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Will Biden’s Stimulus Package Help Reverse the ‘Shecession’?


— C. Nicole Mason, president and chief executive of the Institute for Women’s Policy Research

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President-elect Joseph R. Biden Jr. on Thursday unveiled an economic stimulus package that has been praised — even by conservative-leaning businesses, lobbying groups and analysts — for its size and scope, matching the current economic crisis with a historically unique response.

“Not since the New Deal during the Great Depression have we seen such an ambitious economic stimulus plan,” said C. Nicole Mason, president and chief executive of the Institute for Women’s Policy Research. “What that signals to me is that the new administration understands the magnitude of the problem.”

From the get go, this economic crisis has been markedly different from previous ones: It wasn’t caused by geopolitical or financial forces, and it disproportionately affected women.

A bulk of the jobs that vanished at the start of the coronavirus pandemic were held by women — particularly women of color — who worked in service industries like hospitality, travel, retail and entertainment.

The downward trend held through the year, with more than 800,000 women dropping out of the work force completely in September (no longer looking for work), and at the end of 2020, when there was a resurgence of the virus, 156,000 jobs were lost in December by women, predominantly women of color. According to the National Women’s Law Center, “there were nearly 2.1 million fewer women in the labor force in December than there were in February, before the pandemic started.”

So the question — for many — is, would Mr. Biden’s $1.9 trillion American Rescue Plan, as it is known, help women get back to work, in addition to containing the spread of the virus?

The answer, according to several economists, advocates and experts, is overwhelmingly, yes. The plan goes big on elements that have not traditionally been large parts of stimulus plans: public health, with funding to ramp up Covid-19 vaccine distribution and testing, and child care, without which experts say it would be difficult to reverse the so-called shecession.

“For six to nine months, progressive academics have been lighting their hair on fire, saying, ‘You have to do this and this and this,’” said Michael Madowitz, an economist at the left-leaning Center for American Progress, who has been studying the effects of the pandemic on parents. “It seems like a vast majority of those ideas are actually in this package in some form.”

“It’s a refreshing departure because economists often feel like they’re casting policy ideas into the void,” he added.

Though, of course, the proposal is a starting point that will most likely be watered down as it works its way through Congress.

The recovery package contains several proposals which may help families that are barely scraping by: expanding the unemployment insurance programs, extending paid leave and continuing a moratorium on evictions, all of which would provide an extra cushion in case people continued having trouble getting back into the work force.

One of the biggest reasons so many women are out of work during the pandemic is that the burden of child care at home, caused by the closure of day cares and schools, often fell on the shoulders of mothers. Core tenants of Mr. Biden’s plan are specifically designed to tackle that reality.

The plan would work to reopen kindergarten-to-eighth-grade schools within the first 100 days of the new administration, with $130 billion earmarked for resources to make it happen — from new ventilation systems to additional teaching programs that can help “make up lost learning time this year,” underscoring the fact that remote learning may have set back many children from lower-income families.

The plan also dedicates about $40 billion to child care, a significant increase in funding from the $10 billion that was included in the last stimulus package that Congress passed in December. In Mr. Biden’s plan, more than half of the funding for child care — $25 billion — would help bail out providers, which were barely profitable before the pandemic and have been hanging on by a thread ever since. In a recent survey by the National Association for the Education of Young Children of more than 5,000 child care providers across the country, about 40 percent stated they might have to close permanently if government help wasn’t available.

An additional $15 billion would go to helping low-income families afford child care. The plan would also expand tax credits to help parents cover the cost of care for children under the age of 13, though it’s still unclear whether that means that parents can leverage that benefit only next year.

Mr. Madowitz, of the Center for American Progress, said that “letting child care centers just die over the next nine months would have had a huge cost in terms of how fast we could recover.” Instead, this short-term investment will pay off for years, he added, allowing women to re-enter the work force sooner and contribute to economic growth, and potentially shift culture in a country that has never before subsidized child care in this way.

All together, the proposal is “about children and parents but it’s also about the teachers and the caregivers and making sure that they have safe workplaces,” Heather Boushey, one of the top economic advisers to the incoming Biden administration, said in a call with journalists on Friday. “The package looks at both sides of that equation.”

The plan also proposes raising the minimum wage to $15 an hour from $7.25 and ending tipped minimum wage, which would have a direct effect on women, particularly Black and Hispanic women.

In 2019, 68 percent of minimum wage workers and 66 percent of workers earning below minimum wage were women, according to the Bureau of Labor Statistics. In the long run, the increased hourly rate might also help close the gender pay gap, particularly in the lowest paying jobs, Mr. Madowitz said.

But studies on this have been mixed; some, like this 2018 study by the Economic and Social Research Institute in Ireland, found that an increase in the minimum wage did indeed close the pay gap for the lowest earners while others have found no change.

Regardless, this proposal will probably face more resistance by moderates and conservatives in Congress.

Also, raising the minimum wage doesn’t necessarily address the issue of job security, noted Ms. Mason, of the Institute for Women’s Policy Research. Many of the first jobs to be cut during the pandemic were minimum wage jobs. Research in 2019 from the nonpartisan Congressional Budget Office also suggests that if the minimum wage were to rise to $15 an hour, 1.3 million workers who would otherwise be employed would be jobless as businesses adjust payroll.

“We still have some work to do on making sure that these jobs are quality jobs,” Ms. Mason added.

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