dramatic, and multiple. Under the CARES Act, the principal economic stimulus bill responding to the Covid-19 pandemic, per-person assistance to low-income workers was both complicated and limited. Some examples: First, the temporary expansion of unemployment insurance benefits was routed through state governments that openly admitted to designing their unemployment insurance systems with the goal of suppressing claims and payments. Second, while the design of the CARES Act initially required businesses to keep workers in their employ as a condition of aid, the roll-out of the bills simply asked businesses to try not to lay off workers. Inevitably, lay-offs followed. Third, the CARES Act made no notable provisions to ensure the safety of front-line workers likely to be exposed to coronavirus, even as evidence surfaced that virus outbreaks were clustered in low-wage workplaces such as nursing homes, hospitals, and meat-processing facilities. One in five U.S. workers filed for unemployment in April, and millions of workers who continue to pull paychecks risk their health in order to do so. The policy response has done little to mitigate the risk they face.



By any measure, the CARES Act has been significantly more effective in supporting corporations and the owners of large businesses—that is, the very entities where high compensation supposedly compensates leaders for the pervasive market risks they face. The largest slice of CARES Act funding was devoted to financing business rescues. It was guided by optional eligibility criteria and limited oversight. The mismatch between (declared) intention and effect is visible in newspaper headlines daily. For example, the fast-food chain Shake Shack received a small business loan that supposedly incentivizes firms to keep employees on-staff, even as it laid off more than 1,000 workers. More broadly, the program only requires businesses to try to avoid layoffs—a vague criterion that is significantly easier to meet than the hard, fast, and complicated requirements workers must fulfill in order to receive unemployment insurance. For large businesses and publicly traded companies, the CARES ACT has worked remarkably well. As of this writing, the Dow Jones Industrial Average sat over 24,0000—a 20% increase from its low in late March. Not for the first time, the fortunes of low-wage workers and business executives are moving in opposite directions.

This brings us back to the opening question: Why do low-wage workers face high levels of risk on the job when our prevailing theories about labor markets suggest the opposite? My book Degraded Work shows that labor markets are governed by power rather than abstract economic laws. Poor working conditions accompany low wages for the simple reason that workers who lack the power to win a good pay rate also lack the power to win job security, control over how they perform their work, safe working conditions, and time off. We typically talk about job quality in terms of the single, measurable dimension of wages. Expanding focus to working conditions beyond pay—to the conditions that allow us to reconcile work with health, home and plans for the future—helps to shift our attention to the more formidable problems currently at hand.

Covid-19 has played out in highly unequal ways because low-wage workers lack bargaining power, both as laborers and citizens. At almost every scale imaginable, the leverage of people who depend on hourly pay stands at low ebb. Fewer workers belong to unions today than at any point in the past 70 years. Full employment—that is, a tight labor market—could compensate for this, yet full employment has been the exception rather than the rule for decades. Workers also lack collective power, not just in their workplaces but also in state and federal electoral politics, where anti-union legislation, voter disenfranchisement campaigns, and extreme gerrymandering lock low-income citizens and their representatives out of power. Covid-19 shows the immediate, life-or-death consequences of this power imbalance. For example, Iowa governor Kim Reynolds recently gave meatpacking workers the choice of going back to workplaces with Covid-19 outbreaks or losing their unemployment insurance benefits. An explicit tradeoff: Your money or your life.



Like most of my friends and colleagues, I can only look at today’s news in spurts. It is often too awful to sit with for more than a few minutes. Learning about changes to low-wage work however—looking coolly and calmly at the mountain of problems on the job—matters. Forcing the public to reckon with the many ways work has been degraded is a key component of righting the problem. Even as conditions on the job reach Dickensian (or Sinclairian) levels, social movements focused on economic inequality are building power. Evidence of the change is surprisingly widespread. We first saw it with the issue of wage theft—the commonplace practice of employers shorting workers on the pay they’re legally owed. Twenty years ago, the term “wage theft” didn’t even exist. But over the course of the 2000s, unions, worker centers, and community organizers gave it shape and power. The effort paid off: Wage theft is now a commonly recognized problem, legislation against wage theft is popular and pervasive and, most important, talking about stolen pay has built new alliances: between classes of workers, between workers and community organizations, and between community organizations and elected officials.

As the Covid-19 pandemic hit, movements for economic justice on the job were beginning to contest other types of inequalities: Inequalities in taxation, in public spending, in housing, schools, environment and health. The mandate to undertake social distancing has necessarily slowed the task of building alliances that link inequalities at work to the multiplying inequalities that citizens experience every day. Nevertheless, there is a clear path forward. News coverage of Covid-19’s impact on work has focused on general strikes called by workers at Amazon and other retailers, including a coordinated series of strikes on May 1. Amid the economic slowdown and bans on public assembly, the immediate impact of these strikes remains in question. The fact that workers were willing to call a strike amid conditions of soaring unemployment—that is, at the very time they are most vulnerable—is itself telling. Along with recent mass teacher strikes and the nationally coordinated strikes by retail workers demanding a $15 minimum wage, these efforts signal workers’ increasing willingness to take risks and engage in mass protest. Both stances were essential to winning past labor gains, and both were in short supply until recently. The labor movement’s long-term search for linkages to other movements against inequality provides another path forward. Unions and community organizations who operate in political environments hostile to organized labor have worked to build alliances with movements for environmental justice. These alliances-in-the-making provide a useful template for advocacy focused on work and the Covid-19 pandemic for the simple reason that environmental injustice and disparities in public health overlap: The disproportionate exposure of low-income communities of color to Covid-19 can be separated from neither the precarious jobs on which they rely, nor the public policy decisions that expose low-income neighborhoods to environmental toxins and starve them of public health services. The pandemic has unsettled individuals, families, and community organizations so thoroughly that no one can currently identify a clear path forward. When people can once again contemplate the future, the labor movement’s renewed taste for confrontation and its emerging alliances with other movements for social equality will provide a path forward.


Marc Doussard is author of Degraded Work: The Struggle at the Bottom of the Labor Market. Doussard is associate professor in the Department of Urban and Regional Planning at the University of Illinois at Urbana–Champaign. He has worked with community and labor organizations in Chicago and elsewhere since 2000.

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