COVID Paid Leave Proposals/Childcare Crisis
Finance, Round Table on Paid Leave Proposals in the COVID Era, Thursday, June 18, 2020
WM1: None of this is new. The Old Testament prophets and Jesus himself laid the blame for Israel's troubles on those who ignored the cry of the poor and the call to reform. The reality probably has as much to do with location (and no, this is not an invitation to the acolytes of Henry George to weigh in).
WM: Poverty is a state of mind as much as an economic condition. It is hard to be poor. If you are working, you most likely have to pick and ACA Silver policy, which means deductibles that cannot be paid and premiums that are harder to afford than a working poor budget can managed. Such stress ends marriages, which only leads to worse financial stress when child support must be paid (leaving both parties at subsistence) and the establishment of a second household.
F: Poverty is a state of mind as much as an economic condition. It is hard to be poor. Sick leave is a rarity for the working poor, now called essential workers. When you are sick, you must chose between working and eating, regardless of consequences for other workers. You must also use the emergency room rather than private doctors, thus increasing transmission risk. Insurance is often inadequate (especially for undocumented workers). Unless the family qualifies for Medicaid, they most likely have to pick an ACA Silver policy, which means deductibles that cannot be paid and premiums that are harder to afford than a working poor budget can managed. Such stress ends marriages, which only leads to worse financial stress when child support must be paid (leaving both parties at subsistence) and the establishment of a second household.
WM/F: My marriage ended for such pressures (especially since working became harder with a disability). My wife must now contend with my daughter’s disabilities in learning and expression – with much of that treatment outside of what her insurance covers. While Social Security pays an income for my daughter, it is not enough to meet her needs nor does it include Medicare. It would if she were with me, but a young lady is better off with her mother.
We are still better off. Emergency room visits at night are necessary to really understand what the Affordable Act did not cover. On any weeknight, families fill the waiting rooms because they cannot see a primary care physician during the day. If they don’t work, they are not paid, whether for the illness of their child or themselves.
In January, we commented that sick leave is especially essential to prevent the spread of disease. Unless one argues that it is ultimately good for the population to catch minor illness to build immunity, once a worker or their child falls ill, having to work while ill can be torture. With Covad 19, the lack of suck leave can be a death sentence, although more likely for care givers than children.
Conditions have been worse and have been justified by the reactionary same nonsense that claims that in the end, the market will sort everything out. Keynes would respond that in the long run, we are all dead. Let me add that one should not have to wait to die for a day off. Marx would agree. For the market to work, there must be both perfect information and no barriers to entry or exit, no black lists, no private salary information. No such luck.
WM: Increasing the general wage level, through higher minimum wages, will remove workers from poverty. $15 was so 2000s. The new ask should be $20. The concept of being a member of the working poor should be banished from the national conversation with an eventual $20 minimum wage for both employment and training program participation, starting with $15 immediately. This wage level should adjust for inflation automatically. The best support for state budgets is to make sure that everyone is trained up to their potential.
WM/F/C: The perception that doing the right thing makes a business non-competitive is the reason we enact minimum wage laws. Because the labor product is almost always well above wages paid, few jobs are lost when this occurs. Higher wages simply reduce what is called surplus value, and not only by Marx. Any CFO who cannot calculate the current productive surplus will soon be seeking a job with adequate wages and sick leave.
The requirement that this be provided ends the calculation of whether doing so makes a firm non-competitive because all competitors must provide the same benefit. This applies to businesses of all sizes. If a firm is so precarious that it cannot survive this change, it is probably not viable without it.
WM: The low wage economy does benefit from the lower prices that may result from them, but a two-tier economy is abhorrent in modern society. Indeed, higher wages, benefits and subsidies provide a bigger bang for the buck than is lost to the donor class. Indeed, the rich will likely see higher profits when more people have more money, although they may find it harder to obtain cheap household labor.
WM/F/C: We have included as our usual attachment the latest version of our tax reform proposals. Please refer to the provisions for a Subtraction VAT regarding the remainder of these comments, as well as our treatment of individual payroll taxes, which explain why a child tax credit is better than an EITC. Applying for an EITC is part of why it is expensive to be poor. For most, outside help is needed to calculate it. Paying it is a cost of poverty.
Our main proposed employer-paid subtraction value added tax. This levy would be used more to channel tax expenditures to employees rather than through categorical or block grants. The most important feature is an expanded refundable child tax credit, which would be distributed with pay and set to provide income at median income levels.
WM/F/C: The S-VAT could be levied at both the state and federal levels with a common base and tax benefits differing between the states based on their cost of living (which would be paid with the state levy). The federal tax would be the floor of support so that no state could keep any part of its population poor, including migrants. It is time to end the race to the bottom and its associated war on the poor.
C: Like sick leave, these costs could be an offset to the employer paid S-VAT. In the interim, the benefit could be funded as a tax credit for corporate, pass through and self-employment taxes.
WM: Poverty becomes multi-generational when parents are not functionally literate in standard English. The only way to get children out of poverty is to educate the parents while meeting their opportunity costs (paying them to attend class). The S-VAT will facilitate such human capital expenditures, with credits to support tuition, wages and benefits for low-skill workers from ESL and remedial education to apprenticeship. These benefits can be used in cooperation with existing workforce investment boards, community colleges and economic development agencies.
Private education providers should also be included in the mix, including and especially the Catholic education system. Blaine Amendments need repeal, opposition to unions ended and a focus on non-college bound students encouraged.
Going back to healthcare, dealing with seniors is absolutely necessary for states to get out of their perception of poverty so that they can fully commit to doing so for Children. Medicaid for senior citizens and the disabled is a huge contingent liability for some states. In his New Federalism proposals, President Reagan offered to assume these costs in exchange for state funding of all other federal support. The first half of this proposal should be implemented in the form of a new Medicare Part E with no requirement for local funding.
The remainder of health costs would be paid through employer subsidies to low-wage trainees, as described above through an S-VAT, with state goods and services taxes (invoice VAT) covering cash, food and health benefits for unattached non-workers until they can be placed in the appropriate employment or disability program (including substance abuse intervention).
Attachment – Tax Reform, Center for Fiscal Equity, February 21, 2020
Subcommittee on Worker and Family Support, Combating Child Poverty in America,- March 11, 2020
Subcommittee on Worker and Family Support, The Child Care Crisis and the Coronavirus Pandemic, June 23, 2020
Childcare:
We believe that childcare is best provided by the employer or the employee-owned or cooperative firm. In the long run, capitalist firms will have to provide this benefit to stay competitive.
On-site care, with separate spaces for well and sick children, as well as an on-site medical site for sick employees, will uncomplicate the morning and evening routine. Making yet another stop in an already busy schedule adds to the stress of the day. Knowing that, if problems arise, parents can be right there, will help workers focus on work.
Larger firms and government agencies can more easily provide such facilities. Indeed, in the Reeves Center of the District Government, such a site already exists. When the crisis is over, a staff visit would prove illuminating.
Smaller firms could make arrangements with the landlord of the building where offices or stores are located, including retail districts and shopping malls. For security reasons, these would only serve local workers, but not retail customers.
Subcommittee on Worker and Family Support, The Child Care Crisis and the Coronavirus Pandemic, June 23, 2020
Childcare:
We believe that childcare is best provided by the employer or the employee-owned or cooperative firm. In the long run, capitalist firms will have to provide this benefit to stay competitive.
On-site care, with separate spaces for well and sick children, as well as an on-site medical site for sick employees, will uncomplicate the morning and evening routine. Making yet another stop in an already busy schedule adds to the stress of the day. Knowing that, if problems arise, parents can be right there, will help workers focus on work.
Larger firms and government agencies can more easily provide such facilities. Indeed, in the Reeves Center of the District Government, such a site already exists. When the crisis is over, a staff visit would prove illuminating.
Smaller firms could make arrangements with the landlord of the building where offices or stores are located, including retail districts and shopping malls. For security reasons, these would only serve local workers, but not retail customers.
WM1: None of this is new. The Old Testament prophets and Jesus himself laid the blame for Israel's troubles on those who ignored the cry of the poor and the call to reform. The reality probably has as much to do with location (and no, this is not an invitation to the acolytes of Henry George to weigh in).
WM: Poverty is a state of mind as much as an economic condition. It is hard to be poor. If you are working, you most likely have to pick and ACA Silver policy, which means deductibles that cannot be paid and premiums that are harder to afford than a working poor budget can managed. Such stress ends marriages, which only leads to worse financial stress when child support must be paid (leaving both parties at subsistence) and the establishment of a second household.
F: Poverty is a state of mind as much as an economic condition. It is hard to be poor. Sick leave is a rarity for the working poor, now called essential workers. When you are sick, you must chose between working and eating, regardless of consequences for other workers. You must also use the emergency room rather than private doctors, thus increasing transmission risk. Insurance is often inadequate (especially for undocumented workers). Unless the family qualifies for Medicaid, they most likely have to pick an ACA Silver policy, which means deductibles that cannot be paid and premiums that are harder to afford than a working poor budget can managed. Such stress ends marriages, which only leads to worse financial stress when child support must be paid (leaving both parties at subsistence) and the establishment of a second household.
WM/F: My marriage ended for such pressures (especially since working became harder with a disability). My wife must now contend with my daughter’s disabilities in learning and expression – with much of that treatment outside of what her insurance covers. While Social Security pays an income for my daughter, it is not enough to meet her needs nor does it include Medicare. It would if she were with me, but a young lady is better off with her mother.
We are still better off. Emergency room visits at night are necessary to really understand what the Affordable Act did not cover. On any weeknight, families fill the waiting rooms because they cannot see a primary care physician during the day. If they don’t work, they are not paid, whether for the illness of their child or themselves.
In January, we commented that sick leave is especially essential to prevent the spread of disease. Unless one argues that it is ultimately good for the population to catch minor illness to build immunity, once a worker or their child falls ill, having to work while ill can be torture. With Covad 19, the lack of suck leave can be a death sentence, although more likely for care givers than children.
Conditions have been worse and have been justified by the reactionary same nonsense that claims that in the end, the market will sort everything out. Keynes would respond that in the long run, we are all dead. Let me add that one should not have to wait to die for a day off. Marx would agree. For the market to work, there must be both perfect information and no barriers to entry or exit, no black lists, no private salary information. No such luck.
WM: Increasing the general wage level, through higher minimum wages, will remove workers from poverty. $15 was so 2000s. The new ask should be $20. The concept of being a member of the working poor should be banished from the national conversation with an eventual $20 minimum wage for both employment and training program participation, starting with $15 immediately. This wage level should adjust for inflation automatically. The best support for state budgets is to make sure that everyone is trained up to their potential.
WM/F/C: The perception that doing the right thing makes a business non-competitive is the reason we enact minimum wage laws. Because the labor product is almost always well above wages paid, few jobs are lost when this occurs. Higher wages simply reduce what is called surplus value, and not only by Marx. Any CFO who cannot calculate the current productive surplus will soon be seeking a job with adequate wages and sick leave.
The requirement that this be provided ends the calculation of whether doing so makes a firm non-competitive because all competitors must provide the same benefit. This applies to businesses of all sizes. If a firm is so precarious that it cannot survive this change, it is probably not viable without it.
WM: The low wage economy does benefit from the lower prices that may result from them, but a two-tier economy is abhorrent in modern society. Indeed, higher wages, benefits and subsidies provide a bigger bang for the buck than is lost to the donor class. Indeed, the rich will likely see higher profits when more people have more money, although they may find it harder to obtain cheap household labor.
WM/F/C: We have included as our usual attachment the latest version of our tax reform proposals. Please refer to the provisions for a Subtraction VAT regarding the remainder of these comments, as well as our treatment of individual payroll taxes, which explain why a child tax credit is better than an EITC. Applying for an EITC is part of why it is expensive to be poor. For most, outside help is needed to calculate it. Paying it is a cost of poverty.
Our main proposed employer-paid subtraction value added tax. This levy would be used more to channel tax expenditures to employees rather than through categorical or block grants. The most important feature is an expanded refundable child tax credit, which would be distributed with pay and set to provide income at median income levels.
WM/F/C: The S-VAT could be levied at both the state and federal levels with a common base and tax benefits differing between the states based on their cost of living (which would be paid with the state levy). The federal tax would be the floor of support so that no state could keep any part of its population poor, including migrants. It is time to end the race to the bottom and its associated war on the poor.
C: Like sick leave, these costs could be an offset to the employer paid S-VAT. In the interim, the benefit could be funded as a tax credit for corporate, pass through and self-employment taxes.
WM: Poverty becomes multi-generational when parents are not functionally literate in standard English. The only way to get children out of poverty is to educate the parents while meeting their opportunity costs (paying them to attend class). The S-VAT will facilitate such human capital expenditures, with credits to support tuition, wages and benefits for low-skill workers from ESL and remedial education to apprenticeship. These benefits can be used in cooperation with existing workforce investment boards, community colleges and economic development agencies.
Private education providers should also be included in the mix, including and especially the Catholic education system. Blaine Amendments need repeal, opposition to unions ended and a focus on non-college bound students encouraged.
Going back to healthcare, dealing with seniors is absolutely necessary for states to get out of their perception of poverty so that they can fully commit to doing so for Children. Medicaid for senior citizens and the disabled is a huge contingent liability for some states. In his New Federalism proposals, President Reagan offered to assume these costs in exchange for state funding of all other federal support. The first half of this proposal should be implemented in the form of a new Medicare Part E with no requirement for local funding.
The remainder of health costs would be paid through employer subsidies to low-wage trainees, as described above through an S-VAT, with state goods and services taxes (invoice VAT) covering cash, food and health benefits for unattached non-workers until they can be placed in the appropriate employment or disability program (including substance abuse intervention).
Attachment – Tax Reform, Center for Fiscal Equity, February 21, 2020
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