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Policy Points from Iowa Fiscal Partners

Posts tagged coronavirus response

Worker safety: Who gets protected?

Posted June 17th, 2020 to Blog

The COVID-19 crisis poses a dizzying combination of health and economic risks, and it has forced us to rethink the ways in which our public policies protect us against those risks. The underlying logic of the CARES Act, for example, was based on the assumption that sharing public spaces — especially workplaces — posed a grave threat to the public health. Its benefits — including a limited program of paid leave and a relatively generous expansion of unemployment insurance — were designed to make not working and sheltering in place possible.

That instinct was right but its execution was dismally flawed. State unemployment systems could not begin to manage the avalanche of claims. The virus flourished in settings — most starkly meatpacking plants — that ploughed ahead as “essential” businesses. And states impatient to open up again did everything they could to discourage workers from accessing the new federal benefits — a point Iowa Workforce Development Director Beth Townsend all but conceded in testimony before Congress last week.

From the first hint of the virus to the rush to reopen, Iowa has done perilously little to protect its workers, their families, and their communities. Safe workplaces are pretty clearly defined in the guidelines developed by both the CDC and the Occupational Health and Safety Administration (OSHA). But there is nothing in state or federal law that compels employers to follow them, and ample evidence that many are not. Even in the midst of local outbreaks, county health directors lacked the authority to shut down production. “They just don’t get it,” as the Tama County emergency management coordinator, complained in the midst of an outbreak at the National Beef plant there, “They will keep going until all of their employees have this virus. They would rather risk their employees’ health and keep their production going.” As Governor Reynolds coldly reminded us in late May: “Our recovery is contingent on our ability to protect both the lives and the livelihoods of Iowans. We can’t prioritize one over the other.”

Those priorities came into sharper focus this week. In a brief and largely aimless session, the Iowa Legislature offered scarcely a passing reference to the health and economic insecurity facing Iowa’s working families. They did, however, jump to address the insecurity of Iowa employers — offering up blanket immunity from COVID related claims coming from workers or consumers.

The “COVID-19 Response and Back to Business Limited Liability Act” (Senate File 2338) requires that any claims of exposure to the virus meet a standard of “reckless disregard” or “actual malice.” Employers “shall not be held liable for civil damages for any injuries sustained from exposure or potential exposure to COVID-19 if the act or omission alleged to violate a duty of care was in substantial compliance or was consistent with any federal or state statute, regulation, order, or public health guidance related to COVID-19 that was applicable to the person or activity at issue at the time of the alleged exposure.” Since such regulations or guidelines are virtually non-existent, it is hard to imagine what such threshold might look like.

At a time of such peril and uncertainty, this is a remarkable and damning expression of our state’s priorities. It is a solution in search of a problem; there has been no stampede of frivolous damage claims — in Iowa or elsewhere. And it ignores the more obvious and equitable tack, which is to protect the workers in the first place, and allow them to refuse work (and draw unemployment benefits) if that protection is not sufficient. “Everybody wins when businesses follow clear, science-based guidelines to protect health and safety,” as The New York Times put it in a recent editorial. “Workers and customers are less likely to get exposed to the virus, and businesses are less likely to get exposed to litigation.”

Now, more than ever, our public policies should be assessed on whom they put at risk and whom they reward; on whom they protect, and whom they do not. The blanket immunity offered Iowa businesses by SF2338, alongside our abject and continuing failure to offer any meaningful protection for Iowa’s workers, fails that assessment on all counts.

Colin Gordon is senior research consultant for the Iowa Policy Project and a professor of history at the University of Iowa.

Back to business at Statehouse

Posted May 27th, 2020 to

Finding best uses of Iowa relief funds as legislators prepare to resume the 2020 session June 3

Over 18,000 Iowans have been sickened with the coronavirus. Over 313,000 Iowans — nearly 1 in 5 workers — have applied for unemployment since the middle of March. Many small businesses have closed or are operating at only limited capacity and suffering drastic losses.

While the misery is widespread, low-wage workers and persons of color have disproportionately felt the health and the economic consequences of the crisis. Both groups are more likely to be exposed to the virus — because they are more likely to be “essential workers” — and more likely to experience health and social disadvantages associated with poverty and racism that increase the odds of serious effects when exposed.[1]

Congress on March 27 passed the Coronavirus Aid, Relief and Economic Security Act, known as the CARES Act, which created the Coronavirus Relief Fund (CRF) to cover expenses of state and local governments related to the COVID-19 health and economic emergency. Of $139 billion for states, Iowa’s share is $1.25 billion. Because we have no cities with a population over 500,000, no funding went directly to local governments, but the state is free to allocate funds to localities.

Quick and effective use of these funds is important not just to help the thousands of Iowans suffering from the effects of this crisis, but also to boost the state economy. It has been shown that the most effective way of stimulating economic activity is to get more money in the hands of lower and middle income households, who can be counted on to spend in the local economy and support Iowa’s businesses. That in turn will boost state sales tax and income tax revenues, moderating the state’s fiscal problems.

How can the state use CRF funds, and what are the best uses?

CRF money must go for expenditures necessitated by the coronavirus emergency through December 30, 2020.[2] Congress made it explicit that these funds are for unforeseen and necessary additional expenditures, not to replace revenue lost because of the falloff in economic activity.[3] Still, the range of allowable uses is quite broad.[4] Eligible expenditures include not only direct expenses for public health needs but also expenses “incurred to respond to second order effects of the emergency, such as providing economic support to those suffering from employment or business interruptions due to COVID-19 related business closures.”[5]

As of this writing, Iowa plans to spend $100 million of the $1.25 billion, all to the Small Business Relief Program.[6] The Governor also will use $20 million to fund a new rental and mortgage assistance program. Lawmakers should use the remaining $1.13 billion to prioritize protecting state and local finances — key to long-term recovery — and meet the needs of low-wage workers and people of color who have borne the brunt of the virus.

Here are ways legislators should allocate CRF funds or adjust state priorities when they reconvene June 3:

  • Pay salaries and benefits of state government employees who have been diverted from their usual activities to respond to the current emergency. By using CRF for some state payroll costs, Iowa would face a smaller budget shortfall from the expected precipitous drop in state revenues.
  • Transfer funds to cities and counties to cover additional costs associated with the emergency, including payroll. Cities and counties face sizable costs for emergency management, purchase of personal protective equipment, sanitizing of facilities, technology needed for staff to work remotely, overtime for public safety workers, and elections costs with greater use of voting by mail.[7]
  • Transfer funds to school districts, which face added costs to divert education staff to online learning programs, facility cleaning, and ensuring that all students have access to educational programs while schools remain closed. Funds provided directly to schools by the CARES Act represent just 1 percent of school district budgets and are unlikely to cover all of these costs.
  • Bolster the federal Low-Income Home Energy Assistance Program (LIHEAP) with state funds and create a parallel program to prevent water shutoffs.
  • Strengthen the state’s Child Care Assistance program by increasing the maximum family income eligibility level and raising provider reimbursement rates. These boosts will support essential workers unable to afford the full cost of child care, help stabilize the child care industry by bringing new families into the system and improve its underlying financial structure.
  • Expand cash assistance under the Family Investment Program to help families meet basic needs and avert serious hardship.
  • Expand food assistance by increasing income eligibility for the Supplemental Nutrition Assistance Program (SNAP) to 200 percent of the federal poverty level, easing access with broad-based categorical eligibility and initiating a Disaster SNAP (D-SNAP) program to reach currently excluded Iowans. SNAP puts food on the table and is an important way to stimulate local economies.
  • Hire more staff at Iowa Workforce Development to facilitate applications for unemployment benefits, and create a network of navigators to help individuals apply for various forms of public assistance needed now by those affected by the crisis, particularly those with language barriers.
  • Provide additional funds to counties for general cash assistance to individuals in emergency situations and those left out of traditional assistance programs.
  • Expand internet access for remote work and education, access to TestIowa and online commerce.
  • Assess the need for financial support to hospitals beyond the $691 million in “provider relief funds” to Iowa health care providers already included in the CARES Act. Hospitals are seeing revenues drop as people avoid seeking care for fear of contracting the virus, a trend that could well continue even after hospitals reopen for elective procedures.

[1] Harvard Center on the Developing Child, “Thinking About Racial Disparities in COVID-19 Impacts Through a Science-Informed, Early Childhood Lens.” https://developingchild.harvard.edu/thinking-about-racial-disparities-in-covid-19-impacts-through-a-science-informed-early-childhood-lens/

[2] Legislative Services Agency, Fiscal Update, March 31, 2020. “H.R. 748 Coronavirus Aid, Relief, And Economic Security Act Appropriations.”

[3] The CARES Act states: “Coronavirus Relief Fund payments may not be used to directly account for revenue shortfalls related to the COVID-19 outbreak.”

[4] U.S. Department of the Treasury: “Coronavirus Relief Fund: Frequently Asked Questions,” updated as of May 4, 2020. A summary of allowable expenses described in this document can be found in the IFP report: “Iowa will need more fiscal relief than Congress has given.” https://bit.ly/2WKMp4o

[5] Legislative Services Agency, Fiscal Update, May 15, 2020, “COVID-19 – Iowa Coronavirus Relief Fund.”

[6] Legislative Services Agency, Fiscal Update, May 15, 2020, “COVID-19 – Iowa Coronavirus Relief Fund” and Legislative Services Agency, Fiscal Update, May 12, 2020, “COVID-19 — Iowa Small Business Relief Program Update.”

[7] An Iowa State Association of Counties found $5.8 million in additional spending required in 11 counties, the majority for emergency management, public safety, public health, courthouse expenses and IT. https://www.iowacounties.org/wp-content/uploads/2020/05/ISAC-COVID-Financial-Impacts-on-Iowa-Counties-Report.pdf The League of Cities is in the process of surveying members, https://bit.ly/2yvMQ9m.

Faster infection pace, fewer limits

Posted May 14th, 2020 to Blog

A number of Iowa counties are seeing a surge in coronavirus cases, even as the Governor continues to reopen the Iowa economy and further relax social distancing requirements.

In Wapello County, cases soared from 10 on April 28 to 306 two weeks later. Over that same time period, Crawford County saw an increase from 21 to 207, and Sioux County from 8 to 103. Yet instead of reinstituting social distancing in those hot spots, the Governor has expanded her relaxation of requirements on businesses from 77 counties to all counties statewide.

Given the problems and delays with testing, and the lack of widespread testing, it is difficult to know just how many Iowans are actually infected with the coronavirus, and whether there are other emerging hotspots that remain unidentified. But we do know where there have been major increases in identified cases. For the most recent two-week period, the table below shows the 16 counties with the highest number of new cases per 100,000 population over the past two weeks (through May 12).

When adjusted for population, we see that many rural counties are experiencing more rapid growth than urban centers, many of which (Linn, Johnson, Scott) did not even make this list. Half the counties on the list (indicated by shading) are among the 77 counties where restrictions were first relaxed on May 1.

Most of those eight counties we identified last week as likely hot spots based on the growth in cases up to that point. New additions to the list are Monroe and Osceola, where the total number of cases is not large, but where we may be seeing the beginning of a surge. Six of the eight shaded counties saw their case count more than double in the past week.

It is easiest to see which counties have grown the fastest if we compare the cases per 100,000 population and how this number changed since the county first hit 50 cases. The counties are compared on the basis of when the surge began in their county. Wapello and Crawford have been growing at much the same rate as Woodbury, notably one of the top counties in the entire country in terms of the size and rate of the coronavirus surge.

 

 

 

 

 

 

 

Peter Fisher is research director for the nonpartisan Iowa Policy Project in Iowa City.

Sheltering the data in place

Posted April 8th, 2020 to Blog

Governor Kim Reynolds over the past few weeks has moved incrementally to close more kinds of businesses, to the point where Iowa’s restrictions now resemble those of states that have a blanket statewide “shelter in place” order. Significant distinctions remain: a proper and comprehensive shelter in place order closes all businesses except those specified as essential, leaving no ambiguities and loopholes, and comes with clear and enforceable restrictions on travel and social activities.

The governor continues to assert that her recommendations are driven by the same four metrics that have guided her since the beginning and that only recently became partly public information due to efforts by the press. We provided a thorough analysis of that guidance several days ago. On Tuesday, we finally learned about one of those metrics: There are three long-term care facilities with a sufficient number of COVID-19 cases to be classified as a facility with an outbreak.

We now know enough to construct the point system in spite of stonewalling by the Governor’s Office.

The first of the four measures — percent of population age 65 or over — can be found from census data. The second — cases per 100,000 population — can be calculated because the number of cases has been released by IDPH by county. The third — outbreaks at care facilities — is now known, with locations, because of a question at a press conference.

That leaves the fourth — hospitalizations as a percent of cases — that is unknown by county or region because the governor still refuses to release the data. But we know the total score by region because it shows up on the maps that are intermittently released at press conferences (but remain unavailable on the IDPH website). Thus by subtraction we can determine that all four regions must be at the highest level, a 3, on the hospitalization rate score.

From here on out, the only thing that can change is the cases per 100,000 population and the number of care facility outbreaks. Region 5 is already at the maximum on the cases measure, and regions 1 and 6 will likely get there soon, leaving all three regions with a score of 9, 1 short of 10, the number that supposedly triggers shelter in place. So those regions, covering a large majority of the state’s population and COVID-19 cases, can get to 10 only with another outbreak at a care facility.

The governor on the one hand argues that we already have the equivalent of shelter in place, and at the same time the metric that she says still guides her decisions shows that shelter in place is not yet warranted anywhere in the state. Has that metric really been used thus far, and in what way? How do you get from the metrics to a list of particular additional businesses to close? What will happen when a region reaches 10? Will the governor order more stringent measures in just that region? Or will the whole thing be scrapped once a proper forecasting model is developed that meets with her approval?

One thing is clear: transparency has been sadly lacking, and for no apparent reason.

Peter Fisher is research director of the nonpartisan Iowa Policy Project.

pfisher@iowapolicyproject.org

IFP Statement: Disclose data, plans

It is past time to provide all Iowans with COVID-19 data, plans

A new policy brief by Iowa Policy Project research director Peter Fisher examines the arbitrary and backward-facing approach of the metrics that the administration of Governor Kim Reynolds has disclosed that Iowa officials are using in their response to the spread of the novel coronavirus. See that brief on the Iowa Fiscal Partnership (IFP) website.

The Iowa Fiscal Partnership released the following statement from Mike Owen, executive director of the Iowa Policy Project, about the lack of transparency in Iowa’s COVID-19 response.

“In a public health crisis like living Iowans and Americans have never seen, our leaders should welcome the value public scrutiny and perspective can bring to decision-making.

“It should not have taken an enterprising news reporter to coax out the short list of metrics[1] that Governor Kim Reynolds and her administration are using to make decisions about public safety. Responding to the crisis is public business, as consequential as most of us have seen. Iowans not only need to know what data is being used, and its sources, but how choices are being made with that information.

“Are other measures being considered? What measures have been dismissed? Who are the analysts? What comparisons are being made to other data and other states’ actions? These are only a few of the questions that logically arise. Not enough testing is being done to make the Governor’s metric of an infection rate meaningful, for one thing.

“The Governor asserts her actions thus far are as strong as official ‘shelter-in-place’ orders in other states. Even if comparisons wind up backing that claim, we need more information.

“Do we have the resources to make sure front-line health workers and all public and private workers handling essential services are protected? From medical care to corrections to seniors’ housing to day-care centers, do workers have the personal protective equipment to do their jobs safely? Do they have sufficient resources to protect the people in their care? Any of us could be among those needing care in the coming weeks.

“It is fair for Iowans to ask how they can expect that the state will avoid an overwhelmed health care system when we are relying on looser rules for social interaction than they are seeing in other states. Should we not build into public policy the findings of analysis that illustrate the benefit of reducing travel in preventing the spread of the virus?[2]

“It is not possible for Iowa to have all hands on deck to respond without knowing what resources we have, what we can reasonably expect to need, and to know how our leaders plan to bridge any gap.

“Yes, we are owed the information. It affects us all, and without it we cannot contribute with ideas to make solutions better or bring them along faster.

“It is time — past time — that all Iowans are brought to the table.”

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The Iowa Fiscal Partnership is a joint public policy analysis initiative of two nonpartisan, nonprofit, Iowa-based organizations — the Iowa Policy Project in Iowa City, and the Child and Family Policy Center in Des Moines. Find reports at www.iowafiscal.org, and the IPP and CFPC websites, www.iowapolicyproject.org and www.cfpciowa.org.

[1] Zachary Oren Smith, Barbara Rodriguez, Jason Clayworth, Des Moines Register, April 2, 2020. https://www.desmoinesregister.com/story/news/health/2020/04/02/shelter-in-place-iowa-covid-19-benchmark-guidance-tool-waits-for-hospitalization-outbreaks/5111747002/

[2] The New York Times, “Where America Didn’t Stay Home Even as the Virus Spread.” April 2, 2020. https://www.nytimes.com/interactive/2020/04/02/us/coronavirus-social-distancing.html?algo=top_conversion&fellback=false&imp_id=603400842&imp_id=967213594&action=click&module=trending&pgtype=Article&region=Footer

COVID metrics arbitrary, backward facing

State, health-care workers and public need more information to prepare for shortages and help find solutions

By Peter Fisher [updated April 6]

All but five states have now issued a shelter-in-place order, or have such orders covering parts of the state.[1] They have done so not just to reduce the spread of the disease and the number of residents dying, but to forestall a surge of cases that would overwhelm the health care system in their state. In doing so, they have relied on epidemiological data and projections indicating when their health care systems will face a shortage of hospital beds, intensive care units, and ventilators without serious restrictions on travel, business operations, and social activities.

One of those projections, by the Institute for Health Metrics and Evaluation (IHME) of the University of Washington and updated April 5, shows the wide range of possibilities. They predict a peak day of April 26, with Iowa needing between 53 and 438 ICU beds, and 150 as the best estimate, compared to 246 available beds. They predict a need for between 42 and 367 ventilators, and a peak of 17 deaths per day (with a range of 0 to 100), with 263 to 711 total deaths in the state by August.[2] These predictions assume that Iowa takes more serious measures in seven days — a stay-at-home order and mandatory closure of all nonessential businesses. If the governor still sees no need for further restrictions by then, the situation could be worse.

So what is the Governor relying on that leads her to believe that halfway measures are adequate to protect our health care workers and our citizens, and to prevent such shortages? The “metrics” and “data,” referred to repeatedly but vaguely in press briefings, became clear to the public only on Wednesday, when the “Guidelines for Implementing Public Health Mitigation Measures” were obtained by the Iowa City Press-Citizen. While we now know something of how the guidelines work, much remains a mystery. We do not know why this scoring system was adopted, who developed it, what science is behind the measures and the scores, whether any other state or country has used anything like it, or whether it was vetted by any qualified epidemiologists at Iowa universities or hospitals. The matrix cannot be found anywhere on the IDPH website, and the underlying data have not been released despite repeated requests by members of the media and others.

What we do know is that the application of the model does not give much hope to the many groups pressing the governor for more aggressive measures, most recently the Iowa Board of Medicine.[3] Suppose you live in the southeast portion of Iowa, where the overall incidence of COVID-19 is the highest in the state. Even there you are not going to get a shelter-in-place order from the governor anytime soon, as long as she is wedded to the IDPH matrix.

The matrix consists of scores of 1 to 3 on each of four measures and is applied to each of six regions in the state. Only when the score reaches 10 is a shelter in place order justified under the IDPH guidelines. The southeast region, which includes Johnson, Washington and Scott counties, along with 12 others, scores only a 7. Getting 3 more points will require either an outbreak at two nursing homes plus another 100 cases, or an outbreak at 3 nursing homes. That’s the only way the score will get to the magic number of 10 because the region can’t get any more points out of the other two measures. Only one nursing home outbreak, but 500 more cases, or 1,000 more cases? Too bad; the score is still stuck at 9.

That is just how arbitrary and rigid this matrix is.

So how does it work? We were able to construct at least part of the scores for each region based on data by county for population by age and the number of COVID-19 cases reported as of April 3. We relied on images of the regional map published in the press, and translated those to actual county boundaries.

The scores in the regional map above are the official scores being used as of April 6, according to The Des Moines Register. The Iowa Department of Public Health is not promoting this information prominently on its website. Because of a lack of data being made available in some of the official metrics from which the scores are compiled, the origin of the scores in some cases cannot be determined.

First, a region gets a score of 1 to 3 depending on the percent of the population age 65 or older. For most regions, the score is 2 because the share is between 15 and 19 percent. The central region, No. 1, which includes the Des Moines metro area, is a little younger, and gets only 1 point here. The north central region, No. 2, on the other hand gets 3 points, with more than 21 percent of the population over 65.[4] None of those scores are going to change. It just means that central Iowa is going to have a harder time getting to 10, north central an easier time.

Second, the region is scored on the percent of cases needing hospitalization. Statewide, that percent in Iowa has hovered between 26 percent and 28 percent for the last several days.[5] This is substantially higher than national rates, but this may reflect nothing more than low rates of testing among those without substantial symptoms in Iowa. The more we test among those potentially exposed to the virus, whether or not they are symptomatic, the more the number of cases will rise and the lower the percent needing hospitalization. However, it seems unlikely that this factor will fall below 15 percent, so we can pretty much assume it is 3 points statewide, and probably in each region. (Hospitalizations by county has not been released by IDPH).

More to the point, why is this rate in the decision matrix at all? It is a characteristic of the virus; is there any reason to expect it to be more severe, and therefore more likely to require hospitalization, over time, or in one part of the state than in another? Surely the total number of people requiring hospitalization at the projected peak is the critical number; the historical percent is irrelevant.

The third measure is COVID-19 cases per 100,000 population. A number from 6 to 20 is worth 1 point, 21 to 49 is 2 points, 50 or more cases is 3 (the maximum). As of April 3, this measure ranged from 7 in the northwest (region 3) to 29 in region 5 (which includes Linn County) and 35 in the southeast, which includes Johnson County.[6] That gives regions 1-4 each 1 point, regions 5 and 6, 2 points. The latter regions could be well over 100 cases per 100,000 people soon, but no matter how high it goes the most they will get is 3 points.

Finally, the matrix assigns one point for each outbreak at a long-term care facility, up to a maximum of 3. As of April 3, the only such outbreak that had been reported in the press was at a Linn County care facility. Does an outbreak at one nursing home predict a shortage of ICU beds over the entire population in a region? Probably not.

The arbitrariness of the measures, the score cutoffs, and the maximum scores are not the only problems with the matrix. The scoring is entirely backward looking. This is particularly dangerous for a disease that spreads so easily and where, as we all know by now, cases and hospitalizations grow exponentially, everywhere that the disease has been found. Historical data in Iowa and in places where the diseases arrived much earlier is useful, but only because it allows one to determine the rate at which the disease is spreading. The fewer the number of days it is taking for the number of cases to double, the sooner we will arrive at a peak, the sharper that peak will be, and the more likely it is that we face a potential health disaster. Again, projected cases and hospitalizations is the goal, not history.

The governor has complained that the IHME projection does not take into account measures already undertaken in Iowa — the now-mandatory closing of schools and the mandatory closing of some kinds of businesses. But she has offered no alternative projections, no projections at all. The state should be planning for the worst-case scenario, not the best case, but she has not disclosed what she sees as either scenario.

The IDPH matrix is not science-based guidance for decision-making. It is an arbitrary scoring method divorced from all the epidemiological analysis and modeling that is taking place elsewhere. It tells us nothing about when or by how much our health care system will face critical shortages. It is an embarrassment.

[1] The New York Times. https://www.nytimes.com/interactive/2020/us/coronavirus-stay-at-home-order.html

[2] University of Washington, Institute for Health Metrics and Evaluation, April 1, 2020, update. https://covid19.healthdata.org/projections

[3] Barbara Rodriguez, The Des Moines Register, April 3, 2020. https://www.desmoinesregister.com/story/news/health/2020/04/03/coronavirus-board-medicine-recommends-iowa-governor-issue-mandatory-shelter-place/2940467001/

[4] These scores are based on the counties included in the six regions according to the map released by the Iowa City Press-Citizen, in combination with the data on population by age and county from the most recent five-year average of the American Community Survey.

[5] IDPH data for April 1-3 shows that on average the sum of deaths, current hospitalizations, and hospitalized but released equals the total number of cases in Iowa that have at some point required hospitalization, assuming that those who died were first hospitalized. This number divided by total confirmed cases equals 28 percent.

[6] Analysis by the author using cases per county as reported by IDPH on the afternoon of April 3, and county population according to the American Community Survey.

Peter Fisher is research director for the Iowa Policy Project. An economist and one of Iowa’s leading experts on tax policy, he has published several analyses of criteria used in indexes of state tax systems, available at GradingStates.org. Fisher is professor emeritus in the School of Urban and Regional Planning at the University of Iowa.

Too soon to consider recovery?

Posted April 1st, 2020 to Blog
What is needed in a pandemic is for citizens to stay home, and for public policy to assure access to unemployment insurance and health care, and push support to the health system. Economists such as former Labor Secretary Robert Reich are making these points — that limiting the spread of the coronavirus is the top priority to save lives.[1] When even economists are pressing the point about public health, our leaders should pay attention. Now is not the time to talk about being “open for business” prematurely, as President Trump once suggested we do by Easter. That is not to say a public health spotlight precludes steps in the coming weeks and months to set up recovery when that can be the main focus. Now, jobs remain in critical services in hospitals and electric stations, and some in construction. Factories where people stand next to each other on a production line have different social distancing from workers who build things in the open air. We could expand more of the latter jobs right now where the materials are at hand. Good examples: Wind turbines and solar installations and the power lines that connect them to the electric grid. Right now we could be constructing clean energy facilities that can be producing electricity in six months or a year when we all want demand to expand. It is an opportune moment to think ahead and start replacing older coal production plants, which have their own health problems. Public policy has a role here. Just before the Iowa legislators recessed because of the COVID-19 pandemic, they passed — and Governor Kim Reynolds signed — a bill to stabilize the solar industry. It would do this by setting the price for the next seven years for the electricity that MidAmerican and Alliant buy from homeowners and businesses.[2] Another step the Legislature could take is lifting the limit on the tax credit for businesses and homeowners when they install solar. The annual amount that could be taken on the credit was not fully used in the first year, but in all years since 2013 installations exceeded the cap, now at $5 million per year, pushing installations completed later in the year to a waitlist.[3] The tax credit eventually comes but not until at least a year later. While an installation completed today will get a federal tax credit when taxes are filed in April 2021, the Iowa tax credit will not happen until 2022 or later. Why make these Iowa investors wait? Extending the total amount eligible for the credit from $5 million to perhaps $20 million would further stimulate the construction of solar panels just when the economy needs the jobs. There also is a federal role, as the amount of that credit for both solar and wind is phasing out. This would be a good time to stop the phaseout for the next several years. Tax credits of electric cars could also be enhanced. COVID-19 has slammed the economy. We need to think about when we will recover but also how we will recover. Jobs in clean energy have been on a growth curve that can be re-established quickly. And these jobs are creating a new energy system that will help us with the next crisis, climate change. Most agree we should follow science to confront the pandemic. We should also follow the science to prepare for the next crisis — climate change. David Osterberg is an economist and lead environmental researcher at the nonpartisan Iowa Policy Project in Iowa City. Contact: dosterberg@iowapolicyproject.org. A version of this column also ran in the April 1 Quad-City Times.         [1] MSNBC interview, March 17, 2020. https://www.msnbc.com/the-beat-with-ari/watch/-our-economy-is-shutting-down-clinton-wh-veteran-pushes-lives-over-dollars-in-covid-19-crisis-80868933847 [2] O. Kay Henderson. Iowa House and Senate give solar bill unanimous support. Radio Iowa March 4, 2020. https://www.radioiowa.com/2020/03/04/iowa-house-and-senate-give-solar-bill-unanimous-support/ [3] Iowa Department of Revenue. Solar Energy System Tax Credit Annual Report for 2019. https://www.legis.iowa.gov/docs/publications/DF/1126111.pdf

New solutions needed long term

Posted March 26th, 2020 to Blog
Current estimates of job losses in the COVID-19 recession are hard to fathom. Even with a sizable stimulus, the national economy would shed nearly 14 million jobs by mid-summer; Iowa is projected to lose more than 140,000. To make matters worse, as Josh Bivens of the Economic Policy Institute underscores, this recession is “laser-targeted at low-wage, low-productivity, and low-hours jobs in service industries.”[1] Our most vulnerable workers, in other words, will bear much of the burden: They do not have the option of working from home — a luxury enjoyed by two-thirds of workers in the top quarter of the earning distribution and by one-third of white workers, but by fewer than 1 in 10 workers in the bottom quarter of the distribution, 1 in 5 African-American workers and 1 in 6 Latinx workers. These vulnerable workers face both a much greater risk of unemployment as the service economy shuts down and a heightened risk of exposure to the virus if they keep working. This is a scale of unemployment and social and economic dislocation that our existing programs are ill-equipped to handle. This demands a policy response — state and federal — unprecedented in its scale, and innovative in its efforts to reach those most affected. At the forefront of that policy response is both a dramatic expansion and a fundamental rethinking of unemployment insurance. The first step here has already been taken by the federal government. The Families First Coronavirus Response Act (passed March 18) pumped $1 billion into the administration of state unemployment insurance (UI) programs, in exchange for new state standards and conditions. In order to draw down these funds, states must improve their methods of notifying workers of their eligibility for benefits, provide multiple (not just online) methods of filing, provide prompt notice of the receipt of a claim, waive waiting periods for benefits, waive the requirement that recipients be actively searching for work, and ensure that employers are held blameless for COVOID-19 layoffs. (Conventionally, UI is “experience-rated” so that employers with histories of layoffs are taxed at a higher rates). As Peter Fisher pointed out in recent days, Iowa has met all these conditions. There is still a lot of work to be done — not just to meet the current crisis, but to ensure that our unemployment insurance system is recast for the 21st century and ready for the next crisis. The first task is to make unemployment insurance accessible and available to more workers. In Iowa, just 41 percent of unemployed workers ever see a benefit check. This is better than the national rate (28 percent), but it is still a scandal that well over half of the jobless are left in the cold. We should sustain the “Families First” Act’s commitment to raising the recipiency rate by streamlining the claims process. Federal and state unemployment law should revise our definition of “employee” to better capture the diversity of employment (including the self-employed, gig workers, and the like) in the modern economy. Too often, workers — cleaners, homecare workers, delivery drivers — are misclassified as “independent contractors” and shut out of basic social insurance programs like UI. The Pandemic Unemployment Assistance Program embedded in the latest COVID-19 stimulus bill provides up to 39 weeks of benefits to those (like the self-employed) otherwise ineligible for UI. This is a start — but the real fix would be to recast the law so that such workers are eligible in good times and bad. By the same token, we should make permanent the more generous standard for a “good cause” separation, allowing workers — not just in pandemic conditions — to qualify for UI when they leave their jobs for compelling personal reasons. And we should be more flexible on the terms of “monetary eligibility.” As it stands, benefits in Iowa are based on earnings in the previous year.[2] Many other states allow workers with more sporadic work histories to elect an extended or alternative based period when calculating eligibility. Iowa should make better use of its work sharing program, which allows workers partial compensation for reduced hours, while retaining their attachment to the labor force and their access to job-based benefits such as pensions and health insurance. And we should make benefits available to new entrants to the labor force — students graduating into a recession, returning caregivers, the formerly incarcerated — who deserve support even in the absence of a recent work history. Second, we need to bolster the size and the duration of the basic benefit. Iowa’s current “replacement rate” is less than 50 percent of current wages — higher than the national average (38 percent) but still woefully insufficient to maintain basic expenses.[3] The logic here, of course, is that a low replacement rate will compel the unemployed to look for work. But low replacement rates (and short benefit windows) create enormous economic burdens and, by pressing workers back into the labor force, actually worsen re-employment prospects. As a baseline, UI benefits should be closer to two-thirds wages. And, for the duration of this crisis, they should be 100 percent. After all, places of employment are under order to close down, and those displaced have few options. This is why the pending stimulus bill bumps UI benefits by $600/week through the end of June. Finally, we need to improve the funding of state unemployment insurance programs. The $1 billion boost to administration in the “Families First” legislation does not come close to backfilling cuts in federal aid since the 1980s. During the last recession, 36 state UI trust funds went broke — and most of those entered the current crisis with insufficient reserves. Iowa’s trust fund is in better shape than most, but all state funds will be exhausted once this crisis lifts. Under current law, the state only taxes the first $7,000 in earnings. This should be increased dramatically (Social Security taxes the first $137,700), so that revenues are sufficient to sustain UI administration, and pay extended and disaster benefits when needed. Federal emergency legislation — some in place, some in the pipeline — will install many of these reforms on a temporary basis. But many of the problems being addressed — the accessibility of benefits for deserving workers, the low percentage of the unemployed who receive benefits, the insufficient level and duration of benefits — are broader problems with the UI system itself. Iowa should, of course, do what it can to qualify its workers for extended and enhanced benefits paid for with federal dollars. But it should also follow the lead of other states in making its UI system more secure and equitable on a permanent basis. [1] Josh Bivens, Economic Policy Institute, “Coronavirus shock will likely claim 3 million jobs by summer,” March 17, 2020. https://www.epi.org/blog/coronavirus-shock-will-likely-claim-3-million-jobs-by-summer/ [2] The previous year is defined as the 4 calendar quarters prior to the quarter immediately preceding the month you apply. So if you apply in March 2020, the most recently completed quarter is Oct-Dec 2019, so your benefits are based on earnings in the four quarters Oct-Dec 2018, Jan-Mar 2019, April-June 2019, and July-Sept. 2019. You must have earnings in at least two of those quarters. [3] The inadequacy of this replacement level is compounded by the fact that the benefits are still taxable, and yet they do not count as earnings for purposes of the Earned Income Tax Credit, creating an additional income loss for low wage workers receiving that tax credit. Colin Gordon is a University of Iowa professor of history and is senior research consultant for the nonpartisan Iowa Policy Project. He has authored several IPP reports since the organization began in 2001. Among these are the State of Working Iowa series, and the October 2019 report “Race in the Heartland: Equity, Opportunity and Public Policy in the Midwest,” for Economic Analysis and Research Network members IPP, Policy Matters Ohio and COWS.