In the 1930s, with the Great Depression blanketing the country, countless families faced the heartbreaking uncertainties of how to pay the bills, what to eat for each meal and even where to sleep the next night.
With staggering unemployment, Americans were displaced at record numbers, shocked, dejected and hopeless. Then, perhaps not so different from today, was the underlying question: when will this end?
At the time, one ray of hope was the 1935 Social Security Act. This landmark legislation paved the way for many of the worker protections that we are familiar with today. Among those provisions was unemployment insurance (UI), an employer-paid program operated by the state to pay partial income replacement to workers who had lost their jobs due to the sort of massive layoffs and downsizing we are seeing right now. Usually, an eligible worker will get a check up to 50% of what they were earning. It’s time-limited, too, and a person needs to actively be searching for work to continue to qualify.
Since it’s essentially a jobless benefit, there has always been some debate over the value of UI in the political arena, but for the most part over the years the data has proven time and time again that the positives far outweigh the shortcomings. Supporting this truth, the recent CARES Act stimulus funding included almost unanimous support for a $600-a-week boost for those enrolled in the program.
Countless studies have shown that if you get money into the hands of people hit the hardest as quickly as possible in their time of distress, it helps them stay stable and safe.
Right here at home, there have been significant efforts to provide more of this type of support. Business leaders, elected officials, philanthropic institutions and generous individuals contributed more than $25 million to a local initiative that’s been pushing to get as much direct financial assistance to people as possible. But it’s going to be one-time support and, sadly, it just won’t be enough.
In the best of times, there are more than 65,000 extremely low-income households in Santa Clara County. Most are paying more than 50% of their incomes toward rent. With so many out of work now and a recovery that’s likely to result in far fewer service sector jobs, the new normal looks like a bleak future for the same people we have so heavily relied on over the years.
By the way, if you think these folks should just leave for greener pastures, I can tell you it’s not going to happen. Unlike other more localized catastrophic events of the past, these impacts are happening in every community across our nation. And given the nature of COVID-19, the idea of any dust bowl ballads or mass migrations seems far-fetched this time around.
The bottom line is that these are our neighbors and isolating in our own bubbles makes us complicit in their suffering.
That’s why taking a deeper look at UI and advancing it even a step further makes so much sense right now. For the foreseeable future, many people are going to need some kind of subsidy to survive. As recently as a few months ago, former presidential candidate Andrew Yang was arguing for this inevitability, though even he probably didn’t think it would come so fast.
Yang has been the promoter-in-chief for the past few years of a rapidly growing initiative known as “Universal Basic Income” (UBI). Though it has taken a variety of forms, UBI is a guarantee from the government that residents receive a minimum income to cover the basic costs of living and provide some financial security. Many countries, states and local governments – including the county of Santa Clara – are currently experimenting with UBI pilots.
More than enough ink has been spilled on the pros and cons of UBI, but I have to wonder at this point what other option is there? The U.S. unemployment rate just exploded to 14.7%, with many experts saying this is a gross underestimate because of stay-at-home orders preventing people from filing. And while some are going back to work soon, many other Americans won’t have that option. People can’t self-isolate forever and when the rents eventually come due, we’re going to need to have an answer.
Part of what helped us escape the Great Depression was a deep reinvestment in our most vulnerable people. It seems like now is the time to go back to what worked before.
San José Spotlight columnist Ray Bramson is the Chief Impact Officer at Destination: Home, a nonprofit that works to end homelessness in Silicon Valley. His columns appear every second Monday of the month. Contact Ray at [email protected] or follow @rbramson on Twitter.