Home News Could Biden's new stimulus plan ease the "She-Cession"?

Could Biden’s new stimulus plan ease the “She-Cession”?

Incoming President Joseph Biden announced a $1.9 trillion stimulus plan on Thursday to cushion the fiscal whiplash of COVID-19.

The “American Rescue Plan” detailed economic assistance to state and local bodies, individuals facing unemployment, and even some relief to the nationwide vaccination campaign. A prominent feature on Biden’s wishlist is the minimum wage hike. The current federal minimum wage rests at $7.25 per hour, and it has remained so since 2009. Biden aims to push it to $15. That’s an astronomical increase of almost 107%.

According to the Congressional Budget Office (CBO), increasing it [minimum wages] would raise the earnings and family income of most low-wage workers, lifting some families out of poverty—but it would cause other low-wage workers to become jobless, and their family income would fall.”

 Caught in the crossfire

The onslaught of the pandemic disproportionately affected marginalized groups, especially women of color. Unemployment in the United States skyrocketed to unprecedented levels, and women carried the brunt of it. Unlike the recession of 2008, a public health crisis triggered the developing recession. Women significantly represented menial labor industries like sanitation and care-giving. 

Of the 20 million jobs lost across the country, 55% of them belonged to women, reported the Institute for Women’s Policy Research (IWPR). Women’s unemployment rate stood 2% higher than men’s. It spurred a phenomenon called the “She-cession”. Latina workers, in particular, made up 20% of women who lost their jobs.

An optimistic case

But not everyone leans towards CBO’s analysis. Ariane Hegewisch, a senior researcher at IWPR, believed that Biden’s stimulus plan will benefit families and women. She informed Culturas that numerous other studies with more extensive methodologies (like David Card and Alan Krueger’s analysis) proved minimal damage to employment rates even after an increase in the minimum wage. “There were also a lot of discussions on CBO’s study saying it may be leaning too much on the cautious or destructive side,” she said.

CBO notably mentioned that they did not estimate how an increased minimum wage affected the federal budget. Hegewisch pointed out that the dissenting studies took a wide range of variables into consideration, unlike CBO’s study. She also raised another pertinent point.

“None of these studies [including CBO’s] have happened within the COVID context,” she said.

‘The impact of COVID-19 on gender equality’ pointed out that relatively more men work in cyclical industries like manufacturing and construction. These sectors withstand the pressures of ‘regular’ recessions. But vital fields like hospitality, caregiving, education, and retail employ more women. The pandemic hit these sectors hardest. Hegewisch added: “These essential jobs are often linked to the public budget. For example, how much Medicare assistance do they get? How much support do they get from the state?”

Women tread a tough line between childcare and jobs. The workload doubled at home once schools and daycare centers shuttered for in-person sessions. Their closing played a major role in women being out of work. 

A new hope

The escalation to $15 sends a loud message. Hegewisch believed that Biden is aware of the need to support employers, but not by relying on low wages. “Sometimes, the wages are so low that people subsidize jobs,” she informed. 

Biden’s blueprint for economic revival includes other measures that affect working women. His administration wants to inject $170 billion into the reopening of educational institutions. Schools would receive $130 billion of this amount, and the remainder would go to colleges. They also plan to extend paid sick, family, and medical leaves to 14 weeks. Eligible workers would also receive a $1400 leave benefit. Ideally, this would help caregivers while schools and daycare centers are closed. 

Moreover, the stimulus strategy accounted for increased tax credits to help out parents. This is a “refundable” tax meaning families could still get cash even if they do not earn enough to owe income taxes. According to the plan, families with one child under the age of 13 could get $4000. Families with two or more children under 13 qualify for $8000.

Such measures in tandem with wage escalation can result in more jobs, especially for women who work in schools and colleges. Less than a day after unveiling his relief plan, Biden ambitiously announced that 100 million shots would be administered in his first 100 days in power. This means that one million doses have to be injected every day. It is a mammoth task that inevitably requires more manpower, or according to Hegewisch, more womanpower. She said: “These jobs often go to women more than men. So, the stimulus plan includes direct job creation that benefits women.”

Bulbul Rajagopal
Bulbul Rajagopalhttps://bulbulrajagopal.contently.com/
Bulbul Rajagopal is a data and investigative reporter with a special interest in minority issues, soccer, and politics. Her extensive coverage in India and Los Angeles rewarded her with an affinity for crime reporting. During her downtime, Bulbul enjoys exploring her passion for food and its cultural impact amongst other things.
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