10 March 2020 — FAIR
Janine Jackson interviewed EPI’s Josh Bivens about coronavirus and the economy for the March 6, 2020, episode of CounterSpin. This is a lightly edited transcript.
Janine Jackson: After some breathless and some racist coverage on coronavirus and the respiratory illness COVID-19, US media did get around to acknowledging that, for example, many people can’t follow the critical recommendation to stay home from work if they’re ill. As many as a quarter of US workers don’t have any paid sick days.
Consideration of the various factors affecting the potential spread of coronavirus and our societal response is not “politicizing” the issue; public health is inherently political, it’s just a matter of how thoughtful and transparent we are.
Here to help us look at some things to consider is Josh Bivens. He’s research director at the Economic Policy Institute, and author of Failure by Design: The Story Behind America’s Broken Economy and Everybody Wins Except for Most of Us: What Economics Really Teaches About Globalization. He joins us by phone from Washington, DC. Welcome to CounterSpin, Josh Bivens.
Josh Bivens: Thanks for having me.
JJ: A virus that looks set to affect a great number of people, though not necessarily, thankfully, to kill a great many, and the uncertainty and even panic that surround that, how do you even start to think about the economic impacts of that? I mean, people not going to work, OK, I can see that. But what do you even look at, if you’re trying to think about how something like this affects the economic life of a country?
JB: Yeah, it’s a really good question, because I would say, there’s been a lot of talk over the past year about, “What are we going to do in the next recession comes?” And that’s a pretty straightforward thing: Recessions tend to happen because something makes people stop spending money, either households, businesses, or governments. And so they pull back their spending, the economy starts to slow down, and you basically can just have the government either give them money to spend more or spend it directly. It’s all very straightforward.
Recession potentially caused by an epidemic is a little different, because we can give people more money, but a lot of the spending cutbacks that you might see as a result of the epidemic aren’t going to happen because people don’t have income; it’s because they don’t want to be around other people. They don’t want to go to a restaurant, not because they don’t have the income to go to the restaurant, but because they don’t want to be around other people. Same thing for malls, for grocery stores. And so I think it’s going to be a little bit harder to fill in the hole caused by the cutback in spending that could happen if this really becomes widespread.
I think you still do some of the traditional things you do to fight recessions: just transfer lots of resources to low- and moderate-income people, try to erect a firewall around the sectors that will be hit directly, the social consumption as people pull back.
But then I think you have to start thinking about things that combine economic and public health measures. And so we could have the example of mandating temporary paid sick leave to every worker in the United States for the next six months; that hits the economic effect, but also will reinforce the public health advice. And so you look for things that combine the two like that.
JJ: That makes a lot of sense. I was going to say, in your recent article, you lay out some considerations for policymakers for both the short term and then some longer-term things that maybe could improve our response to epidemics. Now, you talked about that sick leave right now. That seems like an immediate, impactful thing that could be done. Are there other things that could be done in the short term to address some of the impacts?
JB: I think one thing that could happen is you could imagine just a blanket statement by the government that all coronavirus-related testing and treatment will be picked up by the government. It strikes me that in an epidemic like this, the absolute worst thing is people who don’t get tested, or don’t get treated, because they’re worried about cost. But that’s a reality of life in America; lots of people forgo healthcare because they think it’s going to be too expensive. And the government actually has the ability, in the very short run, to say, anything that is coronavirus, test or treatment, will be picked up by the Medicare program. I think that’s doable. I think it would reinforce the public health aspect, and it would also keep money in people’s pockets, because they wouldn’t have to shell out the copays and things like that for having the illness treated.
JJ: And as you say, they’d be more willing or able to do it, which, of course, is critical.
I wonder, do you have any thoughts on the other piece of that, because what you’re saying sort of doesn’t sound like the American way, in some ways. We think the first past the post with a vaccine or a drug ought to get a monopoly and make a lot of money. Do you have any thoughts on that patent ball of wax, as it relates here?
JB: Yes, I would say in the long run, generally, I think our system, where we just reward pharmaceutical companies with incredibly profitable patents for incredibly long periods of time, is just a disaster, not just for the pocketbooks of people who have to pay for drugs, but it’s not even a very good innovation system. And so the most direct way to deal with that, in some sense, is just having more and more people under public health insurance programs in the US, both Medicaid and Medicare, and expand those, and then have the government really use its bargaining leverage against pharmaceutical companies to keep price-gouging from happening. I feel like people understand that in the short run, in the sense of the coronavirus vaccine, it would be unfair to allow drug companies to really gouge on this. And then, hopefully, that realization is: But why should they ever be allowed to? So I think this would be a good gateway to getting people used to the idea that we have a really flawed drug production and distribution system, and probably we should change it.
JJ: A teachable moment, if you will. Well, we talked about paid sick leave, about government covering medications and responses related to coronavirus. Clearly workplace protections, labor standards, are key. When you look at the longer term, in terms of building resiliency or responsiveness to epidemics, what are some of the longer-term, bigger-picture things you think about?
IFL Science (3/2/20)
JB: One of them is absolutely making mandated paid sick leave a permanent feature of the US economy. It has long been said that it’s not just good for individual workers, it actually is good for public health. There’s actually been a recent study that showed that states that have mandated paid sick leave saw a 40% drop in flu transmission cases. And so I think the public health benefits are really large.
Some states have moved ahead. If you look at the share of workers covered by paid sick leave in the United States, there is a huge difference between, say, the Pacific Coast region of the US versus the South, it’s basically 90% versus 60% who have some access, and so we should get that all the way across the finish line and mandate for everybody.
After paid sick leave, I think the big thing is we need to stop just gutting the nondefense discretionary part of the federal budget. That is the part of the budget that funds things like NIH and CDC, as well as lots of other incredibly valuable public investments. It has shrunk to an almost historically low share, it’s set to shrink even more. It’s just penny wise, pound foolish budget cutting, and we really need to beef up our public institutions that provide public health, wealth, education and other things, but the public health is the most salient right now.
JJ: Finally, in covering all of the various aspects of this unfolding situation, we hope that media will balance urgency and education; that they’ll be scrupulous in sourcing, and not spread unfounded rumors. Do you have any thoughts of what might be useful for journalists to be looking at or thinking about, or, on the other hand, what kinds of stories you’d like not to see going forward?
JB: On the public health side, I am probably not the expert there; I’m more consumer. And so, yeah, I just want good information in any way. On the economic side, I would really like good reporting on what sounds like it’s actually specific and responsive to the crisis in front of us, versus what is just packaging long-held ideological preferences and trying to exploit the current moment.
And so the classic example will be, there will be Republican claims that they have a response to the coronavirus economic fallout by cutting income taxes. Income taxes are generally just not a very big burden at all for low- and moderate-income people. So if you’re actually trying to help them, and keep the economy afloat during any epidemic-induced shock, that’s a terrible way to go. It’s not a serious response. It’s just something that Republicans in Congress always want to do.
So I think that reporting that really queries—“Is this a real response to the current condition, or is this just smuggling in long-held ideological preferences?”— that’s what I’d like to see.
JJ: We’ve been speaking with Josh Bivens. He’s research director at the Economic Policy Institute. You can find their work online at EPI.org. Josh Bivens, thank you so much for joining us this week on CounterSpin.
JB: Thanks for having me.