What Does the New Stimulus Package Mean for Workers?
On April 24th, a $484 billion federal stimulus package was signed into law. The legislation, called the Paycheck Protection Program and Health Care Enhancement Act, will serve as an expansion of some programs from the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, while also functioning as a stopgap measure as Congress negotiates a new larger stimulus plan. Although the $484 billion dollar package does not contain the level of spending directed at individuals and workers as in the CARES Act, it does contain significant funding that will impact the lives of working people across the country.
What is in the new stimulus package?
- $310 billion for the Paycheck Protection Program: The Paycheck Protection Program provides loans to businesses with fewer than 500 employees for a period of eight weeks. Loans can be fully or partially forgiven if the business spends 75% of the loan on maintaining payroll along with necessities such as mortgage, rent or utilities. Gig workers, freelancers and self-employed workers can all qualify for lending from the program. This money is distributed by commercial banks and lenders. However, in this new stimulus package, $60 billion will be reserved for community banks and small lenders. Funding for the Paycheck Protection Program ran out leading to the passage of this new round of loans.
- $75 billion for hospitals: This includes additional funding to hospital and healthcare providers for reimbursing costs associated with Covid-19. The Department of Health and Human services will distribute the funding as grants.
- $25 billion for testing: New testing capacity including $11 billion for state, localities, and tribes, $1 billion for the Centers for Disease Control’s support programs for testing, $2.8 billion for the National Institute of Health and the Biomedical Advanced Research and Development Authority to increase testing technology, $600 million for Community Health Services, $225 million for Rural Health clinics and $1 billion for covering cost of testing for uninsured individuals.
- $60 billion for the Economic Injury Disaster Loan Program: This program provides loans for businesses experiencing temporary hardship due to COVID-19, and can give an advance of up to $10,000 (loans are currently being limited to $15,000). Loans can be used to pay debts, bills, accountable payables and payroll. As with the Paycheck Protection Program, funding for this program ran out in the weeks leading up to the passage of the legislation.
What does it mean for workers?
Further funding for loans for small businesses and individuals could be a significant benefit to workers. Small businesses may be able to keep workers on payroll, and gig workers and independent contractors who often do not qualify for other federal and statement programs could receive forgivable loans with lower interest rates (these workers may qualify for Pandemic Unemployment Assistance). However, significant issues have emerged around the equitable distribution of loans intended for small businesses and non-traditional workers. Publicly traded companies and large chains such as Shake Shack and Sweetgreen returned their loans after outcry over their utilization of the program. While the U.S. Treasury Department has tightened restrictions, concerns remain around access to loans, especially during the uncertainty and confusion caused by the pandemic. In New York City, even as the outer boroughs face the worst impacts of the crisis, Manhattan businesses have taken 66% of all loans supplied by a city program. If these types of inequities occur for the federal programs, some of the most vulnerable workers may not be able to receive the proper economic support, especially if funds are depleted quickly. However, providing funding to community and individual lenders may help to alleviate some of these issues.
Expanded health care funding and enhanced testing will also be vital for the well-being of hospital and low-wage workers. Health care providers have reported having to bid high prices for PPE, while other hospitals have reduced staff and salaries significantly. This hospital funding will help protect essential workers and ensure proper safety for patients. Expanding access to testing will also benefit the various types of workers who are often excluded from the health care system or regular health care coverage. The $1.8 billion in additional funding for rural health centers, community providers and testing uninsured individuals could most benefit low-wage workers. These individuals may have less access to testing providers or cannot afford to pay for these services, and may be less likely to have access to larger health care providers. Enhancing testing options will improve worker safety and support those struggling financially during this time.