An employee at work in the meat department of a Florida supermarket. Such workers are considered essential and are taking risks during the pandemic but are not highly paid. Joe Raedle/Getty Images

Who should pay for hazard pay?

Kristin Schwab Jul 24, 2020
An employee at work in the meat department of a Florida supermarket. Such workers are considered essential and are taking risks during the pandemic but are not highly paid. Joe Raedle/Getty Images

Sixteen dollars an hour — that’s how much Rashad Lloyd was making at Total Wine & More in Virginia in March. Now, he’s making $14 because his hazard pay expired in April. And he feels pretty stuck. It’s not like there are a lot of other jobs out there.

“There’s absolutely no alternative right now, and a lot of these companies understand that there’s no alternative,” he said.

Back in March, when stay-at-home orders began, a bunch of businesses were giving essential workers hazard pay, typically a $2-an-hour boost. Now, even though the pandemic is surging in much of the country, hazard pay has mostly disappeared.

That’s partly because at the beginning of the pandemic, companies were worried employees wouldn’t show up to work.

“The power dynamics have changed,” said Erin Hatton, a professor of labor sociology at the State University of New York, Buffalo. “Employers are more easily finding workers, so they’re decreasing incentives to bring workers into the workplace.”

Companies also feel like they don’t have to pay extra because stay-at-home orders have lifted. And aside from big companies like Amazon and Kroger, a lot of businesses can’t afford to give hazard pay forever.

“Business owners need to be supported by governments. I mean, this cannot be an employer enterprise,” Hatton said.

Now, states are stepping in. This week, Pennsylvania established a grant program for businesses to offer bonuses for workers in healthcare, transit, food manufacturing and food retailing.

That’s one way governments could support essential workers. They could also offer companies incentives, like tax breaks. Or mandate that companies pay up, though that means businesses that are already struggling would continue to foot the bill.

A government mandate would also do something else: create rules and guidelines around hazard pay.

Before the pandemic, most people would never have called a grocery store worker’s job dangerous. And now that we’ve reopened much of the economy, with the virus still a threat, many would argue hairstylists and restaurant servers are doing dangerous work, too, said Nicole Hallett, a professor of labor law at the University of Chicago. 

“The definition of what we considered to be hazardous work, what is hazardous work, has changed.”

COVID-19 Economy FAQs

What does the unemployment picture look like?

It depends on where you live. The national unemployment rate has fallen from nearly 15% in April down to 8.4% percent last month. That number, however, masks some big differences in how states are recovering from the huge job losses resulting from the pandemic. Nevada, Hawaii, California and New York have unemployment rates ranging from 11% to more than 13%. Unemployment rates in Idaho, Nebraska, South Dakota and Vermont have now fallen below 5%.

Will it work to fine people who refuse to wear a mask?

Travelers in the New York City transit system are subject to $50 fines for not wearing masks. It’s one of many jurisdictions imposing financial penalties: It’s $220 in Singapore, $130 in the United Kingdom and a whopping $400 in Glendale, California. And losses loom larger than gains, behavioral scientists say. So that principle suggests that for policymakers trying to nudge people’s public behavior, it may be better to take away than to give.

How are restaurants recovering?

Nearly 100,000 restaurants are closed either permanently or for the long term — nearly 1 in 6, according to a new survey by the National Restaurant Association. Almost 4.5 million jobs still haven’t come back. Some restaurants have been able to get by on innovation, focusing on delivery, selling meal or cocktail kits, dining outside — though that option that will disappear in northern states as temperatures fall. But however you slice it, one analyst said, the United States will end the year with fewer restaurants than it began with. And it’s the larger chains that are more likely to survive.

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