COVID-19 Is Changing The Labor Market. Tax Policy Must Change Along With It.

COVID-19 Is Changing The Labor Market. Tax Policy Must Change Along With It.

The coronavirus recession has dealt a devastating blow to millions of US workers, with consequences that could persist for years.  As the public hea

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The coronavirus recession has dealt a devastating blow to millions of US workers, with consequences that could persist for years.  As the public health crisis drags on, for many people temporary furloughs and reductions in hours are turning into permanent job losses and pay cuts that disproportionately affect low-wage workers.

Increasing income support through the tax code can ensure that low-wage workers are not left behind once the economy regains its footing and temporary relief programs end.

How are workers being affected by the COVID recession?

Thirty percent of all workers who were employed in February were out of work for part or all of March, April, and May. Women, workers with less than a bachelor’s degree, and Black and Hispanic workers experienced the highest levels of non-employment, and those categories of workers have experienced relatively slower recoveries.

Since an initial collapse, hours worked at small businesses have largely recovered but reached a plateau, with most lost hours attributable to closures or layoffs. And the longer the recession lasts, the more likely that layoffs initially recorded as temporary in survey data will become permanent. A University of Chicago study estimated that at least a third of pandemic-induced layoffs will be permanent, and in September, the number of permanent layoffs reached 3.8 million.

The overall jobs recovery has slowed…



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