Some employers are doing well amid the coronavirus. Some are not

Hats off to Darden Restaurants, owner of Olive Garden, LongHorn Steakhouse and other casual dining chains. The company announced last week that it had implemented paid sick leave policy for its 190,000 employees, including a starting salary for those with at least 6 months of seniority.

Now take a gimlet eye at Richard Branson, whose Virgin Atlantic is asking its 10,000 employees to take eight weeks unpaid leave over the next three months with the aim of “significantly reducing costs without losing jobs”. (Virgin Atlantic is losing money, but Branson’s net worth is over $4 billion.)

Or Whole Foods CEO John Mackey, who last week reminded his employees that they could “donate” their paid vacation balances to colleagues facing medical emergencies. Mackey’s email generated an objection from Amazon, which acquired the grocery chain in 2017, that Mackey’s policy predated the acquisition.

We have lived off the creation of low-wage, low-hour jobs in sectors that happen to be incredibly vulnerable to this particular crisis.

Daniel Alpert, Cornell Law School

Whole Foods workers, like all other Amazon employees diagnosed with COVID-19 (the disease caused by the novel coronavirus) are subject to Amazon’s recently announced policy granting them up to two weeks paid vacationsaid the parent company.

These examples only hint at the range of responses employers have made to the prospect that many of their workers may have to spend days off or in quarantine – whether self-imposed or mandated – to fight the coronavirus pandemic. Some employers are stepping up their liberalized paid sick leave policies. REI and Patagonia, which have long been known for their good customer relations, which have temporarily closed their retail stores and continue to serve customers online, said their store employees will continue to be paid during the closings.

Others do it reluctantly. And still others may not be doing much.

The general picture is one of extreme fragility for millions of American workers, especially in consumer service companies.

This reflects a trend that has been developing for more than three decades.

“We have lived off the creation of low-wage, low-hour jobs in industries that happen to be incredibly vulnerable to this particular crisis,” says Daniel Alpert, an investment banker and adjunct professor at Cornell Law School who has helped develop the Job Quality Indexwhich tracks the relative increase in private sector jobs paying less than the average weekly income of all US production and non-supervisory jobs.

“In the current situation, where you have a dead stop in consumer activity, any ‘customer-facing’ business where the customer is no longer ‘facing’ is under a huge threat,” Alpert told me. .

The rise in consumer services jobs that Alpert and his colleagues track mirrors the decline in manufacturing employment; its figures show that employment in restaurants and bars began to outpace that of the industry in late 2009, and has never looked back. In 1990, the 12.7 million manufacturing jobs accounted for 17.3% of all core workers. Today they are down to 9 million jobs and 8.5% of the core workforce.

Restaurant and bar workers now overtake manufacturing workers in the United States, presenting new vulnerabilities to the economy


Service-sector workers are not only poorly paid and enjoy fewer hours than higher-paid, goods-producing workers, but their weekly schedules are far more unstable than traditionally.

“There has been a shift toward just-in-time scheduling,” says Daniel Schneider, a UC Berkeley sociologist and founder of the Shift Project, which collects data on scheduling practices from thousands of employed retail workers. by large companies. “Their business model is one of part-time instability, in which workers are scheduled at the last minute and must remain on call.”

This presents a challenge to the traditional social safety net, says Schneider. Many safety net programs, including food stamps, impose work requirements on enrollees. “Labor volatility makes reporting hours very difficult.”

The vast majority of these workers are not the proverbial “gig workers,” such as Uber and Lyft drivers, who are treated as non-employees with virtually no employment rights. Most receive paychecks from employers, including large corporations, Alpert observes.

However, this does not necessarily secure their working hours. Many are victims of a nearly 50-year trend in which large corporations have been offloading their responsibilities to their frontline workers.

Taco Bell, for example, announced that in its company-owned restaurants, it continue to pay employees who are required to stay home or who work in a place that has been closed, for their regular hours. He said he was “actively working with our franchise partners to encourage a similar approach.” But more than 4,600 of Taco Bell’s 6,000 restaurants are owned by franchisees.

Darden’s sick pay policy applies to its 1,799 restaurants in the United States and Canada, but not to the 80 franchise restaurants in the United States and abroad, the company told me.

McDonald’s says its full-time and part-time employees can earn up to five days of sick leave a year and says it will pay employees at company-owned restaurants who are ‘asked to self-quarantine’ up to 14 days off. (The company did not specify whether these were workers ordered to quarantine or self-quarantine due to contact or care with infected people.) But these policies only cover the 205,000 workers from its offices and company-owned restaurants. The vast majority of McDonald’s locations — 36,000 of the roughly 39,000 restaurants worldwide, employing at least 200,000 additional workers — are franchises that can set their own workplace policies.

McDonald’s, as it happens, has been a strong opponent of policies that would hold franchise parent companies like itself accountable for pay and working conditions in its franchises. Unlike the Obama administration, which leaned toward these policies, the Trump administration blocked them.

The Job Quality Index shows that low-wage, low-hour jobs have taken over the US workforce for decades.

The Job Quality Index shows that low-wage, low-hour jobs have taken over the US workforce for decades.


Many companies that have liberalized their sick leave policies are still imposing conditions that could discourage workers exposed to the novel coronavirus from staying home, at risk to colleagues and customers. Amazon’s grant of up to two weeks of paid vacation applies to “employees diagnosed with COVID-19 or placed in quarantine.” Hourly workers are entitled to unlimited leave until the end of March – unpaid.

Clearly, the realities facing frontline service workers make a payroll tax holiday, heavily favored by President Trump, virtually unnecessary; workers laid off or facing deep reductions in hours pay little or no payroll taxes, which are levied at a rate of 12.4% on the first $137,700 of wage income this year, split equally between the employer and the employee. For a minimum wage worker working 20 hours a week, that’s as little as $8.99 a week.

Workplace advocates and some members of Congress are talking instead of a “helicopter airdrop” of cash, similar to the one-time government checks of up to $1,200 for married couples, including $300 per child, issued in 2008 Payments were staggered. starting at a family income of $150,000 (for couples), but even low-income households that owed no federal taxes were eligible for at least $300, provided they earned at least $3,000 during the year.

Policymakers will need to view these payments in different terms than in the 2008 financial crisis. “Helicopter money has always been a way to stimulate consumption out of a recession,” says Alpert. “It’s different – it’s money for survival.”

What could emerge from the coronavirus crisis is a new, or at least restored, approach to the working relationship by government and the private sector. Alpert points to the epochal shift in the 1930s, when the New Deal firmly brought government into society as an economic mediator. The New Deal gave the government the power to set the minimum wage, ban many workplace abuses, and grant workers new rights to unionize.

Many of these gains were reversed after 1980 and the advent of the Reagan administration, which aimed to downsize government and started the trend of punching holes in the safety net, removing regulations applying to employers and to inspire them (largely by breaking up the air traffic controllers’ strike) to get tough on the unions.

This approach is still visible in the coronavirus bill drafted by the Democratic House majority and awaiting consideration by the Republican-controlled Senate. Even Mitt Romney, not generally known as a friend of the working class, offered to immediately issue a one-time $1,000 check to each American. The measure’s mandate for paid sick leave exempts large employers — those with 500 or more workers — and allows small employers to claim hardship exemptions.

“We should put big business on the table,” says Schneider. He is right. Nothing has shown the need for a radical change in the way we protect the livelihoods of our most vulnerable workers in the situation we find ourselves in today.

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