Socialist Alternative

Worse Off Than Before

Published on

Over three long years ago, COVID-19 began its brutal rampage through human society. In that time, it killed 7 million people worldwide and hospitalized far more. People lost jobs and sorely needed incomes, falling further behind on rent and struggling with other basic expenses. Others were kept working in hazardous conditions with inadequate protection, while students stayed home and effectively lost months of education. It didn’t take long for the pandemic to trigger a global recession, and the ensuing economic whiplash has been a hostile environment for working people to find their feet.

To address this crisis, the US government rolled out a piecemeal social safety net, something most Americans have never experienced before; unemployment insurance and SNAP benefits were boosted, direct cash payments were distributed, Medicaid was expanded, evictions were paused, and more. None of this was done out of the goodness of any politician’s heart though: without taking some of these unprecedented stabilizing measures, capitalism was at risk of complete collapse. But despite the motivations of these politicians, for a short period of time, many of us had money in our pockets and got a glimmer into the type of basic social welfare enjoyed by most Europeans. Then, as quickly as it came, it was gone.

Closing The Book

Three long years later, Biden and the Democrats are closing the book on COVID for good. On April 10, Biden terminated the “national emergency,” which had been in effect since March 2020. And on May 11, Biden will allow the “public health emergency” declaration, which has until now been renewed every 90 days since January 2020, to expire.

What does any of this mean in practice, for millions of working class people in the US? The “COVID social safety net” has already been disintegrating, piece by piece, over the last several years. The eviction moratorium expired in July 2021. The expansion of unemployment insurance ended two months later. The child tax credit expired in December 2021. Now, with prices skyrocketing, working people struggling to make rent can be evicted with ease, parents buckling under the enormous costs of childcare have long ago lost their state support, and young people are now on the hook again for astronomical student debt payments.

We’re now entering the final stage in the erosion of the COVID social safety net with the end of the federal emergency declarations. This means that the exceptional conditions that prompted the construction of the safety net will no longer be recognized to exist. The biggest impact will be in healthcare: Medicare and private insurance will no longer be required to cover at-home COVID-19 tests, and without the federal government purchasing test kits in bulk, prices are sure to rise. Private insurance won’t need to cover PCR tests either, and antiviral treatments like Paxlovid would likely be subject to cost sharing when the government runs out of supply.

To date, the government has purchased over 1.2 billion doses of Pfizer and Moderna vaccines, but will soon stop purchasing completely and start transitioning COVID-19 vaccines to the commercial market. When the vaccine companies were negotiating price with the federal government as the single biggest buyer, the US was able to secure an average price of $20.69 per dose. In the market, now negotiating instead with purchasers and insurance companies, Pfizer and Moderna expect they will quintuple the price to $110-$130 per dose. This is the moment they’ve been waiting for. While vaccines will continue to be free for the insured, we can expect insurance companies to pass the cost on by raising premiums. The uninsured and underinsured might not be so lucky, although both Moderna and Pfizer say they plan “patient assistance programs” to keep the vaccine free for the uninsured. This is, of course, a PR move they’ll hope to offset through their massive price hike, but there’s also no guarantee it will last. Meanwhile the Biden administration is planning a billion-dollar public-private partnership with pharmacies which they hope will facilitate the distribution of those vaccines. On top of all this, market anarchy means that supply may not match demand, and we could find ourselves in a new wave of the pandemic with vaccines in short supply and prices jacked up through the roof.

The Biden administration is closing the book not because the pandemic is in any way over, but because they’ve decided that enough time has passed that the doors can be opened all the way for big business to swoop in and resume their game of maximizing profit, with the limited rules they’re used to. With our seatbelts now fully unbuckled, hurtling through a world still stricken by an ever-mutating pandemic and a few new layers of economic and political instability — on balance, we really are worse off than before.

What Was The Capitalist Class Forced To Give?

The coronavirus pandemic has been an absolute disaster for the world. But the measures taken by the US government, and many other governments around the world, gave us a glimpse of what a genuine social safety net could look like.

Stimulus checks: Between March 2020 and March 2021, three rounds of direct “economic impact payments” were made to a majority of adults in the US — over 160 million taxpayers who earned under a threshold amount of money. If eligible for all 3 payments, a person would have received a total of $3,200 deposited into their bank account and $2,500 per child.

Child tax credit: The expanded child tax credit bumped up the amount families would receive from $2,000 to $3,000 per child aged 6-16, and to $3,600 per child under 6. Instead of having to wait for their tax returns, families were sent payments in monthly disbursements, helping them pay for necessary expenses with quicker cash on hand. This expansion only lasted from July 2021 to December 2021, but combined with other pieces of the safety net, 2.9 million kids were lifted out of poverty in 2021, and the child poverty rate dropped roughly in half. By January 2022, just a month later, the child poverty rate rose from 12.1% to 17%.

Expanded unemployment benefits: In the first several months of the pandemic, tens of millions of workers in the US lost hours, and nearly 10 million became unemployed because their employer closed or lost business. Unemployment benefits were expanded to include an extra $600 “top-up” per week. This benefit disappeared mid-year and returned temporarily in 2021 at a reduced $300 top-up. Unemployment benefits were extended to gig workers, freelancers, and other independent contractors not typically eligible. At its height, unemployed workers could extend their benefits for 53 additional weeks. All of this was an enormous financial lifeline for workers, but it also had an impact on consciousness. With the $300 top-up, a quarter of recipients actually earned more on unemployment than they did working, a damning demonstration of how intolerable it is to be a wage worker in the US. The pandemic provoked many working class people to reconsider work, to evaluate what they wanted to do, and to feel the freedom, if for a limited time, to just say no to all the crappy jobs they might ordinarily need to take. A similar disgust and rejection of work has been behind the “Great Resignation”. Quitting is not a long-term solution, but the yearning for something better can lead many workers to the conclusion that we need to fight together for it.

Eviction moratorium: Housing is easily the largest expense for most people, and renters, often people who don’t make enough to purchase a home, comprise 36% households in the US. Over 6.5 million families were behind on rent payments during the pandemic, and to hold off the destabilizing risk of mass evictions, renter protections were rolled out in patchwork fashion.

The first federal eviction moratorium took effect from March 2020-July 2020, barring landlords from initiating evictions against tenants for nonpayment of rent. But this only covered rental properties with federally backed mortgages — about a quarter of all rental housing in the US. 43 states declared state-level moratoriums as well, but most had expired by the spring and summer months.

The CDC then ordered a moratorium in September 2020, which was extended through July 2021. This moratorium covered more properties, but still required renters to jump through hoops: to first try to obtain other government rental assistance, to make whatever partial payments they can afford, and to be at risk of homelessness or overcrowded housing upon eviction. It also did not bar landlords from charging late fees. Despite their limitations, the eviction moratoriums caused a sharp drop in evictions, and helped keep people housed.

Moratorium on debt collection: Nearly 1 in 5 adults in the US have student loan debt, making monthly payments of about $400 on average. In March 2020, the CARES Act instituted some basic student loan relief measures: suspending payments on federal student loans, dropping interest rates to 0%, and stopping collection on defaulted loans. This has actually been extended until Biden’s debt relief program is resolved in court, or late August, whichever comes first. By the end of 2021, 30 million borrowers saw increases to their credit scores.

Lifelines On Slow Drip — Or Sometimes Simply Squandered

The amount of federal money set aside for working people was far less than what was needed and what was possible, but it was nonetheless unprecedented. Still, state and local administrations have done a criminally bad job at getting those funds to the people who need them the most.

Of $190 billion in federal relief for elementary and secondary schools, across the country $130 billion was still unspent by late 2022. As of this month, New Jersey has only spent $1.1 billion of the $6.24 billion they received. They’ve actually allocated hundreds of millions of it for some extremely useful projects — water infrastructure, Robert Wood Johnson University Hospital, and a universal preschool facilities fund — but none have yet used any of the funding. Meanwhile, the state spent over half a million on SUVs for state officials. New Orleans is flush with cash, but the city has major staffing shortages because it refuses to pay its workers a living wage.

The media is quick to blame “bureaucracy,” which isn’t entirely wrong, but there’s a political explanation for this logjam. Even when this money is made available and is sorely needed, politicians in charge guard it like misers, dazed by the neoliberal hangover. They’re so accustomed to budget shortfalls and austerity that they want to stretch these relief dollars as long as they can. To be sure, the firehose of cash has long since been tightened shut and won’t be readily turned on again, but the political establishment certainly isn’t making serious plans to tax the rich and extend these lifelines long-term at a local level.

With the end of the emergency declarations, House Republicans are even raising a clawback of up to $70 billion in unspent pandemic money, with Kevin McCarthy asserting “If the money was authorized to fight the pandemic, what was not spent during the pandemic should not be spent after the pandemic is over.” A more creative and frivolous approach was taken by the West Virginia Governor’s Office, whose “Gifts, Grants and Donations Fund”’ siphoned up $28 million in unused relief funds and promptly spent $10 million on a baseball stadium five days later. California will actually burn through all its rental assistance money, but farcically claims that the last $177 million are needed to pay a private contractor to issue denial notices to 140,000 households on the waitlist.

Winning A Genuine Social Safety Net

Regardless of its shortcomings, for millions of working people, the COVID social safety net had a real impact in blunting the severity of the crisis. But perpetual crisis was already the status quo for many, even before the pandemic hit. If we’d had a genuine social safety net all along, imagine how many kids could grow up free from poverty, how many people wouldn’t have to decide between food and rent, or just purely how many lives could be saved?

These concessions were significant, but we need to win them on a generalized basis: They must be permanent, not temporary. They must be a comprehensive and unified system, not a jumble of uncoordinated policies. But we’ll also need to go farther and take on the business interests that stand in our way. Big corporate landlords won’t stand for an indefinite eviction moratorium or a cancellation of back rent — we need to take millions of rental units out of their profit-driven hands and put them into public ownership. Lending companies like Sallie Mae effortlessly pushed Biden back from canceling the already inadequate $10,000 of student debt per borrower — these companies serve no useful function in a society that can afford free public college. The assortment of measures taken to safeguard our health, like expansion of Medicaid, free testing, vaccines, and antivirals, all need to be linked up and expanded as part of a single Medicare for All system that derives no profit from keeping us alive.

We’ll need a mass working class movement to win any one of these changes, and the path to victory will set us on an unavoidable head-on collision with the interests of the billionaire class. The experience of the last several years has demonstrated that the money is all there to provide better living conditions for working people, but big business and their servants in office will only make it available when crisis is brought to their doorstep and they see the collapse of their system as a real possibility.

That’s exactly the threat our movement needs to pose. We need the full weight of organized labor thrown behind these demands, because the power of the working class to withhold our labor and stop business as usual can create a more significant crisis for the ruling class than even the pandemic did — that is, if we’re sufficiently organized and uncompromising in our struggle. The role of the Democrats has always been to disorganize working class movements and compromise at every turn to limit our victories. We’ll need to cut ties with the Democrats and build our own party for working class people through which militant class struggle can be organized and channeled.

But regardless of the strength of the movement we build, at the end of the day, capitalism is a system where the rich hold the reins of power. Under capitalism, any gain for working class people can be taken away, just like the COVID social safety net, and the best we can hope for is an endless tug of war where the billionaire class has the upper hand. Only by bringing an end, not just to for-profit industries but to this entire for-profit social system, can we escape this perpetual struggle to get what we need to stay alive: we need to build a socialist world.

Latest articles


Will Voting For The “Lesser Evil” Stop Trump?

It’s hard to believe that it’s almost been four years since the 2020 election – but it’s even harder to believe how little has...

Baltimore Bridge Collapse Kills 6, Shipping Industry to Blame

On March 26, the Dali, a container ship leased by shipping giant Maersk headed for Sri Lanka, lost all power while still in the...

Border Deal Shows The Crisis Facing Both Democrats & Republicans

Congress has been in a gridlock for most of February over the border deal that almost was, highlighting just how incapable the bosses’ two...

The Two-Party System Is Killing Us – Can We Build An Alternative?

Statistically speaking, you’re not excited about the 2024 Presidential election. According to a new poll, 59% of registered voters have little or no enthusiasm about...