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Three Principles for an Equitable Recovery

K. Sabeel Rahman

The response to the COVID-19 crisis must include investments in public goods and health infrastructure, breaking up concentrated economic power, and equitable access for Black and brown communities.

Despite the imminent arrival of a COVID-19 vaccine, the resurgent pandemic continues to devastate Black and brown communities—and the economy. The pandemic's impact on working families and on Black and brown communities in particular represents a titanic failure of government. Racial disparities in mortality reflect two long-term patterns: disinvestment from our public health infrastructure and concentration of poverty and pollution in communities of color. As the Biden-Harris administration develops its strategy for relief and recovery from the pandemic, it must draw on lessons from past crises.

Previous moments of crisis provide precedent for the present-day situation. Following the Depression, the New Deal ushered in the modern safety net and regulatory state, as FDR’s administration helped create Social Security, the Tennessee Valley Authority, public jobs programs, and new forms of federal regulation of big corporations and of finance and labor rights. The civil rights movement embedded many of its aspirations in new federal powers, such as the Voting Rights Act, and in enforcement requirements for equal access to government services. After the 2008 financial crisis, the Obama administration created the Consumer Financial Protection Bureau, while the Federal Reserve established new lending programs to stave off financial collapse for a range of businesses.

But these past measures also had their limitations. The New Deal systematically excluded Black, brown, and women workers. The response to the 2008 financial crisis did little to dismantle the concentrated power of Wall Street and bailed out banks rather than homeowners. The strengths and failures of these efforts highlight three key steps a new administration must take to meet the challenge of this moment.

1. Expand direct public provision of basic goods and services.

For decades, we have dismantled and divested from public goods and public infrastructure—from health care to drug development to environmental protections to a truly inclusive safety net. This neglect made the pandemic and economic crisis exponentially more devastating. Any effective response to the COVID crisis requires a commitment to direct public provision of key goods and services, either through the government or through the creation of “public options”—state-run alternatives that compete alongside private alternatives. For instance, rather than running a Paycheck Protection Program through private banks—which predictably steered the cash toward the banks’ preferred clients and excluded many small businesses, especially in communities of color—a new approach could provide direct cash to families and businesses from public actors like the IRS or through a form of public banking via the Fed or the post office.

2. Dismantle economic autocracy in the workplace and in the marketplace.

By stripping away benefits and suppressing wages while demanding more and more production, the modern workplace has become a deadly machine for investor return, at the expense of worker safety, health, and economic security. Some corporations, like Amazon, have amassed so much power they essentially set the rules for the marketplace. To disperse this one-sided economic power, the Biden-Harris administration must expand antitrust regulations and enforcement, revive public utility regulatory tools, and enforce anti-discrimination, fair pricing, rules of “common carriage” requiring fair and equal access, and basic safety rules. This also will require investing in unions and worker organizing, as well as looking beyond conventional forms of collective bargaining to place workers in positions of authority on corporate boards and other decision-making bodies.

3. Institutionalize inclusion and accountability.

In many ways, policy strategies in the modern economy reproduce the existing racial and gender hierarchy. These strategies include: exempting employers of Black, brown, and women workers from many labor standards, privatizing public goods and services, and increasing barriers to public services through means-testing, onerous paperwork requirements, and punitive measures that state and local officials often weaponize to further exclude communities of color. The current response to the COVID-19 crisis replicates some of these exclusionary dynamics. The new administration must proactively move away from means-tested, exemption-riddled, and obscure incentive programs like tax credits and complex benefits packages to social programs that, like Social Security, are simpler, more visible, and universal. The U.S. must work toward equitable access to benefits, focusing particularly on Black and brown communities. This will call for more direct forms of accountability, centering the voices of Black and brown communities and working families in the design and implementation of any economic crisis response. One current example is wage boards, which empower workers to set labor standards.

These three principles provide a framework for the Biden-Harris administration to tackle the economic crisis. They also represent a radically different moral vision for a post-COVID economy premised not on the false freedom of the “free market” but on the true liberation of working people—and Black and brown communities in particular—from the kinds of insecurity, vulnerability, and exploitation that devastate families and communities. But we cannot leave it up to a new administration alone, even one staffed by personnel committed to bold ideas. These are fights progressives will have to take on, inspired by a clear moral vision of a truly inclusive economy, and led by the organized and mobilized power of working families and Black and brown communities.