VTDigger posts regular coronavirus updates on this page. You can also subscribe here for daily coronavirus news. Please send your Covid-19 questions to coronavirus@vtdigger.org
The Covid-19 pandemic has thrown into sharp relief some of the forces that make the work experience unfair.
Many of the occupations that bring workers in closest contact with the public – and therefore in the most peril regarding infection with Covid-19 – are among the lowest-paid, according to an analysis of data from the Bureau of Labor Statistics. Those include cashiers and retail salespeople, whose annual pay hovers around $30,000, according to the BLS, and police officers, who make about $50,000.
The health care workers who have some of the most dangerous jobs, working with ill people in confined settings, have an average pay scale of $70,000.
State orders that closed businesses in March disproportionately struck restaurants, child care centers, salons, gyms, and retail stores, sectors that traditionally pay little. With no warning, many workers didn’t have any savings and were immediately vulnerable to homelessness and hunger. Vermont Foodbank has reported an increase of up to 100% in demand for food.
“Anyone in those areas has been really disproportionately impacted,” said Sen. Jane Kitchel, D-Caledonia, who is leading efforts to create a state grant program that would compensate some front-line workers with $1,000 a month. The proposal — which is aimed at people such as grocery and health care workers – is now before the House. “There are also those in jobs that put themselves at higher risk, employees of nursing homes, residential care facilities – you’ve got the anxiety in terms of will I get sick, or worse, will a family member somehow get sick.”
Early responses to inequities
John Thrailkill started hearing from workers about fairness as soon as Gov. Phil Scott declared a state of emergency in mid-March. The workers who could do their jobs off-site immediately left the offices of his Rochester business, Advanced Illumination.
Thrailkill said it was initially difficult to convince his employees that his company – which makes lighting for medical and pharmaceutical companies – was an essential business and should stay open. He showed workers a list of all Advanced Illumination’s customers, which includes a national laboratory.
He felt tension between those who could work remotely, and those who stayed on the manufacturing floor.
“People were scared,” Thrailkill said. So he decided to institute what he called “loyalty pay,” increasing wages by 30% for people who were compelled to come in to work.
“That helped a lot because it made people feel like this was fair,” said Thrailkill, who has about 35 employees. “The people who can stay home aren’t getting that pay.”
The topic of fairness, particularly when it comes to those who can work remotely versus those who cannot, has come up frequently during the Covid-19 crisis. The virus disproportionately affects those who are in vulnerable groups, such as those over age 60 and those with preexisting medical conditions like diabetes.
Vermont raised the pay of some state workers in April.
Other employers, like First Light in Poultney, also gave the people on the manufacturing floor a raise. An added incentive for doing so is that for several weeks, workers who stayed home for a variety of reasons – such as to care for a relative – could make more, in many cases, on unemployment through the federal emergency CARES Act. The wage increases provided some balance to that.
Pay inequity is hardly new; the Legislature has been consumed with conversations about raising the minimum wage for the last few years. Economists say the average CEO makes 271 times as much as the average yearly pay of a typical American worker, around $58,000.
But the Covid crisis, which struck with unprecedented speed, has broadened the inequity in many ways, said Stephanie Yu, deputy director of the Montpelier think tank Public Assets Institute.
A large pay gap isn’t just bad for the people who are earning on the lower end, said Yu. It’s bad for society and the economy at large.
“There is a good body of academic research on the next-level effect of income inequality,” said Yu. “It slows down economic growth; it’s a drag on the economy in general; it also causes significant health problems.”
“Those problems affect everybody,” she said. “It has a real impact on our health care system, in terms of capacity and cost. And it reduces social mobility in terms of the likelihood of kids moving out of the economic strata into which they are born.”
A new way forward
Some of the people who have been working on solutions to income inequality see the disruption created by the Covid emergency as an opportunity to reset patterns of compensation.
In a state that has found a way to do a lot of things well, the pay divide has so far been intractable, said Thrailkill. It wasn’t difficult to give his manufacturing workers a raise, he said, because his company received a federal Paycheck Protection Plan loan.
“It’s not like it was hugely heroic on my part or anything,” he said. “We were lucky to be in a position where business had not fallen off a cliff. The funding was there.”
Thrailkill hopes that the disruption caused by the pandemic will have at least one positive effect.
“This is a real opportunity to dig into these things – the whole fairness issue, the wage breach,” he said. “There are a lot of people in Vermont who are very comfortable and a lot of people who struggle. That’s one of the biggest divides.”
When it sent manufacturing employees home, Danforth Pewter made loans to a couple of employees who were waiting for unemployment insurance checks.
Bram Kleppner, the Danforth CEO, said home life is another area of inequity that has suddenly become more noticeable. He had a few employees quietly approach him to ask if they could come into work for just a few days a week, because they didn’t want to be at home full time.
“Getting laid off is super stressful,” he said. “Combine the financial worry about yourself, worry about your health and getting infected, and you add to that being cooped up in a small space and I think people fall apart. It was clear it would be bad for their mental health if they didn’t have a place to go out and be with different people.”
As far as Yu is concerned, policymakers clearly know that wages need to rise if people are to meet their basic needs. That’s why Congress in late March passed a bill that added $600 per week to state unemployment benefits.
“That $600 in additional unemployment is a big acknowledgement that a lot of what we were paying people before this wasn’t sufficient,” she said.
Digital editor Mike Dougherty contributed to this story.