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Opinion We need to shore up families for emergencies and a return to work

People who lost their jobs wait in line to file for unemployment in Fayetteville, Ark., last month.
People who lost their jobs wait in line to file for unemployment in Fayetteville, Ark., last month. (Nick Oxford/Reuters)
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Rajiv Shah is president of the Rockefeller Foundation. Jason Grumet is founder and president of the Bipartisan Policy Center.

The suffering that has descended on our nation is real: real in terms of lost lives, overwhelmed health systems and pervasive fear; real in terms of record-setting unemployment and vanished savings; real in terms of choosing between paying rent or buying food.

Throughout our history, crises have led to change. The Great Depression gave rise to the creation of Social Security. The financial crisis of 2008 led to a sounder, more responsible banking system.

Full coverage of the coronavirus pandemic

Now, we must change again. The reality is that when the covid-19 crisis hit, nearly 80 percent of families reported living paycheck to paycheck. In the decade since the 2008 financial crisis, productivity in the United States has soared, but wages have not kept pace.

For families to recover economically, governors and the White House must continue to ramp up testing to both save lives and restart economic activity.

But beyond testing, we must adopt a new Blueprint for Empowering Working Families. Such a plan was necessary before the crisis; it is more urgently needed now.

As we come out of the pandemic, we must strengthen the economic security and resiliency of our working families. Three foundational steps are needed to build an economic system capable of weathering future uncertainty and crisis.

1. Incentives to build emergency savings

Just as the United States is certain to move forward with a larger stockpile of critical health-care supplies to protect our physical health, we also need to create a larger stockpile of individual family savings for our economic health. Fewer than half of working-age Americans have saved up enough to cover at least three months of expenses. Evidence shows that the key to encouraging saving is to make it automatic.

Bipartisan legislation before Congress would reduce the costs and obstacles to creating emergency savings accounts and enable companies and employees to automatically deposit a small amount of each paycheck into them. Now the next step is to expand access to these accounts, ensure that the accounts follow workers when they change jobs, and then develop savings plans for people with multiple employers.

2. A permanent family leave policy

American workers need greater access to paid sick leave and paid family leave. How many illnesses have been spread because of inadequate paid leave, whether by employees working while sick or because working parents can’t afford to keep sick children home from school?

Congress acted two months ago in bipartisan fashion to include emergency paid sick and paid family leave policy in the Families First Coronavirus Response Act and expanded unemployment insurance to provide financial support to those furloughed by their employers. It would be even better for Congress to continue the collaboration to permanently require paid sick days for all workers. Congress should then continue this bipartisan collaboration to enact a permanent paid family leave policy.

Hourly workers, particularly in the food industry, cannot be asked to choose between wages and spreading infection; parents cannot be asked to choose between wages and staying home with a sick child; those with long-term illnesses cannot be asked to choose between working while sick and job loss. The ramifications of implementing this policy will make for stronger families, and a stronger society.

3. Expanding the earned income tax credit

As the country reopens, we must make clear the value of returning to work. Reforming and expanding the earned income tax credit (EITC) is the best way to increase cash flow for low-wage workers and families. In its current form, the EITC has lifted more than 10 million Americans out of poverty and provides a helping hand to another 18 million, diminishing reliance on government handouts.

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We have a bipartisan opportunity to increase the value of this credit, providing more support to families while drawing workers back into the labor force. At the same time, we should enhance program administration and reduce improper payments, which have long served as an obstacle to meaningful reform.

What was clear during the Great Depression, the financial crisis of 2008 and now the pandemic of 2020 is that our safety net is neither perfect nor partisan; it does not distinguish between red states and blue states. Despite the division that has dominated our politics for the past decade or more, the public health and economic needs born of the pandemic create an opportunity to strengthen the working families that are the real bedrock of the United States.

Read more:

Read a letter responding to this opinion piece

E.J. Dionne Jr.: The pre-coronavirus status quo is not good enough

David Von Drehle: I was treated for covid-19. The unemployment pandemic needs just as much tending.

Bill Cassidy: Republican senator: Yes, Congress should send money to state and local governments

Jennifer Rubin: Without child care, the economy won’t restart

Bill Gates: Here are the innovations we need to reopen the economy

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