How to Have a Just Recovery from the Crisis
By Fernando Abarca
This morning, the LA County Board of Supervisors discussed the establishment of a “Roadmap to Economic Recovery” - an economic stability plan meant to get people back to work, and open up businesses again. This will be done through the development of a “Task Force” made up of industry experts, chambers of commerce, and many city officials who will be tasked with developing the short, medium, and long term plan for recovering from this crisis. It will also establish a Fund for providing assistance to both businesses and individuals. This motion is immensely important in lifting up workers and small businesses from this crisis.
The Current Context
Small businesses and workers across the country are hurting. Last week, congress approved an additional $310 billion for the Paycheck Protection Program (PPP) after the initial $350 billion was exhausted within two weeks. Despite being designed to support companies with less than 500 employees, loopholes in the bill allowed much of the initial $350 billion to be swallowed up by large companies like Ruth's Chris Steakhouse, Shake Shack, and even the Lakers. Meanwhile, small businesses are barely scraping by, being forced to resort to private,“crowd-sourced” funding and competing with unemployment benefits that will pay workers more than businesses can give.
While small businesses are having to navigate these systems, citizens and permanent residents are starting to get their stimulus checks - $1,200 in unrestricted money that will not be taxed. But people who are married to non-citizens, people who are immigrants, and still others will not receive this one time check. Even for those receiving a check, a one time “stimulus” doesn’t go very far when the median monthly rent for a 2-bedroom space in LA County is $1,619 (ACS 2018). In short, the measures taken so far by the federal government are not enough - but local governments are trying to fill the gaps.
Small businesses and workers in underserved communities have long been victims of redlining and this pandemic further highlights the inequities of our current economic system. Many historically redlined communities are still bank-poor, meaning there is a lack of access to healthy capital for small businesses seeking business loans and residents seeking home loans. In terms of workers, recent data from the Economic Roundtable shows that young adult workers of Latin American descent make up a disproportionately high percentage of the 26 million newly unemployed people in this country. Further, in California, people with lower incomes are more likely to become unemployed during the crisis. More than 1.3 million jobs have been cut since the beginning of March in LA County alone. One study suggests that if unemployment reaches 30% and stays there through the end of Summer, the poverty rate will increase from 12.4% to 18.9% - that’s 21 million more people falling into poverty across the US.
Working Towards a Just Recovery
Programs like the PPP are band aid solutions to much larger economic issues. It is important to support workers and small businesses now, but we also have to think towards the future. The County’s proposed Roadmap to Economic Recovery is an important step in getting people back to work, but without equity built into this plan it will continue the history of harm to low-income communities of color. The County must take this opportunity to rethink the types of programs and infrastructure needed to create truly equitable economies; economies that lead to the long-term self-sustainability businesses and workers in our communities deserve. Here are some of our thoughts on how the county can approach their Roadmap to Economic Recovery:
The recovery must be just. Our communities have been in a state of emergency even before the pandemic. A roadmap to recovery should move our communities beyond surviving and focus on building economically resilient and self-sustaining neighborhoods. When developing recommendations, there should be a holistic assessment of the conditions that existed prior to COVID-19, including: those impacted by housing shortages and landlord harassment, small businesses that were affected most during and prior to the pandemic, and existing workforce development programs and how they can be improved to serve the workers impacted by the crisis.
Clarifying that community leaders and residents will serve on the recovery “taskforce.” Surely, industry leaders and large businesses have valuable knowledge to offer, but we must also make sure that the voices of residents and micro-entrepreneurs are heard and heeded. They are the experts of our neighborhoods, and they are the drivers of our local economies. Their expertise must be central to conversations around short, medium, and long-term measures to economic recovery.
Clearly instate anti-displacement measures. New investment in a community, whether private or public, can have negative impacts on existing residents and small businesses. We should seek to organize investments to aid in the recovery effort, but these investments should focus on supporting existing stakeholders and finding ways for them to exert more ownership in their communities. To have a just recovery, we must protect and build up the existing residents and invest in their well being. Investing in existing communities and prioritizing their needs is sustainable investment.
Strengthen social safety nets. By investing in public programs and ensuring we streamline government processes to support the most vulnerable workers and businesses in our communities, we will be rebuilding more equitable communities. A just recovery recognizes that communities cannot prosper if their residents are struggling. The implementation of human rights policies such as universal basic income and universal rent control for commercial and residential structures will be a necessary step in achieving a just recovery.
A road to recovery must be equitable and inclusive. The county must advance progressive policies prioritizing small businesses owned by people of color, while also supporting workers by increasing wages and creating workforce development programs.This roadmap to economic recovery will require us to think outside the box and do things we have never done before. The pandemic has clearly shown, and in a profound way, the cracks in our system and the inequities of our society. We must reject the idea of returning to “normal life” after the COVID-19 Crisis, and instead think critically about how we can create the type of economy and society that truly meets the needs of working people.