The federal government played a vital role in reducing poverty in 2021. While Social Security remains the largest poverty reducer in the U.S.—reducing the number who would have been in poverty in 2021 by 26.3 million—the relief measures in 2021 were vital. pic.twitter.com/zYDwW87lIT

— Elise Gould (@eliselgould) September 13, 2022

Even with the rise in inflation, the bounce back in the labor market and strong safety net programs such as the child tax credit meant a reduction in poverty between 2020 and 2021. Remember SPM poverty includes those safety net programs while the Official Pov Measure does not. pic.twitter.com/4TA7YVekbs

— Elise Gould (@eliselgould) September 13, 2022

Today, the Census Bureau also released valuable statistics on earnings for men and women in 2021. A bit surprising to me that there was little change in the overall number of workers, but a notable increase in full-time, year-round workers in 2021, for both men and women. pic.twitter.com/iep9KUELX7

— Elise Gould (@eliselgould) September 13, 2022

Median earnings for all workers (regardless of work hours) rose between 2020 and 2021 by 4.6%, in part because of the shift from part-time to full-time work. The 4.5% rise in women’s earnings was particularly good news given that theirs is still significantly lower than men’s . pic.twitter.com/WIrGOBAmej

— Elise Gould (@eliselgould) September 13, 2022

Next week, the Census Bureau will release their latest data on earnings, incomes, poverty, and health insurance for 2021, which will inform our understanding of people’s economic wellbeing last year. Below, I provide context for the data next week by looking at how an expanding economy—the robust bounce-back in the labor market— and vital public programs sustained workers and their families in 2021.  

These two phenomena are related, as public policy directly led to the robust recovery we experienced in the wake of the pandemic recession. Public policy further helped workers and their families stay afloat with expanded and enhanced unemployment insurance, economic impact payments, and child tax credits, to name a few. 

Let’s take a step back and first examine the labor market and related metrics leading up to, including, and since 2021.  

• After rising sharply in the spring of 2020, the unemployment rate fell dramatically, a drop from an average annual rate of 8.1% in 2020 to 5.3% in 2021, then down to an average of 3.7% so far this year.  
• After a significant drop in employment in the spring of 2020—a fall of 22 million jobs in two months—the labor market grew quickly. On average between 2020 and 2021, there were nearly 4 million more jobs. That growth has continued at a swift pace in the first eight months of this year, exceeding pre-pandemic employment levels this summer.  
• Inflation jumped this year in response to continued supply chain bottlenecks as well as rising energy prices, but those bottlenecks were already experienced in 2021, as inflation grew 3.5 percentage points between 2020 and 2021. 
• Hourly wages rose quickly in 2020 as the bottom dropped out of the labor market. In 2021, wages fell due to rising inflation as well as a return of disproportionately lower-wage jobs to the labor market. Those lower-wage workers experienced faster wage growth in 2021 than any other group, with the bottom 30% of wages rising faster than inflation. 

Fiscal support bolstered the recovery and helped families make ends meet through 2021. 

• Federal fiscal relief at the scale of the problem led to a faster recovery from the pandemic recession, recovering about eight years faster than the prolonged recovery from the Great Recession. In the last few months of 2020, job growth slowed, but was bolstered again with the additional fiscal support that was passed in December 2020 and the American Rescue Plan, which added 9.2 million jobs added in 17 months. 
• Relief measures including enhanced and extended unemployment insurance, economic impact payments, and child tax credits were vital to keep families afloat and to kickstart a strong economic recovery through 2021. 
• In 2020, these measures lifted millions of families out of poverty. 

Each of these features of the economy will play out in the earnings, income, and poverty measures released on Tuesday.  

Inflation will surely take a bite out of any expected growth in living standards while fiscal supports will continue to sustain families during this time. It’s possible we will see stronger income growth near the bottom of the income distribution as lower-wage jobs returned with faster wage growth. Social Security will continue to be the largest poverty reducer, with the 2021 supports helping families make ends meet. Unfortunately, though the labor market continued to grow in 2022, many of those fiscal supports expired. 

Some additional key factors to keep in mind when analyzing the Census report: 

• The 2020 and 2021 data will be re-weighted based on the decennial census so comparisons to early periods should be made with caution, depending on the scale of the change. 
• The Census reported significant nonrandom collection issues during the pandemic, which will likely be discussed again. 
• The composition of the labor market shifted significantly in this peculiar pandemic recession and that composition will likely matter for trends in earnings in 2021. 

EPI’s census research team will be tracking the data throughout next week. Highlights include: 

• Ben Zipperer and Asha Banerjee will examine the role public programs played in lifting people out of poverty in 2021. 
• Valerie Wilson will analyze recent trends in income and poverty by race and ethnicity. 
• Kyle Moore will take a deeper dive into the relationship between race and health insurance. 

As most states wrap up their legislative sessions, we can assess expenditures of State and Local Fiscal Recovery Funds (SLFRF), appropriated by the American Rescue Plan Act (ARPA), so far this year. Many state and local governments have used ARPA funds to make transformative investments to support an equitable recovery, while others have used the funds in ways that will do much less to stimulate the economy, enhance racial equity, or support low-wage workers and their families. State and local governments still have considerable remaining ARPA resources to spend, and ample opportunity to use them effectively.

By now, nearly all of the $350 billion in ARPA funds has been disbursed by the federal government to the states; some entities got all their funds at one time in 2021, but most had half their funds withheld to 2022. According to the National Council of State Legislatures, states and territories have so far appropriated $133 billion of the $199.8 billion allocated to them for SLFRF. Below the state level, it’s not possible to know exactly how much of the approximately $150 billion allocated to cities, counties, and tribal governments has been spent, since those reports are not publicly available. However, the largest cities and counties are required to file reports on SLFRF funds, and as of the end of 2021, 83% of the money they received in the first tranche of funding has been budgeted, according to an analysis by the Treasury Department. (This does not mean all budgeted funds have already been spent.)

State and local governments have made changes to unemployment insurance, some better than others

One of the most common uses of SLFRF dollars by states, unfortunately, has been to replenish unemployment insurance (UI) trust funds. NCSL estimates that at least 21 states have put at least $16.2 billion—about 12% of the dollars allocated so far—into trust funds to pay off debt accumulated during the pandemic. This is a poor decision, one that has little impact on economic growth and effectively amounts to a tax cut for businesses.

However, ARPA funds can also be used to make equitable improvements to UI. A prime example of this is Colorado, which included $600 million in ARPA funds to strengthen the state’s UI system. Some funds were used to replenish the state UI trust fund, but the bill also addressed UI coverage gaps and significantly expanded access to benefits for workers historically excluded from the UI system. Highlights of the bill include:

• Removing the one-week waiting period for receiving benefits once the state’s UI trust fund balance recovers.
• Ending forced repayments of benefit overpayments (not obtained through fraud) if the recipient is living in poverty, or if the overpayment was the result of erroneous information provided by the state.
• Making individuals eligible for payments regardless of immigration status.

Colorado is not the only state that has used ARPA funds to improve UI systems. Washington allocated $31.3 million in SLFRF funds to, among other things, “promote equitable access to the unemployment insurance system,” including translation of UI documents into the state’s 10 most frequently spoken languages, and an upgrade to IT systems to make the system more accessible.

Tennessee allocated $61 million to upgrade its UI systems to meet federal “timeliness standards” to make sure benefit claims are processed more quickly. As a 2020 report by the National Employment Law Project and The Century Foundation noted, upgrading the quality of UI systems is not just a technical question. Older UI systems reinforce institutional racism by limiting access to Black and Brown workers by imposing technical burdens and providing incomplete information to applicants, and through biased algorithms that “result in different outcomes based on protected attributes, including race.”

Premium pay

Premium pay for essential workers is an opportunity to support low-wage workers who have been exposed to great hazards during the pandemic. In 2022, many governments have enacted premium pay programs. Minnesota instituted a $500 million frontline worker pay program for both public- and private-sector employees, becoming one of the few governments, along with Puerto Rico and the city of Oxnard, California, to explicitly include private-sector workers in premium pay plans. Delaware allocated $31.7 million in premium pay for employees of state operations, including mental health facilities and prisons that operate around the clock. Lexington County, South Carolina, made premium payments to all eligible public employees ranging from $2,015 to $4,900 in 2022, in addition to payments made in 2021. In Kalamazoo, Michigan, essential workers will get $3 more per hour up to a maximum of $7,500 in premium pay.

Housing protections

The final rule for SLFRF was released in January, and it expanded the opportunities to use these funds to address inequities in housing. Many state and local governments have done so. In May, the Detroit City Council unanimously approved a right to legal counsel for tenants facing eviction, funding it for the first three years with ARPA funds. Given that Black individuals make up less than 20% of renters but more than 32% of evictions, tenant protection advances racial equity, and the presence of legal counsel significantly reduces the rate of eviction, especially for low-income renters.

Similarly, Johnson County, Iowa, will provide tenant legal representation with $337,500 in ARPA funds. Minnesota will make $109 million available to assist homeowners at risk of foreclosure due to economic disruption. Vermont, Delaware, Arizona, Michigan, South Dakota, and other states have allocated funds to build low-income housing. Denver will spend $10.8 million to build affordable housing and acquire more congregate shelter space. These improvements are sorely needed, but it is important to note that they will not come close to rectifying the nation’s current shortfall of 3.8 million housing units. More must be done.

Public health and worker protections

As the latest waves of the Omicron variant continue to sweep the country, some state and local governments have also prioritized the use of ARPA funds to promote public health and fight the pandemic. Washington, D.C., is setting a strong example: Free COVID testing and vaccinations are available in multiple sites across the city every day of the week, with ARPA funds playing an important role. The city of Boston used $93,000 of its SLFRF allocation to set up grocery delivery for SNAP (food stamp) recipients, a vital tool when COVID can make it difficult for people to leave home to get food.

There are many more examples of ARPA funds being used to protect working families. We will note just a few more here.

• Johnson County, Iowa, and three cities in the county are supporting labor standards enforcement by granting money to the Center for Worker Justice of Eastern Iowa (one of EPI’s EARN in the Midwest grassroots partners) to hire a full-time community organizer assisting workers with wage theft claims.
• Colorado is spending $18 million to increase the amount of cash assistance grants under Temporary Assistance to Needy Families (TANF) by 10%, with annual cost-of-living adjustments as well.
• The city of San Jose, California, significantly increased the size of its wage theft oversight by hiring staff to enforce its Responsible Contractor Ordinance and using hiring incentives and higher starting wages to fill its 800-person shortfall in city employees.

A missed opportunity to rebuild the public sector

While many governments have used ARPA funds to hire public-sector workers, more needs to be done. State and local government payrolls are 3.2% below pre-pandemic levels. The $16.2 billion paid into UI trust funds would have gone a long way toward rebuilding a public sector that, even before the pandemic, never fully recovered from the 2008 recession.

A third of state and local government workers, and a disproportionately higher number of women, Black, and Latinx employees, are paid less than $20 an hour. With huge numbers of public employees considering leaving their jobs, critical public services are put at risk due to staffing shortages. State and local governments need to raise their employees’ wages to attract and retain the workforce they need. ARPA funds can serve to enable those wage increases for the next few years.

The challenge going forward: supporting children and families as federal funds disappear

There are still tens of billions of dollars of SLFRF yet to be spent. As was the case when those funds first reached state and local governments last year, the best uses of these funds are those that strengthen public goods and services, target the most vulnerable workers and households, and prioritize the needs of those most impacted by the public health crisis.

One of the more significant changes since 2021 is that many of the key supports put in place by the CARES Act of 2020 and ARPA in 2021 are now expired. The burden of these expirations has fallen heavily on working families with children. Guaranteed paid leave for people sick with COVID, or caring for family members with COVID, is now gone. The expanded unemployment benefits begun in 2020 and extended in 2021, which did so much to shore up economic demand and help working families stay afloat, are now behind us. The end of the eviction moratorium has disproportionately harmed Black renters, and disproportionately harmed families with children. The expansion of the Child Tax Credit, which helped more than 61 million children, has yet to be renewed.

SLFRF funds are not sufficient to completely fill in the gaps created by the expiration of these federal programs, but targeting relief to those affected by these changes is still important. For example:

• Paid leave is known to improve maternal health, making it an important tool for addressing the disturbingly high rate of death for Black mothers. Expanding paid leave is allowed under U.S. Treasury rules for SLFRF and can be enacted at a state or local level.
• The ongoing crisis in both child care and long-term care is in no small part being driven by the low wages paid in the industry. State governments could do more to raise wages for these workers. An added benefit is that investments in both child care and elder care would likely be a pain-free way to dampen inflation.
• The expansions to unemployment benefits and TANF assistance in Colorado show the capacity of state governments to target improvements to vulnerable workers and children. Eventually, federal support will be needed to continue these programs.
• The important steps taken in Detroit and elsewhere to keep families in their homes and reduce evictions can and should be supported by ARPA funds.
• State and local governments also ought to look at Boston’s example and find ways to help combat food insecurity in families, especially with the looming expiration of the expanded school lunch program.

Investments of these kinds will fulfill the purposes of the American Rescue Plan Act, address the economic and public health impacts of the pandemic, build equity, and restore public services. Policymakers should make them a priority in the coming months.

My testimony addresses the following questions:

• How has the pandemic impacted older workers? What are some of the labor market exit and re-entry trends for older workers that we have observed over the past two years? How have they differed from pre-pandemic trends?
• What has the pandemic revealed as key gaps in the protections that older worker have in the labor market? What policies would improve the labor market experience of older workers?
• How has the experience of the pandemic differed among older workers, if we were to group them by age, sex, race, occupation, or socioeconomic status?

An atypical recession and recovery

The pandemic recession was unusual. Unlike most, it was not triggered by a financial crisis causing a drop in aggregate demand. Homeowners and 401(k) participants benefited from rising asset values, notwithstanding the recent drop in stock prices. The recession officially lasted two months in early 2020 before the economy rebounded, though employment remains nearly 3 million below the pre-pandemic peak—or 4.5 million factoring in population growth (EPI 2022).

Labor supply and demand were both affected by social distancing in response to the pandemic. Layoffs were concentrated in services such as leisure and hospitality, while health and safety concerns and caregiving responsibilities loomed large in workers’ decisions to leave the workforce.

Fear of contracting COVID—and workers contracting COVID—remain the biggest impediments to a full recovery. The Omicron variant caused a record spike in the number of workers sidelined by illness in January—3.6 million in total (BLS-CPS)—a fact obscured by revisions to earlier employment estimates that resulted in strong reported employment growth for January. Though employment has undoubtedly grown rapidly over the past year, the timing of these gains was revised in the January jobs report.1 The Omicron variant also caused 6.0 million workers to be sidelined in January because their employer lost business or closed (BLS 2022). Though infection rates are declining from their January peak, protecting workers from COVID with strong occupational safety and health standards remains an urgent priority for workers, their families, and the broader economy.

Female-dominated service occupations, including care work, saw large initial job losses. This is in contrast to typical recessions, where male-dominated durable goods manufacturing and construction are among the hardest hit as consumers and investors lose confidence and delay major purchases and investments. (Unless otherwise noted, statistics are based on my analysis of U.S. Census Bureau Current Population Survey microdata (Flood et al. 2021).)

As demand for goods has remained high in the pandemic while demand for services has suffered, global supply chain bottlenecks have reduced the supply of certain goods, driving up prices in the U.S. and other countries. While some workers are seeing overdue wage gains, there is no evidence of a wage-price spiral, as wage gains are concentrated in certain service industries, such as hospitality, while price inflation is concentrated in certain goods-producing industries, such as automobiles (Bivens 2021; Politano 2021).

The “Great Resignation” has received much attention, but so far appears to have mostly benefited younger, more mobile, workers. The Federal Reserve Bank of Atlanta’s Wage Growth Tracker, which tracks individual workers’ annual wage growth to strip out the effect of changes in the composition of the workforce, shows that only workers ages 16-24 have seen accelerated wage gains in the pandemic, while wages for workers ages 55 and older decelerated during much of the pandemic and continue to grow much more slowly than wages of prime-age (25-54) or younger (16-24) workers (Federal Reserve Bank of Atlanta 2022).

In the recession, workers ages 55 and older saw employment declines similar to those for prime-age workers ages 25-64. In most recessions, including the Great Recession, older workers are less likely than younger and prime-age workers to lose their jobs due to seniority. The unusually high employment decline for older workers in the pandemic happened even though older workers were less likely to be in occupations and industries most affected by the pandemic, such as leisure and hospitality. However, older workers face much greater health risks from COVID, so declines in employment for older workers were steeper in occupations characterized by high physical proximity to others (Davis 2021).

The robust federal response to the recession was also atypical. Adequate fiscal support, including relief checks and expanded unemployment benefits, brought about a strong and rapid recovery despite the pandemic’s persistence and global supply chain issues. This stands in sharp contrast to the slow recovery after the Great Recession, which caused lasting damage to vulnerable workers and their families, including many older workers. As a result of actions taken to shore up household finances and expand unemployment eligibility and benefits, low-wage workers were less likely to experience large income losses during the pandemic recession than before the pandemic (Larrimore, Mortenson, and Splinter 2021). However, most relief measures have ended and vulnerable workers, including unemployed older workers, face greater challenges ahead.

Employment rates for some age groups, but not older workers, are now approaching pre-pandemic rates. Employment rebounded more quickly among younger (16-24) and prime age (25-54) workers than older workers (55+), so until recently older workers accounted for a disproportionate share of the jobs gap. Older workers (55+) were 24% of the workforce in November and December of 2019 but accounted for 41% of missing jobs in November 2021 and 35% in December 2021 based on age-adjusted employment projections.2 However, January data shows that the employment rate for older workers is now 1.4 percentage points below the pre-pandemic rate, roughly the same as for prime-age and younger workers (BLS-CPS).

Which older workers were most affected?

Among older workers, women, non-college workers, workers of color, and part-time workers were more likely to lose their jobs or quit during the pandemic recession. Among workers ages 55 and older, employment in the recession fell by -12% for men versus -16% for women; by -28% for part-time workers versus -9% for full-time workers; by -17% for workers without bachelor’s degrees versus -8% for those with bachelor’s degrees; and by -15% for non-Hispanic Black workers, -17% for Hispanic workers, and -21% for Asian/other workers versus -12% for non-Hispanic white workers.

With some exceptions, vulnerable groups are still lagging behind. Despite a strong rebound in employment after April 2020, employment in December 2021 was further behind pre-pandemic levels for older women (-3%) than for older men (-1%); and for older Black non-Hispanic workers (-6%) than for older white non-Hispanic workers (-3%). However, employment of older Hispanic workers was slightly above pre-pandemic levels (+2%), and employment of older Asian/other workers was unchanged (0%). Employment of older workers without bachelor’s degrees remained significantly below pre-pandemic levels (-5%), while that of older workers with bachelor’s degrees slightly increased (+2%). These estimates do not account for changes in population size that vary by group nor for seasonal variations, though patterns appeared broadly similar in November.3

Part-time work accounts for most of the employment loss among older workers. Among older workers, part-time employment remained significantly below pre-pandemic levels in December (-8%), while full-time employment appeared essentially unchanged (0%). Though these measures are sensitive to seasonal and demographic changes, especially as the large Baby Boomer cohort aged into older ages where part-time work is more common, there is little doubt that part-time work accounts for most of the employment loss among older workers, especially those age 65 and older. Davis (2021) for example, estimated that part-time workers accounted for 70% of the increase in retirements in the first year of the pandemic.

Middle-aged workers ages 55 to 64 and workers ages 65 and older experienced the pandemic differently. Estimates for smaller sub-groups can be noisy and hard to pin down. However, it is clear that declines among the oldest subgroup, workers 65 years and older, account for most of the persistent employment losses. The oldest workers who left were more likely to be highly educated than their middle-aged counterparts and better prepared for retirement. Among middle-aged workers ages 55 to 64 who left the workforce, the most concerning are declines among workers without bachelor’s degrees (-6%) and Black non-Hispanic workers (-8%), since these workers are less likely to be able to retire early without experiencing hardship. Research on older workers who left the workforce in the first year of the pandemic also found significant differences by age and income sub-groups, with retirements concentrated among workers ages 70 and older, especially higher-income workers, while employment losses among middle-aged workers skewed toward lower-income workers (Davis 2021; Quinby, Rutledge and Wettstein 2021).

Unemployed older workers

Despite important differences with previous recessions, one usual pattern has held true: older workers who lost their jobs in the pandemic were likely to stay unemployed longer than their younger counterparts. In December 2021, 43% of unemployed older workers (ages 55+) were unemployed for 6 months or more compared with 30% of their younger counterparts (ages 16-54) (Schramm 2021).

Older workers who lose their jobs face greater earnings losses than their younger counterparts. These earnings losses stem from longer unemployment duration and the fact that new jobs for unemployed older workers often pay significantly less than their old ones due to the loss of employer-specific skills and age discrimination (Johnson and Gosselin 2018; Johnson and Mommaerts 2011).

Age discrimination in hiring is rampant. A study published by the Federal Reserve Bank of San Francisco found that employers were less likely to contact older fictitious job applicants (ages 64-66) than their middle-aged (49-51) or young (29-31) counterparts. Age discrimination was worse for women and unrelated to the physical demands of the job, as older women received roughly half as many callbacks for administrative positions as young women (Neumark, Burn, and Button 2017). Earlier studies have also found evidence of age discrimination (see, for example, Lahey 2007).

A multi-faceted approach is needed to combat discrimination. Better enforcement of the Age Discrimination in Employment Act is necessary but not sufficient given the difficulty job applicants have in demonstrating that they were rejected for age-related reasons. An Older Workers Bureau at the Department of Labor could be particularly useful in combating age discrimination in hiring based on mistaken assumptions about older job applicants, such as assuming that they are likely to retire soon.

Older unemployed workers especially benefited from measures taken during the pandemic to extend the duration of unemployment benefits, increase benefit amounts, and expand eligibility to workers who normally fall through cracks in the system. These temporary measures not only assisted vulnerable jobless workers and their families, they also helped the economy recover quickly (Bivens and Banerjee 2021). Despite federal aid, however, some states ended extended unemployment insurance (UI) early in response to unfounded complaints that generous unemployment benefits impeded employment growth (Dube 2021; Martinez Hickey and Cooper 2021; CBPP 2022). Before enactment of these temporary measures, 3 in 10 jobless workers did not meet states’ strict and outdated eligibility requirements, including many part-time workers and workers misclassified as contractors. Income replacement rates in many states are also abysmally low, another reason we need comprehensive UI reform (Bivens et al. 2021).

Extended benefits also help workers and the economy by improving job matching. Exploring differences in UI eligibility by state during the Great Recession, Farooq, Kugler and Muratori (2020) found that extended UI benefits allowed jobless workers to find higher-paying jobs that better matched their skills and training. The economy benefits when workers are matched to jobs that employ their skills rather than being forced to take the first available job. Low-road employers who are competitive only because they pay low wages and provide few benefits are enabled by workers’ inertia and poor knowledge of better options (Jäger et al. 2021).

Work sharing holds promise as an alternative to traditional unemployment benefits. Work sharing, also known as short-term compensation, encourages employers to reduce hours rather than lay off workers during recessions by providing benefits to compensate workers for lost wages (Herzenberg 2020). Though some states already had work sharing programs in place before the pandemic and temporary funding for work sharing was included in the CARES Act, many employers were not aware of this option, which has been successful in reducing layoffs in countries like Belgium and Germany. Maintaining employment relationships is especially important for older workers who face daunting challenges in being rehired after layoffs.

How concerned should we be about pandemic retirements?

Some excess retirements are less concerning than others. The impact on workers and their families depends on whether they are being pulled into retirement by rising net worth or pushed out of the workforce by layoffs or due to health and safety concerns. Davis (2021) found that excess pandemic retirements among 65- to 74-year-olds were concentrated among college-educated white workers who are likely better prepared than average for retirement, especially given gains in stock and housing values. On the other hand, employment declines among middle-aged workers ages 55 to 64 with lower earnings and less formal education are more concerning because these workers are not likely to be ready for retirement and are not yet eligible for Medicare and other benefits.

Many seniors who left the workforce were already semi-retired. Their decision to exit could reflect rising net worth, health and safety concerns, pandemic disruptions, or all the above. A semi-retired 70-year-old accountant with a few small business clients, for example, may have seen his 401(k) grow, his client list shrink, and his job made riskier by the pandemic. Many new retirees in the oldest age groups were likely receiving retirement benefits when they were working, partly explaining why we have not seen a parallel rise in Social Security take-up.

Other factors that could explain a puzzling dip in Social Security applications may include relief payments and expanded unemployment benefits keeping unemployed older workers in the labor force, and the effect of Social Security office closings. While Social Security office closings during the pandemic have undoubtedly affected take-up of disability benefits (Stein and Weaver 2021), a lifeline for workers in poor health, the impact of office closings on applications for retirement benefits is less clear. Anecdotal evidence suggests that office staff often encourage people to apply for retirement benefits even when it could be in their interest to delay and receive higher monthly payments. Applying online may make it more likely that would-be applicants encounter advice from AARP, the National Academy of Social Insurance, and other organizations encouraging seniors to consider delaying (Orman 2018; Bethell 2012).

Even in the case of workers who exit the workforce for reasons unrelated to rising asset prices, it does not necessarily follow that we should try to lure them back—at least not until we solve the problems that caused them to leave in the first place. Many left the paid workforce due to health issues or caregiving responsibilities. A Brookings study estimated that 1.6 million full-time-equivalent workers might be missing from the workforce due to lingering COVID effects (Bach 2022), which could account for a third or more of missing jobs.

Many sidelined workers, especially women, are caring for family members suffering from pandemic-related health problems and making up for staffing shortages among paid caregivers. Pandemic-related problems include patients with health issues other than COVID who delayed care or went without treatment due to COVID fears or staffing shortages. Health care employment is down by 378,000 jobs (-2.3%) from its level in February 2020 (BLS 2022), with nursing homes accounting for a disproportionate share of losses (AHCA/NCAL 2021). Chronic shortages in direct care occupations predated the pandemic and have only gotten worse (Espinoza 2017). Problems in this sector affect older workers who provide care to parents, spouses, and other loved ones, as well as older workers employed in these low-paid and often dangerous occupations.

The Build Back Better Act would greatly improve the lives of older workers and enable some of them to return to the workforce. Build Back Better includes significant funding for home and community-based services (HCBS) under Medicaid, helping people in poor health who prefer to live at home rather than in long-term care facilities and allowing some family caregivers to return to work. Build Back Better also creates a paid family and medical leave program to help family caregivers take time off to care for loved ones, and improves the pay and working conditions of paid caregivers, including through collective bargaining.

The United States is one of the few countries that does not guarantee access to paid sick leave. This is bad enough under normal circumstances, but it is especially problematic to force individuals to bear the cost of staying home to protect coworkers and the public in a pandemic—or worse yet, give them a choice between working sick or losing their jobs. Two-thirds of low-wage workers lack access to paid sick leave (Gould 2021), including many home health aides and other frontline workers who have seen high rates of COVID infection.

Impact on the economy

Just as we need to differentiate between older workers who can retire comfortably from those for whom exiting the workforce creates hardship, employment losses can have a greater or lesser impact on the economy depending on the worker, the job, and the state of the economy. A full-time worker who exits the workforce years before he or she expected to retire has a greater impact on the economy than the loss of a semi-retired part-time worker who planned to retire soon regardless. Likewise, early retirements have less of an impact in an economy suffering from inadequate demand, when retirements can open up jobs for unemployed younger workers. However, this is not the situation we are in now.

Early retirements affect a country’s productive capacity not just by reducing employment and work hours, but also from the loss of human capital. This is especially problematic when the affected workers are directly involved in caring for, educating, and protecting the current and future workforce and providing other critical services. We should therefore be very concerned about a wave of early retirements among educators, nurses, postal workers, and other public-sector workers.

K–12 schools and other local government employers have shed an alarming number of jobs in the pandemic. Employment in this sector, which skews toward older workers, had never fully recovered from the Great Recession. The pandemic exacerbated preexisting problems, including a dwindling teacher pipeline. Though job losses in this sector include quits and retirements in addition to the impact of school closings and other pandemic disruptions, the education exodus reflects worsening conditions in jobs that already paid little or, in the case of highly-educated teachers, were grossly underpaid compared to similar workers in the private sector (Cooper and Martinez Hickey 2022). The job losses in this critical sector occurred despite federal aid to state and local governments, some of which has not been spent wisely or not spent at all.

Conclusion

My testimony has focused on pandemic-related effects and policies, but many challenges facing older workers predate the pandemic and require long-term solutions. Though some of these, such as an Older Workers Bureau, are targeted at older workers, most policies that would help older workers would also help other vulnerable workers, such as raising the minimum wage, strengthening collective bargaining rights, guaranteeing paid leave, addressing unpredictable and involuntary part-time schedules, combating employer misclassification of workers as independent contractors, and other policies that support good jobs with decent pay and benefits (EPI 2018).

Notes

1. Revisions to employment estimates were due in part to adjusting population controls to reflect 900,000 COVID deaths, of which the vast majority were ages 55 and older. The U.S. Census Bureau resets population controls in the Current Population Survey once a year in January, which affects employment estimates for different age groups. These adjustments are not applied retroactively. Other survey-related challenges, including ambiguity in how workers sidelined by COVID are coded and higher non-response rates, have added to the noisiness of employment estimates during the pandemic.

2. Age adjustment is based on five-year age groups except for the youngest (ages 16–24) and oldest (ages 75+) groups. An important caveat is that population estimates in 2021 CPS data were not adjusted for high COVID mortality among older age groups, as noted in footnote 1. Population control adjustments were made in January 2022, but January microdata is not yet publicly available.

3. These estimates also do not reflect adjustments to population controls as noted in previous footnotes.

References

American Health Care Association and ​National Center for Assisted Living (AHCA/NCAL). 2021. Nursing Homes Down 221,000 Jobs Since Start of Pandemic. November 10, 2021.

Bach, Katie. 2022. Is ‘Long Covid’ Worsening the Labor Shortage? The Brookings Institution, January 11, 2022.

Bethell, Thomas N. 2012. “World’s Best Investment? Delaying Social Security.” National Academy of Social Insurance, April 2012.

Bivens, Josh. 2022. “U.S. Workers Have Already Been Disempowered in the Name of Fighting Inflation; Policymakers Should Not Make It Even Worse by Raising Interest Rates Too Aggressively.” Working Economics Blog (Economic Policy Institute), January 21, 2022.

Bivens, Josh, and Asha Banerjee. 2021. How to Boost Unemployment Insurance as a Macroeconomic Stabilizer—Lessons from the 2020 Pandemic Programs. Economic Policy Institute, October 12, 2021.

Bivens, Josh, Melissa Boteach, Rachel Deutsch, Francisco Diez, Rebecca Dixon, Brian Galle, Alix Gould-Werth, Nicole Marquez, Lily Roberts, Heidi Shierholz, and William Spriggs. 2021. Reforming Unemployment Insurance: Stabilizing a System in Crisis and Laying the Foundation for Equity. A joint report of the Center for American Progress, Center for Popular Democracy, Economic Policy Institute, Groundwork Collaborative, National Employment Law Project, National Women’s Law Center, and Washington Center for Equitable Growth. June 2021.

Bureau of Labor Statistics, Current Population Survey (BLS-CPS). Various years. Public data series accessed through Labor Force Statistics from the Current Population Survey online database. Accessed February 2022.

Bureau of Labor Statistics (BLS). 2022. “Employment Situation Summary” (news release). February 4, 2022.

Center on Budget and Policy Priorities (CBPP). 2022. Policy Basics: How Many Weeks of Unemployment Compensation Are Available? February 14, 2022.

Cooper, David, and Sebastian Martinez Hickey. 2022. Raising Pay in Public K–12 Schools Is Critical to Solving Staffing Shortages; Federal Relief Funds Can Provide a Down Payment on Long-Needed Investments in the Education Workforce. Economic Policy Institute, February 3, 2022.

Davis, Owen. 2021 “Employment and Retirement Among Older Workers During the COVID-19 Pandemic.” Schwartz Center for Economic Policy Analysis and Department of Economics, The New School for Social Research, Working Paper Series 2021-6, December 7, 2021.

Dube, Arindrajit. 2022. “Aggregate Employment Effects of Unemployment Benefits During Deep Downturns: Evidence from the Expiration of the Federal Pandemic Unemployment Compensation.” National Bureau of Economic Research Working Paper 28470, February 2021.

Economic Policy Institute (EPI). 2018. Policy Agenda. December 5, 2018.

Economic Policy Institute (EPI). 2022. Jobs Report: Strong Job Growth Despite Omicron Shows the Strength of this Recovery. February 4, 2022.

Espinoza, Robert. 2017. 8 Signs the Shortage in Paid Caregivers Is Getting Worse. Paraprofessional Healthcare Institute, Inc., February 2, 2017.

Farooq, Ammar, Adriana D. Kugler & Umberto Muratori. 2020. “Do Unemployment Insurance Benefits Improve Match Quality? Evidence from Recent U.S. Recessions.” National Bureau of Economic Research Working Paper 27574, July 2020.

Federal Reserve Board of Atlanta. 2022. “Wage Growth Tracker” [Excel File], Center for Human Capital Studies Data Tools, various years. Accessed February 2022.

Flood, Sarah, Miriam King, Renae Rodgers, Steven Ruggles, J. Robert Warren and Michael Westberry. 2021. Integrated Public Use Microdata Series, Current Population Survey: Version 9.0 [data set]. Minneapolis, Minn.: IPUMS, 2021.

Gould, Elise. 2021. “Two-Thirds of Low-Wage Workers Still Lack Access to Paid Sick Days During an Ongoing Pandemic.” Working Economics Blog (Economic Policy Institute), September 24, 2021.

Herzenberg, Stephen. 2020. “COVID-19 Relief Should Extend CARES Act Work-Sharing Provisions.” Working Economics Blog (Economic Policy Institute), December 7, 2020.

Jäger, Simon, Christopher Roth, Nina Roussille, and Benjamin Schoefer. 2021. “Worker Beliefs About Outside Options.” National Bureau of Economic Research Working Paper 29623, December 2021.

Johnson, Richard W. and Peter Gosselin. 2018. How Secure Is Employment at Older Ages? Urban Institute, December 28, 2018

Johnson, Richard W., and Corina Mommaerts. 2011. “Age Differences in Job Loss, Job Search, and Reemployment.” Urban Institute Program on Retirement Policy Discussion Paper 11–01, January 12, 2011.

Lahey, Joanna N. 2008. “Age, Women, and Hiring; an Experimental Study.” Journal of Human Resources 43.1: 30-56.

Larrimore, Jeff, Jacob Mortenson, and David Splinter. 2021. “Earnings Shocks and Stabilization During COVID-19.” Board of Governors of the Federal Reserve System Finance and Economics Discussion Series 2021-052, June 29, 2021.

Martinez Hickey, Sebastian, and David Cooper. Cutting Unemployment Insurance Benefits Did Not Boost Job Growth; July State Jobs Data Show a Widespread Recovery. Economic Policy Institute, August 24, 2021.

Neumark, David, Ian Burn, and Patrick Button, “Age Discrimination and Hiring of Older Workers.” Federal Reserve Bank of San Francisco Economic Letter, February 27, 2017.

Orman, Suze. 2018. “When It Comes to Social Security, 70 is the New 65!” AARP The Magazine, September 2018.

Politano, Joseph. 2022. “The Inflation Outlook: Diving into December’s CPI Numbers and their Implications for the Future.” Apricitas—an Econ Blog (Substack), January 12, 2022.

Quinby, Laura D., Matthew S. Rutledge, and Gal Wettstein. 2021. “How Has Covid-19 Affected the Labor Force Participation of Older Workers?” Center for Retirement Research at Boston College Working Paper 2021-13, October 2021.

Schramm, Jennifer. 2021. AARP/PPI Employment Data Digest. AARP Public Policy Institute, December 2021.

Stein, Jonathan and David A. Weaver. 2021. “Half a Million Poor and Disabled Americans Left Behind by Social Security,” The Hill, November 11, 2021.

Household Pulse Survey (HPS) data reveal stark inequities in COVID-19-related outcomes by income. Among working-aged Americans, those with 2019 household incomes less than $25,000 were 3.5 times as likely to report missing an entire week of work mainly due to their own or loved ones’ COVID-19 symptoms, relative to those earning $100,000 or more (Figure). The United States does not collect national COVID-19 surveillance data by income or occupation, so the HPS data are among the best sources for evaluating disparities, although the survey response rate is low.

When low-income workers miss work due to COVID-19, they not only face the risk of severe illness—their families also report not being able to afford enough food to eat. After the expiration of the federal sick leave program, few low-income workers have access to paid sick leave to support them in self-isolating while infectious, reducing viral spread in the community, and leading a healthy recovery. Only 35% of low-wage workers have paid sick leave while 95% of high-wage workers do.

Inequities shaped by policy choices

Since the early months of the pandemic, low-income, front-line workers have faced elevated risk of exposure to and death from the airborne virus.

Two years into the pandemic, the lowest-income workers have had the least access to vaccines and boosters (Figure 1). Roughly 4 in 10 working-age Americans have either never been fully vaccinated (Figure 2) or have not gotten a recommended booster (Figure 3). The U.S. federal government spoke of the importance of vaccines and boosters but did not take adequate steps to create access for low-income workers. Workers who were boosted were least likely to miss work due to COVID-19 symptoms, while two doses were less protective (Figures 4 and 5).

The United States has large vaccine inequities, no federal workplace safety standard in place to protect workers, and fewer than 10 of 50 U.S. states had mask mandates during the Omicron surge. In contrast, other high-income countries responded quickly to the Omicron variant with widespread vaccine delivery. Of the 27 European countries, 23 implemented universal mask policies.

Other countries have consistently provided free rapid tests and high-quality masks to contain the virus. As the U.S. federal government recently implemented a one-time free test and mask program at the end of the Omicron surge, there remains a need for clear plans to provide these materials on an ongoing basis, including at the start of future surges.

Additional surges are likely due to new variants, seasonality, and waning immunity. The United States can act now to reduce the toll of COVID-19 on low-income workers and their families, on employers, and on society, much as other high-income countries have done. Each of the following policies and approaches are well-aligned with the pandemic plan that President Biden released when he entered office.

Clear communications and data

The first principles of public health crisis communications are for high-level leaders to “be first” and “be right,” and to clearly communicate threats without minimizing or exaggerating. The Biden administration can be forthright that the recurring death and disruption of COVID-19 surges are serious concerns that warrant immediate policy interventions.

To inform an equitable policy response, the government needs comprehensive data on all Americans and communities most at risk. Policymakers, the Supreme Court, and researchers may use COVID-19 surveillance data on occupations with high exposure to COVID-19 to help provide further information about the virus and how to respond most effectively.

Vaccine mandates

Vaccine mandates are key to increasing the reach of vaccination as a tool for both reducing severe disease and limiting hospital overflows and economic and societal disruption. The Biden administration can work closely with governors and mayors to implement vaccine mandates for all workers and workplaces.

Data-driven mask policies

COVID-19 spreads through the air, and mask policies that help people mask together are one of the most effective policies for reducing the spread of COVID-19. Data-driven mask policies are linked to local transmission rates and can turn off when cases are low and can turn on when cases begin to surge. New variants are likely, and having mask policies that automatically turn on could be especially important for more lethal or vaccine-evading variants.

High-quality masks and tests for low-income workers

President Biden’s January 2021 pandemic plan included using the Defense Production Act to scale up manufacture of high-quality masks and rapid tests to make them widely available, with a focus on front-line workers. However, this plan has yet to go into effect. Businesses and local governments would also benefit from access to high-quality masks and tests to help workers stay healthy, happy, and safe at work.

Improved workplace protections

Workplace transmission remains an important driver of the pandemic. While the Supreme Court blocked the Occupational Health and Safety Administration (OSHA)’s emergency temporary standard requiring unvaccinated workers to be masked and tested weekly, the majority of justices noted that OSHA could issue a worker protection standard targeted to higher risk workplaces. OSHA should do this, requiring improved protections from exposure to airborne viruses in workplaces where the risks are highest.

Paid leave

As low-income workers face repeated infections and absences from work that often lead to food insufficiency, paid leave is more important than ever. Congress can help reduce food insufficiency among workers and their families by incorporating paid leave into Build Back Better legislation in a way that ensures the lowest-income workers are covered. Paid leave will also reduce onward transmission of COVID-19 to colleagues and customers by allowing infected workers to isolate at home.

The way forward

Disasters and diseases often exacerbate inequities. Leadership on good policies can reduce the toll for everyone and especially the most vulnerable. In the prolonged COVID-19 pandemic, policies that center equity can reduce harms for low-income workers, their families, their businesses, and ultimately the whole of our society.

From EPI senior economist, Elise Gould (@eliselgould):

Read the full Twitter thread here.

Omicron led to unprecedented levels of workers out sick in January. With 806k cases reported for the household survey reference week, it’s not surprising that the number of workers absent due to illness rose to 3.6 million in January. pic.twitter.com/HQOxi1nbEv

— Elise Gould (@eliselgould) February 4, 2022

Another surprise in today’s report, given the rise in Omicron in January, was the solid increase in leisure and hospitality jobs, rising 151k in January. Surprising because leisure and hospitality has been affected most by the ebbs and flows of the pandemic.#jobsreport #jobsday pic.twitter.com/BBcEmJdQKd

— Elise Gould (@eliselgould) February 4, 2022

Overall, employment remains 2.9 million (or 1.9%) below pre-pandemic conditions. Taking into account population growth since Feb 2020, the jobs shortfall is around 4.5 million. Given recent strong trends, that shortfall can be closed by the end of this year.#jobsreport #jobsday pic.twitter.com/zHPUOSpGwX

— Elise Gould (@eliselgould) February 4, 2022

From EPI president, Heidi Shierholz (@hshierholz):

Read the full Twitter thread here.

Over the last 12 months we’ve added 6.6 million jobs. REMEMBER THERE IS STILL A LONG WAY TO GO—depending on how you measure the counterfactual, the total gap in the labor market is somewhere between 5 and 7 million jobs. But that gap is closing fast. 2/

— Heidi Shierholz (@hshierholz) February 4, 2022

But one huge problem? There is a giant gap in state and local govt jobs—they are down 748,000 since Feb ‘20, with the majority of that, 389,000, in education. It’s crucial that S&L govts use their ARPA funds to raise pay and refill those jobs. 4/ https://t.co/OMkdI68j3D

— Heidi Shierholz (@hshierholz) February 4, 2022

The Centers for Disease Control and Prevention (CDC) COVID tracker shows that nearly seven times the number of cases were reported during the January reference week (January 9-15) compared with the December reference week. Average new caseloads exceeded 800,000 in the week ending January 15, the peak of Omicron in the United States. This is nearly five times the peak level during the Delta surge (164,000) and more than three times the peak last winter (250,000). The labor market experienced a slowdown in payroll employment growth during the Delta surge, and that is likely to happen again in January (or even a temporary decline).

The Census Bureau’s Household Pulse Survey also provides striking evidence of what to expect in the January jobs numbers. The number of people not working between the survey periods ending on December 13, 2021 and January 10, 2022 rose by 6.5 million. This dramatic rise is primarily due to a three-fold increase—5.8 million more people—reporting they did not work because they were caring for someone or sick themselves with coronavirus symptoms. Figure A illustrates the dramatic uptick in people not working because they were caring for themselves or someone else in the most recent survey.

The same data also report a striking increase of people not working because they did not want to be employed, were concerned about getting or spreading the virus, their employer temporarily closed due to the pandemic, or other reasons. Counterintuitively, there was a notable reduction in the number of those who said they were not working because they were retired, which may be driven by seasonal factors. But in the long term, there has been an uptick in retirements in the pandemic in part due to fewer retirees returning to work; as the virus recedes, I suspect that will turn around and more will return to the labor market.

To be clear, the Household Pulse Survey will not translate one-for-one into the jobs data we will see on Friday because it has a different survey methodology and doesn’t consider seasonal swings—which can be very dramatic between December and January. However, it paints a clear picture that the pandemic surge in January will likely matter for both the number of jobs created as well as potentially softening participation in the labor force.

What is fairly certain, though, is that the number of workers absent due to illness will reach historic levels. The relative scarcity of workers in recent months has been one of the factors contributing to an increase in worker bargaining power, particularly in leisure and hospitality. As the virus comes under control, I expect more workers to flood back into the labor force, likely removing the temporary leverage workers had to quit their jobs and take better ones that would secure faster wage growth.

On Friday, I will also continue to track the sectors that exhibit the largest job shortfalls since February 2020. A temporary dip in leisure and hospitality employment may occur because of the rise in Omicron and the tendency for jobs in that sector to be more sensitive to the ebbs and flows of the pandemic.

Another sector I’ve been watching closely is the government sector, particularly state and local public-sector jobs, which have been slow to rebound compared with the private sector. As shown in Figure B, private-sector employment fell further during the pandemic recession—losing 16.5% of employment—but rebounded faster than state and local government jobs—which initially lost 7.7% of employment. Recently, state and local employment has been floundering and hasn’t seen any improvement in six months.

A significant share of the public-sector shortfall has been in state and local education jobs, a sector that has experienced shortages in a variety of occupations, including both teachers and support staff such as bus drivers and teaching assistants. Fortunately, states and localities can use American Rescue Plan funds to shore up employment and invest in the fragile infrastructure within education, public health, and other vital systems. It is imperative that they do so.

Other metrics to follow within the household survey include what’s happening by various demographic groups. Black unemployment ticked up again in December to 7.1%, while the overall unemployment rate fell to 3.9%. Although the survey exhibits a fair amount of volatility month-to-month, longer-term trends clearly show that white workers have fared better than Black or Hispanic workers at the height of the pandemic recession and in the recovery thus far.

On Friday, the Bureau of Labor Statistics (BLS) will also release their annual benchmark revisions to the payroll survey based on administrative data from state unemployment insurance tax records. There are two important things to note about this release. First, the preliminary benchmark announcement from August suggests a downward revision in nonfarm employment, by 166,000 in March 2021. This reflects a large downward revision in private-sector employment (-421,000) and a large upward revision in government employment (+255,000). Again, these numbers are preliminary and will be updated on Friday.

Second, this benchmarking process will not tell us anything about what has happened with employment changes since March 2021, since each month from March 2021–December 2021 will get adjusted by the same amount. (The total change will however be “wedged” in from April 2020 to March 2021.) It is worth noting that these benchmark revisions are unrelated to the “sample-based” revisions that may occur in the two months following each initial monthly data release.

The household data released on Friday will also reflect updated population estimates for data beginning in January 2022. These population controls change the weights in the household sample to better reflect changes in the population. Notably, these changes are not used to update prior month’s data so caution should be used when comparing December 2021 data to January 2022 statistics in the household survey. The BLS will provide comparisons of some relevant metrics for users to assess the impact of the population controls.

Doug Parker 
Assistant Secretary 
Occupational Safety and Health Administration 
U.S. Department of Labor 
200 Constitution Avenue 
Washington, D.C. 20210 

Re: COVID-19 Vaccination and Testing; Emergency Temporary Standard (OSHA-2021-0007) 

Dear Assistant Secretary Parker, 

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers, and assesses policies with respect to how well they further those goals. EPI submits these comments to urge the agency to adopt an OSHA COVID-19 Standard. COVID-19 is the greatest occupational health crisis that our nation has faced since the passage of the Occupational Safety and Health Act, and its continued impacts have come with great personal and economic costs to workers everywhere. There is an urgent need for a comprehensive standard that would protect workers from the threats of COVID-19.

Since the beginning of the pandemic, workplace exposures have been a major driver of the pandemic. From grocery workers to farm workers, to bus drivers to teachers, to restaurant workers, to construction workers, to poultry workers, to warehouse workers, and more, COVID-19 workplace outbreaks have been a constant threat to workers in every industry. As we approach the third year of this pandemic, workers are still facing a grave and significant risk to COVID-19. Front-line workers–many of whom are women or workers of color–continue to risk their and their families’ lives in order to make a living and provide essential services to the public.

Protecting workers is not just a legal and moral imperative. It’s an economic and human rights imperative. When we fail to protect workers, it affects the health and economic well-being of all of our families and communities. To assure the economy remains open and vibrant, we must mitigate the spread of COVID-19 in the workplace. In all, implementing a comprehensive standard is good public policy: it will reduce deaths and hospitalizations, and it will also increase economic growth and reduce the main inflationary pressures facing the U.S. economy. 

It is well understood that COVID-19 has disproportionately impacted communities of color. These disparities are rooted in historic and ongoing social and economic injustices including disparate access to health care, insufficient wages, and the practice of workplace segregation. Another contributing factor is workers’ ability–or inability–to work safely from home, which differs enormously by race and ethnicity, with Black and Hispanic workers less likely to be able to telework. As a result, Black, Latinx, and other workers of color are more likely to be in front-line jobs, and these communities have disproportional rates of illness and death related to COVID-19. The Black, Latinx, and immigrant workers in meatpacking and poultry plants, for example, were disproportionally impacted by the devastating spread of COVID-19 at their workplace. The Centers for Disease Control and Prevention (CDC) estimates that 87% of all infections in the meat industry occurred among racial and ethnic minorities in the industry.

Because OSHA failed to issue any COVID-19 standards outside of health care, millions of workers got sick at work, many were hospitalized, and many more never recovered fully and are now reeling with the effects of long-haul COVID-19. Untold thousands died, and then the disease spread back into their communities. The U.S. still lacks a comprehensive system to track workplace fatalities and exposures, and as such we do not know the true toll of the pandemic. Evidence suggests that many more COVID-19 related deaths have gone uncounted. However, we do know, for example, that more workers have died from COVID-19 in meatpacking and poultry plants to date during the pandemic than died from all causes in the industry in the past 15 years.

Additionally, in the absence of enforceable workplace safety standards, workers have risked their jobs to take direct action to motivate employers to prioritize their health and safety. Voluntary employer guidance has been ineffective, and employers have even rolled back safety measures despite the Omicron variant surge. Unfortunately, many workers who fought to improve their workplace conditions faced harsh discipline or job loss. A comprehensive and enforceable standard would guarantee greater compliance among employers and would ensure that workers do not unnecessarily risk their lives or jobs.

A comprehensive COVID-19 worker protection standard to mitigate the spread of the coronavirus would have large economic effects as well, even beyond the considerable economic value of deaths and hospitalizations averted. Overall economic growth over the past year has been largely driven by the fall and rise of COVID-19 cases. In the first six months of this year, as case growth fell sharply, gross domestic product (GDP) rose at a 6.5% annualized rate—an extraordinarily fast pace of growth. However, in the third quarter, as the Delta variant surged in the United States in August and September, GDP growth decelerated to just 2.1%.

Rises in COVID cases also impact job growth. In the six months prior to the onset of the Delta variant, job growth averaged 710,000 per month. However, job growth fell to an average of 405,000—still a respectable pace though notably lower than in previous months—as the U.S. experienced a significant spike in cases attributable to the Delta variant. Previous research has also shown positive correlation between employment growth and a state’s vaccination progress. Specifically, between January and October 2021, states with higher vaccination rates experienced faster job growth in leisure and hospitality, two industries that were hard-hit by the pandemic. 

Even more, the economic effects of COVID-19 are by far the largest drivers of the acceleration in U.S. inflation in 2021. Inflation rates are higher than usual because the pandemic has reallocated consumer spending away from services and towards goods, exacerbating supply chain problems. One reason why U.S. inflation has been more pronounced than in other countries is because our COVID-19 case counts have been higher. As a result, public health policy is clearly the most effective economic policy we have to tamp inflation back down.

It is imperative that OSHA issue a COVID-19 worker protection standard to mitigate the spread of COVID-19 in the workplace. No worker should have to sacrifice their livelihood for a paycheck.

A COVID-19 standard must include provisions at a minimum for: 

1. A COVID-19 worker protection plan. This plan must be in writing for employers with more than 10 employees. The plan must be made available to workers and their representatives at no cost. Workers must have input into this plan prior to it being finalized. Workers must be trained in the procedures and policies outlined in the plan.
2. Implementation of mitigation measures for all workers at no cost to employees including: 
   1. Vaccines (including paid time off to access vaccines and to recover from temporary reaction)
   2. Regular testing (twice weekly) 
   3. Providing high quality face coverings to all workers (and respirators if necessary) 
   4. Physical distancing 
   5. Improved ventilation 
   6. Routine cleaning/disinfection and the provision of hand sanitizers and ability to wash hands frequently 
   7. Employee training and education in a language and vocabulary workers understand 
   8. Isolation /Quarantine requirements for sick and exposed workers (including provisions for medical removal pay) 
3. Reporting and recording requirements that include:
   1. Notification to public health agencies of two or more cases of
      COVID-19 of employees present in the workplace within a 14-
      day period
   2. Notification to OSHA of two or more cases of COVID-19 among
      employees present in the workplace within 14 days
   3. Recording and Reporting to OSHA of all employee cases of
      COVID-19 that involved hospitalizations and death
   4. Recording of all work related COVID-19 cases among employees
4. Protections from retaliation from
   1. Reporting a COVID-19 possible or confirmed infection
   2. Requesting improved safety measures
   3. Raising concerns about current protections to the employer,
      employee representative, other employees, a government agency or the
      public such as through print, online, social or any other media.

We urge the agency to move quickly to implement a permanent COVID-19 worker protection standard.

Sincerely,

Ihna Mangundayao 
Policy Assistant
Economic Policy Institute

This final rule replaces the interim final rule that has been in place since May 2021, and in this final guidance from Treasury, three new elements stand out. First, the rule expands governments’ ability to use the funds to hire and retain public-sector employees. Second, the rule provides new options to assist low-income workers and families dealing with the economic impact of COVID. Finally, the rule recognizes “the disproportionate impact of the pandemic on people of color,” and adds additional uses for ARPA funds to address inequities exacerbated by the pandemic.

The $350 billion, passed as part of the American Rescue Plan signed into law by President Biden in March 2021, is designed to help state and local governments mitigate the public health and economic impact of COVID. More than $200 billion has already been distributed, with the rest being disbursed starting in May of this year. Recipient governments can use the funds for many purposes, so long as they fall under one of these broad categories:

• Fighting the pandemic
• Addressing the economic impacts of the COVID pandemic
• Replacing lost revenue for state and local governments
• Providing premium pay for essential workers
• Strengthening water, sewer, and broadband infrastructure

The final rule was developed after reviewing hundreds of public comments, including comments from EPI. While it does not go into effect until April 1, Treasury has indicated that state and local governments can begin using the new rules immediately if they choose. Note: Rulemaking is a regular part of the implementation of major legislation. Rules provide greater specificity and set the parameters under which recipients of funds can use them (see this useful primer here). Treasury can seek repayment of funds spent in a manner inconsistent with the final rule.

Restoring public-sector capacity

The final rule greatly expands the ability of state and local governments to hire and retain public-sector employees. Public employment has not only declined abruptly since the beginning of the pandemic, it has also never fully recovered from the huge job cuts following the Great Recession more than a decade ago. Women and Black workers are typically hit hardest by public-sector jobs cuts, contributing to the ongoing gaps in wages and employment.

The interim final rule only allowed recipient governments to hire staff in order to achieve the same employment levels they had in February 2020. However, as we noted above, many state and local governments still had employment shortfalls in February 2020 relative to pre-Great Recession trends. To reach truly adequate levels of staffing—particularly when COVID mitigation places huge additional demands on schools and public agencies—EPI recommended that Treasury allow governments to use ARPA funds to hire at a level 5-10% above the pre-COVID baseline. The final rule does this, allowing recipients to increase payrolls to 7.5% above the pre-pandemic level. It also allows the use of ARPA funds to offer retention incentives and other forms of extra compensation to keep employees from moving to different jobs, which is important as we are in one of the most fluid job markets we’ve ever seen.

There are still 900,000 fewer public-sector jobs compared with before the pandemic. Nearly two-thirds of the job losses are in state and local governments—and that number is only worsening. It may seem beside the point to allow governments to exceed pre-pandemic levels when they are so far below, but this is where flexibility can be helpful. In the final rule, a new standard allowance of $10 million further supports smaller local governments to calculate revenue loss and spend this amount on government services. If a state government, for example, isn’t able or willing to restore public-sector jobs and services, now cities and counties have the chance to use ARPA funds to cover the gaps in public services. The devastation of the pandemic has shown all too clearly that the public sector needs to be strengthened, and the new rule will help.

More options to help low-income workers and their families

COVID has been especially hard for those who were in dangerous situations prior to the pandemic. Low-income workers are less likely to have been vaccinated, are more likely (even if vaccinated) to have to stop working to care for someone else with COVID, and often work in dangerous occupations that increase their risk of becoming ill.

Direct economic assistance to low-income workers is a simple and effective way to support them through the ongoing economic shocks of the pandemic. The final rule expands options already available to policymakers. For example, they are now allowed to use ARPA funds for financial services to the “unbanked and underbanked,” which will make it easier to help those without regular access to our financial system.

The rule also expands the ability of governments to help low-income families with health insurance costs. While the interim final rule only allowed the use of ARPA funds to help with the costs of COVID treatment, the final rule allows for funds to be used for health insurance deductibles, co-pays, or premiums of impacted households, even if those costs were not directly related to COVID.

Strengthening water, sewer, and broadband infrastructure, and ensuring equitable access to those jobs

Additionally, the final rule expands eligible uses for investments in water and sewer infrastructure, including lead remediation and water quality testing projects needed in schools and child care facilities. The range of eligible stormwater management projects has grown, which will help communities address the increasing stress on water and sewer infrastructure caused by long-standing underinvestment and the impacts of climate change.

The final rule also further broadens and clarifies eligibility for broadband infrastructure investments and continues the interim final rule’s recommendation that contracts for major projects incorporate project labor agreements (PLAs), community benefit agreements, local hire provisions, or prevailing wage standards to ensure public spending helps create equitable access to quality jobs. State and local governments need to set strong labor standards to ensure that water, sewer, and broadband infrastructure projects funded by ARPA dollars provide good jobs at good wages. Worker power is an important part of safely exiting the pandemic.

Undoing the pandemic’s disproportionate impact on people of color

The pandemic has only heightened existing racial inequities. Black women make 11% to 27% less than white men in essential jobs like education, medicine, and child care, and Black and Hispanic workers are less likely to be able to telework. While the 2020 CARES Act and related legislation helped mitigate the worst economic impacts of the pandemic, racial gaps in wages and employment are stubbornly persistent, with Black workers more likely to lose their jobs and less likely to return to work, as the economy has ebbed and flowed.

The final rule has expanded the allowed uses of funds to help households and communities disproportionately impacted by the pandemic. A key area is housing. As Harvard’s Joint Center for Housing Studies has shown, Black and Hispanic renters face a greater threat of eviction during the pandemic, with the risk especially greater among older renters of color.

The most recent Census data show that 11% of all renters are not at all confident in their ability to pay rent. That number increases to 16% of Black renters and 17% of Hispanic renters. The final rule expands allowed uses of ARPA funds to increase rental assistance, relocate families to neighborhoods with higher economic opportunity, and improve vacant and abandoned properties to create more affordable housing.

The rule also confirms the interim final rule’s protections for those experiencing housing insecurity during the pandemic. More programs will be allowed like the one in Kansas City, for instance, which used ARPA funds to provide legal counsel to all tenants facing eviction. Secure housing leads to better health, educational, and employment outcomes, and state and local governments should make it a high priority as we continue to struggle with the Omicron variant.

Eliminating obstacles to premium pay for essential workers

The final rule also expands allowed uses of premium pay (often called hazard pay) for essential workers. Premium pay gives policymakers an option to address a four-decade pattern of increasing income inequality that is leaving Black and Brown workers further behind. Workers of color are far more likely to be employed in the front-line occupations that are eligible for premium pay. Those working in jobs where they are exposed to COVID-19 every day are more at risk of contracting the virus and spreading it to their families and loved ones.

State and local governments may have been hesitant to provide premium pay because they were not sure who was eligible to receive it, but the final rule should dispel that uncertainty. There is a list of occupations eligible for premium pay, covering health care, food service, education, logistics, and other parts of our economy that we all discovered were truly essential these past two years. The steps needed to determine if eligible workers perform “essential work” are easy to understand and leave little room for error.

Additionally, the final rule clarifies that recipients of premium pay should be earning at or less than 150% of their state or county’s average annual wage and should be non-exempt employees under the Fair Labor Standards Act. Premium pay to eligible workers not meeting those requirements will require written justification to the Treasury Department.

So far, only a few states have considered premium pay for essential workers. More should, and local governments ought to do so as well.

State and local governments should use fiscal relief funds to boost the recovery

The final rule should eliminate any remaining uncertainty on the part of state, territorial, tribal, and local governments about what are and are not allowed uses of ARPA funds. Now is the time to spend those funds. Almost half the dollars allocated to states in 2021 remain unspent, and the rest of the $350 billion will be coming soon. By leaving ARPA dollars unspent, state and local governments will not help end the pandemic, will not strengthen their states’ economies, and will not help address inequities.

Policymakers should engage community groups, workers, and families in need, and start getting these funds to the people and places where they’ll have the greatest impact.

As we enter year three of the COVID-19 pandemic, there likewise remains no refuge from the ever-present hazard of coronavirus exposure for millions of front-line workers whose jobs often require in-person work, long hours in unventilated spaces, frequent contact with co-workers or the public, and no guarantee of paid leave or health insurance.

Policy failures are contributing to untold numbers of worker deaths

Since early in the pandemic, EPI research sounded the alarm that weak labor protections, eroded worker power, and economic inequality were leaving working people and particularly low-wage workers—disproportionately women and workers of color—to bear the greatest costs of the pandemic.

Studies of COVID-19 mortality data reflect the devastating impact of policy failures to protect front-line workers. Among multiple factors contributing to racial disparities in COVID-19 mortality rates are distinctions between who can and cannot work safely from home during the pandemic. Data show telework during the pandemic has been more common for workers with advanced degrees, and less likely for Black and Hispanic workers, regardless of education levels. If all U.S. residents experienced the same COVID-19 mortality rates as college-educated white individuals, there would have been 48% fewer COVID-19 deaths among adults overall in 2020 and 89% fewer deaths among Black and Brown adults ages 25 to 64 years old. While it is likely we are experiencing the greatest workplace death toll and largest mass disabling event in U.S. history, even these disturbing numbers tell only part of the story.

The U.S. still lacks a centralized system for tracking pandemic workplace exposures or fatalities, and mounting evidence suggests official COVID-19 death counts across the country represent a significant undercount. Workplace fatality data released at the end of 2021 by the U.S. Bureau of Statistics don’t include workers who died after contracting COVID-19 at work. An October 2021 report from the Congressional Select Subcommittee on Coronavirus showed infection and death rates among meatpacking workers in 2020 were at least three times as high as previously thought, while noting that available data remain incomplete. Unions and worker advocates continue to attempt to fill the vacuum with sobering digital memorials listing names and sometimes faces of workers lost to COVID-19, and crowd-sourced databases for reporting worker fatalities.

Too many workplaces are becoming more hazardous, not less

We face a dangerous juncture as we enter 2022. We know the deadly risks COVID-19 poses for workers, especially for Black, Brown, and immigrant workers. And we know a great deal about proven measures employers can take to mitigate these risks. Some unionized workers have had the power to compel employers to maintain recommended elements of infection control plans including ventilation, social distancing, high-quality personal protective equipment (PPE), paid leave, and on-site testing and contact tracing. But most workers still lack the power to demand safe work, and right now many workplaces are becoming more hazardous, not less.

Unions and advocates have called for comprehensive, enforceable COVID-19 workplace safety standards since the start of the pandemic. Voluntary employer “guidance” has proven predictably ineffective, and many employers have pulled back on safety measures in place at previous stages of the pandemic. COVID transmission has surged inside Amazon warehouses that rolled back earlier COVID safety policies like in-house testing, extended paid breaks, social distancing, and masking. While encouraging employees to seek vaccination, few retail employers are adopting (or reinstating) other workplace safety precautions amid the Omicron variant surge, undermining progress and endangering workers and the public anew. Meatpacking workers continue to report management pressure to continue working while sick, and major companies like Delta airlines are cutting back on emergency paid leave just when workers need it most.

Employer pressure at year’s end resulted in the Centers for Disease Control and Prevention (CDC) scaling back isolation or quarantine recommendations for ill or exposed workers, while the Occupational Safety and Health Administration (OSHA) closed out 2021 by withdrawing its Emergency Temporary Standard (ETS) for health care. OSHA’s important vaccine or test mandate is poised to take effect in 2022, but does not yet include standards on key measures like ventilation, high-quality PPE, or social distancing. Emergency sick leave was mandated for some employers under the Families First Coronavirus Response Act (FFCRA) in 2020, but Congress allowed FFCRA to expire a year ago. Depending on where they live, some workers may be covered by emergency state or local COVID-19 protections, but nearly all these measures are temporary.

Union strategies and worker collective actions provide roadmaps for making work safe

While unions continue to call for the comprehensive federal OSHA workplace safety standards all workers deserve, it’s increasingly clear that there’s no path out of the ongoing pandemic without empowering workers in many more U.S. workplaces. Vaccines are one crucial ingredient of pandemic workplace safety, but simultaneously allowing employers to abandon other workplace protections will only serve to undermine vaccines’ effectiveness. Implementation of the new OSHA vaccine-or-test mandate in 2022 must be viewed as just one essential component of COVID-19 workplace safety plans, which must involve workers in order to be effective. The good news is that we have organizing and policy roadmaps to follow.

We can learn from the effectiveness of the OSHA COVID-19 health care Emergency Temporary Standard (ETS), which saved lives of nurses, doctors, staff, and patients during the six months it was in effect in 2021. The health care ETS established the first national enforceable standard for employers to implement COVID-19 hazard control plans, and in 2022 its provisions should be made permanent and extended to other industries as originally intended.

We can also learn from the heavily unionized airline industry, where layered safety protocols including high-quality air filtration, leave policies, and mask mandates temporarily made the airplane cabin “one of the most controlled environments in public life” and one of the safest workplaces. We can learn from the comprehensive COVID safety plans negotiated by entertainment industry unions to ensure safe reopening of stages and sets from Broadway to Hollywood. We can learn from the examples of collective action taken by workers across the country who’ve used union safety committees to negotiate COVID protections, exercised concerted activity rights to refuse unsafe work, won new paid sick leave benefits in tandem with implementation of vaccine mandates, and organized new unions to gain a seat at the table in setting workplace safety policies.

Without federal safety standards, workers are organizing, and states must act

Workers have had to fight for their lives and use collective action to protect each other since the start of the pandemic. In the absence of strong federal COVID safety standards, workers will have to fight harder than ever in 2022 to motivate employers, states, and cities to act. Lawmakers concerned about worker safety can kick off new legislative sessions by reviewing legal options for protecting and empowering workers and pushing for recommended policies for protecting worker safety and health in the COVID crisis. States can pass, build on, and improve enforcement of their own worker protection standards. States can immediately invest American Rescue Plan funds to expand vaccine outreach and access to rapid tests, high-quality masks, and paid sick leave.

States can also ensure that unemployment systems are doing what they are intended to do during a deadly pandemic. Workers who refuse unsafe working conditions that an employer has failed to address should not be disqualified from receiving unemployment, and states should consider the refusal to perform unsafe work as “good cause” to leave a job. Because strikes are often necessary to force action on safety and health, all states should provide unemployment insurance for strikers.

Where state legislatures and governors instead continue to block safety measures and put lives at risk, workers will have to rely on each other and continue organizing for collective survival. Existing organizer training programs, support networks, resource guides, digital tools, and COVID workplace safety expertise that unions have built up throughout the pandemic can help, and those who care about workers’ health and safety must do everything possible to expand union organizing capacity in the coming year, especially in states where few or no worker protections exist. And with workers’ lives hinging on the right to organize, passing the Protecting the Right to Organize (PRO) Act becomes all the more important in 2022.

It’s too late to save the lives already lost to preventable workplace coronavirus exposures, but it’s not too late to prevent more. The only path out of a seemingly endless pandemic—and the quickest path to economic recovery—is to stop the spread of coronavirus. And in 2022, the path to controlling the spread starts with many more workers gaining the power to demand safe work.