[SEATTLE, WA] – U.S. Representative Pramila Jayapal (WA-07), Co-Chair of the Congressional Progressive Caucus, today announced introduction of the Paycheck Guarantee Act to end mass layoffs, keep workers in their jobs and connected to their health care and other benefits, prevent employers of all sizes from being forced to close permanently, and ensure that the economy is ready to restart when the COVID-19 pandemic ends. A white paper on the bill is available here, and a one-page summary is available here.
Yesterday, the U.S. Department of Labor reported that more than 16.8 million Americans have filed for unemployment benefits in the last three weeks, and there is a significant risk of Great Depression-era levels of unemployment and permanently shuttered businesses as the COVID-19 pandemic continues. The Paycheck Guarantee Act would put the brakes on mass layoffs and economic decline to enable a speedier and smoother recovery once the crisis ends. The bill creates a streamlined program to provide a three-month federal guarantee for 100 percent of worker salaries of up to $100,000 to ensure employers of all sizes keep workers on the payroll and continue to provide employer-sponsored benefits. This paycheck guarantee would automatically renew on a monthly basis until consumer demand rebounds to pre-crisis levels. The bill also includes strong worker protections and fraud prevention measures.
“A federal paycheck guarantee is a real solution that matches the scale of the crisis. Mass unemployment is a policy choice. We can and should choose differently,” said Jayapal. “A federal paycheck guarantee would stanch more layoffs and unemployment, and quickly and reliably deliver relief to workers. Workers would not be forced to apply for unemployment insurance, overwhelm that system and then have to once again find a job. Businesses of all sizes would be able to keep workers on payroll and benefits—and be able to quickly re-open—partially or fully—without having to rehire and retrain their workforce.”
The Paycheck Guarantee Act is co-sponsored in the House by U.S. Representatives Mark Pocan (D-WI), Earl Blumenauer (D-OR), Brendan Boyle (D-PA), Rosa DeLauro (D-CT), Barbara Lee (D-CA), and Andy Levin (D-MI). The bill is also endorsed by leading economists, labor unions, businesses and a diverse set of national and local organizations.
“Congress needs a more forceful response to the job crisis. If nothing changes, the unemployment rate will soon exceed 20 percent. The federal government needs to guard against mass unemployment by guaranteeing paychecks, like many other countries are already doing. Rep. Jayapal’s Paycheck Guarantee Plan is a critically important step that would save millions of jobs and put the United States on track for a faster recovery,” said Gabriel Zucman, professor of economics at the University of California, Berkeley.
“With jobless claims reaching nearly 17 million in just the last three weeks it’s clear that Congress needs to do more to stop the economic devastation we are facing as we combat this pandemic. Rep. Jayapal’s bold proposal will keep workers paid, eligible for benefits, and connected to their employers. Keeping these labor market matches intact will provide immediate relief to many workers and it will also ensure that the economy recovers quickly when the pandemic subsides,” said Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute and former chief economist at the U.S. Department of Labor.
“Congress must take action on the Paycheck Guarantee Act to help to end mass layoffs, keep working people paid and connected to their healthcare and other benefits. This type of bill is vital to ensuring that the economy is ready to restart when the pandemic ends by protecting the health, safety and long-term economic well-being of working people across America,” said Mary Kay Henry, international president of SEIU.
“American families are struggling to pay their bills as unemployment claims skyrocket to numbers we haven’t seen since the Great Depression. To avoid laying off educators as the economy struggles, there needs to be real solutions to keep local and state revenues from drying up during this global crisis. The National Education Association has advocated Congress for an education stabilization fund to keep dramatic cuts from hitting our schools, impacting student services and ensuring educators do not lose their jobs. Congresswoman Jayapal’s Paycheck Guarantee Act is another step forward in this fight because it would provide much-needed relief by helping employers keep workers paid and out of the unemployment line and by keeping workers enrolled in employer-sponsored benefits, including health care — something that’s paramount during a global pandemic,” said Lily Eskelsen García, president of NEA.
“To tackle this pandemic, we’ve asked businesses to close and workers to stay home. But this doesn’t have to result in layoffs. The Jayapal bill will extend a paycheck guarantee to all workers, like the one we secured for aviation workers. Keeping workers paid, connected to their health care, and ready to work again when the virus is contained is good for workers in the short-term and good for our economy in the long-term. This is the best economic policy, but it’s also going to save lives and help our medical professionals because the vast majority of Americans will have the means to stay healthy and be helpful,” said Sara Nelson, international president of the Association of Flight Attendants-CWA, AFL-CIO.
“The financial devastation of COVID-19 to small businesses and working people has been stunning and threatens to upend our entire economy. We applaud Representative Jayapal’s leadership in developing the Paycheck Guarantee Act, which provides a bold and workable solution that addresses the true severity, scope and potential duration of the financial crisis that small business owners and their employees are facing right now. It is exactly the type of policy that will secure our small business economy and keep millions of workers in their jobs and homes until the threat of the virus has passed,” said Amanda Ballantyne, executive director of Main Street Alliance.
“Marching toward mass unemployment as if it’s inevitable makes absolutely no sense at all. The government is shutting down businesses. It should cover workers’ paychecks and benefits. It’s that simple. Rep. Jayapal’s Paycheck Guarantee Act would do exactly that,” said Liz Watson, executive director of the Progressive Caucus Action Fund.
“As a businessperson focused on both my team members and the economy at large, this plan is not just reassuring but an imperative next step. America needs to help get people back to work and businesses on their feet without missing a beat. This is not a new expense—it’s an investment in long term job and wage growth that will pay itself back many times over,” said Joe Sanberg, co-founder of Aspiration, Inc.
“During this pandemic, every American worker and small business owner should be safe and secure in their job, in their home, and with their health care. The Paycheck Guarantee Act is exactly the kind of bold action that government needs to take right now to support working families in this time of extraordinary need, and in doing so help secure a quicker, more equitable recovery,” said Andy Green, managing director, economic policy, at the Center for American Progress.
“During the last recession, unemployment and under-employment hit Black and brown communities the hardest, and the scale of our current unemployment crisis will deepen our racial wealth gap. Keeping working people on payroll at their employers is the best way to allow working people to minimize the economic dislocation that is compounding our public health crisis. We know that wage theft is rampant during normal times, especially for immigrants, workers of color, and low wage workers—and it is especially critical that workers can enforce their right to keep their income and benefits when the government is guaranteeing it,” said Jennifer Epps-Addison, co-executive director at the Center for Popular Democracy.
The Paycheck Guarantee Act would:
- Cover 100% of wages for workers earning salaries up to $100,000 to ensure that employers keep workers paid and out of the unemployment line
- Keep workers enrolled in employer-sponsored benefits, including health care
- Encourage employers to rehire recently laid-off or furloughed workers by covering payroll retroactively to the start of the crisis
- Cover essential business expenses like rent, to ensure that businesses don’t shutter completely and can re-open when the pandemic ends
- Get support to workers and employers as quickly as possible, using existing payroll tax infrastructure to facilitate delivery of payments
- Keep workers attached to the labor market and businesses ready to reopen, speeding up the economic recovery.
The Paycheck Guarantee Act also includes strong protections from fraud and abuse and converts any overpayments into low or no-interest loans, repayable by the employer. A white paper on the bill is available here, and a one-page summary is available here.
The bill is endorsed by the following national organizations: American Federation of Teachers; Americans for Financial Reform; Association of Flight Attendants-CWA, AFL-CIO; Center for American Progress; Center for Economic Policy Research; Center for Popular Democracy (CPD) / CPD Action; Climate Justice Alliance; Community Change Action; Economic Policy Institute; Indivisible; Main Street Alliance; National Domestic Workers Alliance; National Education Association (NEA); People’s Action; SEIU; Strong Economy for All Coalition; and UNITE HERE.
The bill is endorsed by the following state-based and local organizations: ACCE; Arkansas Community Organizations; Black Leaders Organizing for Communities (BLOC); CASA in Action; Communities United; Flint Rising; Make the Road Pennsylvania; New Georgia Project Action Fund; One Pennsylvania; and Rights and Democracy.
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