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For Now, Pay Workers to Stay Home

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For Now, Pay Workers to Stay Home

The Wall Street Journal March 24, 2020
EconomicsEmploymentBudget
Health PolicyOther

Service employees need aid during the lockdowns, but long-term cash transfers would leave them worse off.

Desperate times need extreme measures—and only in the face of the new coronavirus does it make sense for the federal government to send money directly to every American. Cash payments are the most direct way to reduce the economic harm that lockdowns will inflict on the one-fifth of workers employed in vulnerable service industries.

More than 32 million Americans work in retail trade, hospitality and leisure. In the past half-century, face-to-face services have become the great employer of less-educated Americans and the best hope for escaping a bleak, jobless future. As machinery replaced human labor, first on farms and then in factories, people found employment doing interpersonal tasks that are far harder to mechanize. A machine can make and even serve your coffee, but only a friendly barista can convincingly tell you that you look great today while doling out a latte.

Large metropolitan areas have thrived as places for work based on close, in-person interaction—information businesses with creative and professional workers, as well as services that offer a variety of retail products. The Covid-19 pandemic threatens the latter part of that interaction economy. Rich and poor alike need to self-isolate during this pandemic, but rich and poor can experience quarantine quite differently. If your job depends on selling directly to consumers and you struggle to make rent each month, this moment could be terrifying. Cash transfers are the simplest way of staving off the suffering.

Continue reading the entire piece here at The Wall Street Journal (paywall)

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Edward L. Glaeser is the Glimp professor of economics at Harvard University, a senior fellow at the Manhattan Institute, and contributing editor at City Journal.

Photo by MarianVejcik/iStock

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