US sick leave aid leaves millions of workers in the cold

It’s usually standing room only at O’Duffy’s Pub on St Patrick’s Day, as patrons clad in green pack into the bar to share a drink or two and plenty of food. But this year, owner Jamie Kavanaugh and one of his bartenders sat alone on the holiday that commemorates Ireland’s patron saint. Like restaurants across the country, Kavanaugh’s Kalamazoo, Michigan, bar is now only allowed to serve takeout food as part of social distancing ordinances meant to curb the coronavirus pandemic.

“People are usually celebrating, smiling, toasting one another, sharing hugs and smiles. Instead, the pub is empty,” Kavanaugh told Al Jazeera. “People that came in for takeout didn’t even want to come in the door, and they’re afraid to use the pen to sign.”

The city’s annual St Patrick’s Day parade was also cancelled because of the virus, which has infected more than 4,000 and killed 75 across the Untied States. The virus has also taken a devastating toll on the economy and small businesses like Kavanaugh’s. He estimates he’s lost between $20,000 and $30,000 in sales over the last four days alone.

And he wonders how he’ll pay the more than 16 people he employs as servers, bartenders, cooks and dishwashers without decimating his own retirement savings.

“It seems like this crisis is going to be what I have been working all my adult life for,” Kavanaugh said. “I won’t be able to pay myself in the short term. I will have to dig into savings, money that’s set aside for my retirement, in order to keep the restaurant going and pay the bills, and do what I can to pay the staff and maintain them.”

‘Hugely devastating’
The ongoing coronavirus crisis has spurred the US central bank, the Federal Reserve, to take extraordinary measures to shore up the economy, including slashing interest rates to near zero and restarting its crisis-era bond-buying programme to keep credit flowing to consumers and businesses.

But monetary moves alone are not enough to offset the shock coronavirus is delivering to the US economic ecosystem.

The administration of President Donald Trump has unveiled a $1.3 trillion stimulus plan that includes sending $1,000 cheques to Americans.

But legions of workers and small business owners are worried the plan will not be enough to stop the US economy from falling into recession – tanking their livelihoods in the process.

Among those most at risk of getting sidelined financially are low-wage service industry workers.

Across the country, service workers have already seen their schedules cut or eliminated as officials urge social distancing and shutter bars, restaurants and non-essential shops in several states. Many are paid below the standard federal minimum wage because they earn tips. In Michigan, where Kavanaugh has his bar, the minimum wage for tipped employees is just $3.67 per hour.

Elise Gould, a senior economist at the Economic Policy Institute, told Al Jazeera that the crisis could be “hugely devastating” for service workers.

“They don’t have the customers; they’re not going to get their wages sometimes. They’re not going to get any paid leave, or in cases that they are, they’re not going to get those tips,” she said. “And we don’t know how long this is going to last.”

On Wednesday, President Trump signed into law the The Families First Coronavirus Response Act extending free coronavirus testing to all who need it, as well as enhancing food assistance, unemployment benefits, and paid sick leave and emergency leave to many American workers who don’t already have it.

The legislation requires businesses with fewer than 500 employees to provide up to two weeks of paid sick leave or emergency leave to workers sidelined by coronavirus, and give them the option to take up to 10 weeks off at reduced pay if necessary.

It also lets the self-employed claim refundable tax credits for expenses if they can’t work because of coronavirus. Companies that employ fewer than 50 people can apply for an exemption.

But the legislation does not apply to large businesses, many of which may or may not offer paid sick leave. And among large businesses that do, not all offer enough to cover a 14-day coronavirus quarantine should a worker be exposed to COVID-19.

That potentially leaves more than 20 million American workers without paid sick leave, says Gould.

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