Is starvation the best way to get someone to return to work?

I read this morning that, as part of negotiations over the next coronavirus aid bill, Republicans are asking for support for people going back to work, as opposed to just those laid off from it. Of course, given that the novel coronavirus isn’t going away anytime soon, we need to continue unemployment benefits beyond July 31, when the current $600/week national add-on to state benefits goes away. Just as importantly, benefits can’t automatically be taken away if a worker’s employer declares they’re open for business again (as is the case now), if the employer hasn’t taken the steps necessary to protect their workers.

Normally, OSHA would take care of workplace safety, but under current management they’re specifically disavowing any desire to issue anything more than voluntary guidelines. At a minimum, OSHA needs to make those guidelines mandatory (and they should incorporate some of the detailed guidelines the CDC developed, but that the administration suppressed a couple weeks ago), and be given the money to hire the inspectors required to make them stick.

But this will require more than money. OSHA’s current policy is only to conduct an onsite inspection for a Covid-19 complaint at health care facilities – for all other workers, they’re totally dependent on their employers doing the right thing (check with meat packing workers to see how well that worked). What’s OSHA’s reasons for this policy? They say they’re concerned about taking "appropriate diligence to protect our own personnel."

So think about it: OSHA a) Says voluntary compliance is working (meaning employers can be counted on to protect their workplaces), yet b) They think all workplaces except health facilities shouldn’t be inspected, because of the risk to their own personnel! Kind of sounds like voluntary compliance isn’t working, doesn’t it? If it were, why would they be worried about their personnel?  Until there are mandatory standards and inspections in all types of workplaces, nobody should have their unemployment insurance payments cancelled, if they say they don’t feel safe to return to work.

But that raises the legitimate question Republicans have raised before: If people can receive something close to what they used to make right now just by staying on unemployment compensation, what incentive do they have to go back to work at all – even if they no longer feel unsafe returning to work?

And here’s where Milton Friedman comes in (who I’ve discussed in my previous two posts). In the early 1970’s, he promoted the idea of what he called a negative income tax: an amount that all low-income people would receive, that would be completely on top of whatever pay they receive. They would get it whether they work or not.

Friedman’s reason for advocating this was very simple: If a worker loses benefits by going to work, that loss acts exactly like a tax on his or her earnings – and if it’s anywhere close to what their earnings will be, they’ll decide just to stay unemployed. By paying the benefit amount on top of the worker’s earnings, they’ll have all the more incentive to go to work.

This idea later turned into the Earned Income Credit, which was instituted by Richard Nixon and is still in place – although it’s too small to solve the problem now, and it doesn’t apply to anyone without children. The big difference between Friedman's negative income tax and the EITC is that the latter only applies to people who are working (although there are exceptions for mothers with small children, etc), which of course means that it has limited benefit today, since so many aren't working.

So we have two problems with getting people to go back to work. Both need to be solved:

1. They’re going to be reluctant to go back until they feel safe. This requires making workplaces safe, but it also requires letting people stay on unemployment until their workplace really is safe. And frankly, the OSHA process I described above will take a long time to put in place, since that agency has taken huge financial and ideological hits in recent years, and won’t be rebuilt in a day.
2. Yet even if a worker feels safe, they won’t want to go back to work if their unemployment insurance payments provide them anywhere near the income they think they need to live. And when those payments stop, if they still don’t feel safe to return (or they have to care for an elderly parent, etc), they’ll be out of luck: Either starve or put your fears aside.

We can get out of this trap through an idea that’s been discussed for a long time – Universal Basic Income. My college roommate and longtime friend Dr. Michael Howard of the University of Maine has been one of the leading proponents of this idea for around 20 years.

The idea is very simple: Everyone (rich or poor) gets a certain payment every month, and it’s paid whether they work or not – proposals are usually in the $1,000 to $2,000 per person per month range (Andrew Yang’s was $1,000 per month per adult). If someone thinks $1,000 a month is all they need to live on (say, a single starving artist), they’re free not to work. But most people will want this to be a supplement to their income, not their total income. And this might overcome their reluctance to return to work.

But suppose it doesn’t (and there are a lot of good reasons why some people might never want to work in a regular workplace again. For example, given that people over age 60 account for over 80% of total Covid-19 deaths in the US, anyone over that age - like me! - should think hard about ever being in regular contact with a large group of people until Covid-19 is totally under control in the US – which might be never, if no vaccine appears). Then the person will at least have their Basic Income payment to live on – although it will never be the key to wealth and prosperity.

If you’d like to learn more about UBI, here is an email Mike just sent me (slightly paraphrased):

“One useful site is the Basic Income Earth Network (BIEN--best acronym ever). Here is their one-page summary of basic income: https://basicincome.org/basic-income/.

There is plenty on the USBIG website. This would be a good place to start, to develop a good understanding of UBI: https://usbig.net/about-big/.

Our Discussion Paper series has many conference papers on all aspects of basic income: https://usbig.net/discussion-papers/. We also have a news feed and a blog series, accessible on the homepage: https://usbig.net.”

The numbers

These numbers are updated every day, based on reported US Covid-19 deaths the day before (taken from the Worldometers.info site, where I’ve been getting my numbers all along). No other variables go into these numbers – they are all projections based on yesterday’s 7-day rate of increase in total Covid-19 deaths, which was 12%.

Note that the “accuracy” of the projected numbers diminishes greatly after 3-4 weeks. This is because, up until 3-4 weeks, deaths could in theory be predicted very accurately, if one knew the real number of cases. In other words, the people who are going to die in the next 3-4 weeks of Covid-19 are already sick with the disease, even though they may not know it yet. But this means that the trend in deaths should be some indicator of the level of infection 3-4 weeks previous.

However, once we get beyond 3-4 weeks, deaths become more and more dependent on policies and practices that are put in place – or removed, as is more the case nowadays - after today (as well as other factors like the widespread availability of an effective treatment, if not a real “cure”). Yet I still think there’s value in just trending out the current rate of increase in deaths, since it gives some indication of what will happen in the near term if there are no intervening changes.

However, it’s 100% certain that deaths won’t stop at the end of June! They might decline some more this summer, but Drs. Redfield (CDC head) and Fauci both predict there will be a new wave of the virus in the fall, and one noted study said there was a good probability the fall wave would be greater than the one we’re in now, as happened in the 1918 pandemic.

Week ending	Deaths reported during week/month	Avg. deaths per day during week/month	Deaths as percentage of previous month’s
March 7	18	3
March 14	38	5
March 21	244	35
March 28	1,928	275
Month of March	4,058	131
April 4	6,225	889
April 11	12,126	1,732
April 18	18,434	2,633
April 25	15,251	2,179
Month of April	59,812	1,994 (= 1 death every 44 seconds)	1,474%
May 2	13,183	1,883
May 9	12,592	1,799
May 16	10,073	1,439
May 23	11,225	1,604
May 30	12,623	1,803
Month of May	51,187	1,651 (= 1 death every 52 seconds)	86%
June 6	14,196	2,028
June 13	15,964	2,281
June 20	17,953	2,565
June 27	20,189	2,884
Month of June	74,696	2,490 (= 1 death every 35 seconds)	146%
Total March - June	189,753

Red = projected numbers

I. Total deaths

Total US deaths as of yesterday: 91,985

Increase in deaths since previous day: 1,005 (vs. 867 yesterday)

Percent increase in deaths since previous day: 1% (vs. 1% yesterday)

Yesterday’s 7-day rate of increase in total deaths: 12% (This number is used to project deaths in the table above. There is a 7-day cycle in deaths, caused by lack of reporting over the weekends from closed state offices. So this is the only reliable indicator of a trend in deaths, not the one-day percent increase.  Two days ago, this number was 13%).

II. Total reported cases

I no longer pay any attention to the reported case number. It is a huge underestimate of actual cases, which is at least 5-10 times what’s reported. This is because of the huge shortage of testing capacity. For reported cases to be anywhere near actual cases, we would need to be doing millions of tests a day. I believe the US has done fewer than 7 million tests since the start of the pandemic.

Total US reported cases: 1,550,539

Increase in reported cases since previous day: 25,445

Percent increase in reported cases since yesterday: 1%

Percent increase in reported cases since 7 days previous: 12%

III. Deaths as a percentage of closed cases so far in the US:

Total Recoveries in US as of yesterday: 356,383

Total Deaths as of yesterday: 91,985

Deaths so far as percentage of closed cases (=deaths + recoveries): 21% (vs. 21% yesterday) Let’s be clear. This means that, of all the coronavirus cases that have been closed so far in the US, 21% of them have resulted in death. Compare this with the comparable number from South Korea, which is below 3%. China’s is 6%. The reason this number is so high is that total reported recoveries are so low. I’ve been assuming since March 26, when the recoveries number was first published, that it would rise, so that this percentage (which was 41% on March 26), would be far lower than it is now. But it still has to drop a long way, in order for the US to have anything less than millions of death over the course of the pandemic – since we seem to have given up on controlling total cases in any meaningful way.

I would love to hear any comments or questions you have on this post. Drop me an email at tom@tomalrich.com