The COVID-19 hazard continues, but the hazard pay does not: Why America’s essential workers need a raise

Contents

• • Introduction
  • Part 1: Why workers deserve hazard pay
  • What is hazard pay?
  • Low-wage frontline workers deserve hazard pay
  • The pandemic recession makes hazard pay more urgent
  • Part 2: The state of hazard pay
  • Early ambitions and stalled progress for federal hazard pay
  • State and local governments fill the void with innovative hazard pay programs
  • Employers are ending hazard pay
  • Conclusions and recommendations

Introduction

The United States has entered a third peak of the COVID-19 pandemic, with cases spiking across the country. Many experts anticipate that the winter months will be the worst yet, and a new study projects that the U.S. could surpass 500,000 COVID-19 deaths by the end of February. As we begin this even deadlier phase of the pandemic, the country’s 50 million frontline essential workers are among the most vulnerable. Are they receiving fair compensation for the worsening hazards they face on the job?

In this report, we look at the state of hazard pay for COVID-19’s frontline essential workers. We follow up on the recommendations we made in our April report, which called on Congress to pass federally mandated hazard pay. At the beginning of the pandemic, the prospects of hazard pay were bright; in April, the House of Representatives passed legislation to create a $200 billion hazard pay fund, while dozens of large companies were offering small, temporary hourly pay bumps and bonuses to frontline workers.

Seven months later, those hopes have largely been dashed. While the hazards of COVID-19 are growing worse, few frontline essential workers are receiving any hazard pay at all. Most large retail employers ended temporary pay bumps months ago, despite many companies earning record sales, eye-popping profits, and soaring stock prices. After facing strong resistance in the Republican-controlled Senate, House Democrats dropped their hazard pay proposal from their revised legislation in September. Innovative hazard pay initiatives by state governments have been among the few bright spots, but the scale of these efforts is small compared to the need.

The failure of the federal government and most employers to provide hazard pay is especially detrimental to low-wage workers, who comprise nearly half of all frontline essential workers. As the pandemic-fueled recession deepens, many of these low-wage workers face additional financial hardship on top of elevated risks of infection. Nearly half of these low-wage frontline workers are nonwhite, with Black and Latino or Hispanic workers overrepresented among critical jobs that pay less than a living wage.

Deeply rooted policy failures and structural problems underpin these inequities—from a woefully inadequate minimum wage, to systemic racism, to the long-term erosion of worker power. Hazard pay is an immediate stopgap measure to ensure frontline workers earn a living wage as they shoulder extreme burdens. It’s a down payment on what should be permanent, lasting change through an increased minimum wage. Here’s how it can be done.

Part 1: Why workers deserve hazard pay

What is hazard pay?

The COVID-19 pandemic has upended traditional notions of what jobs are considered dangerous—and essential—as well as what workers who hold those jobs deserve to earn. Hazard pay is additional pay for performing hazardous duty or work involving physical hardship; previously, it was associated with dangerous jobs in military service, construction, or mining. Today, jobs as diverse as bus driving, warehouse jobs, and grocery work now expose employees to the deadly risks of COVID-19. Our colleagues Adie Tomer and Joseph W. Kane calculated that there are 50 million frontline workers who are in essential jobs and must physically report to work, making them vulnerable to COVID-19.

Hazard pay is a popular response to the risks that frontline essential workers face. In a May survey, more than three-quarters of Americans surveyed supported providing hazard pay or additional compensation to workers in essential jobs.

Hazard pay is also popular among frontline essential workers themselves. “I believe that people who have sucked up their fear every day and marched through that door, not knowing whether today would be the day they would catch it, deserve recompense for that,” said Lisa Harris, a 32-year-old cashier at a Kroger supermarket outside Richmond, Va.

Since the start of the pandemic, we spoke with dozens of frontline essential workers from a range of industries who expressed a strong desire for hazard pay while putting their lives on the line every shift. Many workers said they deserved hourly wage increases, and preferred predictable pay increases in each paycheck similar to overtime or holiday hours, rather than occasional bonuses that fail to compensate workers for each additional hour worked.

“It should be an hourly raise for the duration of the pandemic,” said one Walmart associate who preferred to remain anonymous, reflecting on the periodic bonuses Walmart workers receive. “Because for a lot of these people working out there, four or five days a week, eight hours a day, risking their lives so much given how the virus is spreading in the country, $2 to $3 extra an hour is a start. I don’t know if it is the answer, but it is a lot better than what we are getting now.”

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Low-wage frontline workers deserve hazard pay

The case for hazard pay is especially urgent for the millions of frontline essential workers who earn low wages. From certified nursing assistants to housekeepers to farm laborers, the essential jobs that are vital to the country and require workers to risks their lives are disproportionately low-paying. We calculate that, as of 2018, nearly half (47%) of all frontline essential workers earned less than a living wage that can sustain a family.

Daryll Cox, a poultry plant worker in Virginia, is one of the nearly 19 million frontline essential workers who earn less than $15 an hour. In an interview this summer, Cox, who is Black, discussed the hardships of his job during the pandemic.

“It’s been a challenge for everybody,” Cox said. “We work around 600 people a night in a packed environment. You just have to pray and believe and hope that the person that you’re working next to is not infected.” He said the “fear of not knowing” causes great anxiety, “wondering if the person working just inches away from you has it, being scared if somebody coughs or sneezes.”

Cox said he enjoys his job, but laments the low wages he earns. Workers at his plant typically make $12 to $14 an hour—considerably less than a living wage. After paying taxes and insurance, Cox said there is little left to pay bills and support a family. He said that even a small hazard pay increase would make a difference.

“We’re not making much,” Cox said. “If you add $2 to $3 an hour, you’d get at least $15. To be in this environment with all the money that we know the company makes, I don’t think it would set back the company at all to at least show us appreciation by giving us a $2 to $3 raise. This is the sentiments of at least 85% of other employees.”

Hazard pay is one way to immediately correct the financial injustice for frontline essential workers who risk their lives—and their families’ lives—without the dignity of wages that can support them. But it is ultimately a stopgap measure—essential workers’ low wages reflect long-standing policy failures and illustrate the need for permanent reforms.

For over a decade, the federal minimum wage has remained stuck at $7.25 per hour, a wage so low it would put workers earning it below the poverty line. Meanwhile, there is overwhelming public support to raise it to $15 per hour. Frontline workers earning paltry wages deserve permanent pay increases and lasting changes to these policy failures. In the interim, hazard pay can make an immediate difference in their lives during the pandemic.

Ten largest low-wage frontline essential jobs that pay less than $15 per hour, 2018

 Source: Brookings analysis of Department of Homeland Security, Bureau of Labor Statistics, and Emsi data

During our national reckoning over structural racism and inequality, hazard pay can also help address racial equity. Black and Latino or Hispanic workers are overrepresented among low-wage frontline essential workers. In 2018, Black workers comprised 13% of all U.S. workers, but made up 19% of all low-wage frontline essential workers. Latino or Hispanic workers comprised 16% of all U.S. workers, but 22% of low-wage frontline essential workers.

Millions of Black and Latino or Hispanic essential workers hold critical but undervalued jobs in caregiving and health care, cleaning, and other services, often earning poverty wages with few (if any) benefits. Hazard pay targeted to low-wage essential workers would disproportionately benefit workers of color, who too often are excluded from decent-paying work.

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The pandemic recession makes hazard pay more urgent

The COVID-19 recession has pummeled workers with the lowest wages, especially Black and Latino or Hispanic workers. Low-income workers have suffered the worst job losses in the pandemic. More than half (51%) of households earning under $50,000 have experienced employment loss during the pandemic. These job losses have further strained already limited household finances and increased food insecurity. In a recent survey, nearly half of low-wage workers reported having trouble paying bills and about a third had trouble paying their rent or mortgage.

This is the case for Yvette Beatty, a 60-year-old home health aide in Philadelphia, who is Black. Two of her children lost their jobs in the pandemic recession. One moved back in with her. Now, Beatty is the sole provider for her family of seven. Even though she is “scared as heck” working during the pandemic and fears bringing the virus back home to her family, she feels she has no choice but to keep working. But she is barely surviving on just $12.75 an hour.

“It’s very hard,” Beatty told us. “Thank God for noodles. We are eating just what we can right now.” Like a disproportionate share of low-income workers, Beatty has several underlying health conditions that put her at greater risk from COVID-19. Due to her financial struggles, her health has suffered during the pandemic. She said she sometimes skips a day of her medicine to stretch it further, and can’t afford to eat the healthy foods recommended for her diet. “I know I am supposed to eat certain things, but I would rather give to my family than to myself,” she said.

Beatty wishes the federal government would come to the aid of frontline workers like herself: “You’re telling me, before you pushed out trillions of dollars, you couldn’t push out money for us? You couldn’t push it out for these people who are on trash trucks, mopping floors, picking up biowaste, who are home health aides? Even for some of the nurses and doctors?…It’s time to wake up and recognize us.”

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Part 2: The state of hazard pay

Early ambitions and stalled progress for federal hazard pay

In Congress, Democratic and Republican proposals for federal hazard pay started ambitious, but languished in the Republican-controlled Senate, with little prospect of being passed into law.

In April, Democrats in Congress proposed hazard pay legislation to provide generous compensation to essential workers across the public and private sectors. This $200 billion “Heroes Fund” was part of the original $3 trillion “HEROES Act” passed by the House on May 15. Through the fund, eligible workers would receive up to $25,000 in “pandemic premium pay” through the federal government—equivalent to an extra $13 per hour—from the start of the public health emergency until the end of the year. The eligibility requirements of the fund were expansive, including even highly paid essential workers such as doctors. Essential workers earning up to $200,000 a year (or approximately $100 per hour) would be eligible for the full amount of up to $25,000, while workers earning over $200,000 would be eligible for a smaller amount of $5,000.

In May, Senator Mitt Romney (R-Utah) proposed a narrower “Patriot Pay” proposal for a temporary bonus of up to $12 per hour. Compared to the Democrats’ proposal, Sen. Romney’s proposal included a lower income cap (annual incomes up to $50,000 could receive the full amount and incomes up to $90,000 would receive a smaller amount), a shorter timeline (May 1 through July 31), and only some of the money (three-quarters) coming from the government and the rest from employers. Sen. Romney explained that the legislation would address the risks that frontline essential workers face as well as the “anomaly” of some essential workers earning less money than unemployed workers receiving enhanced unemployment benefits.

Many Republicans in Congress expressed little interest in either hazard pay proposal, and neither has been passed into law. After House Democrats passed their $3 trillion HEROES Act, Senate Republicans introduced a smaller, $1 trillion HEALS Act in July. That bill did not include any hazard pay for essential workers. It also excluded new state and local aid, which would shore up struggling state and local government budgets with the funds necessary to keep public sector frontline essential workers employed. The result was dimmed prospects for any federal hazard pay. On September 28, House Democrats introduced an updated, leaner version of the HEROES Act which did not include the original Heroes Fund for hazard pay for essential workers.

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State and local governments fill the void with innovative hazard pay programs

While hazard pay from the federal government has stalled, several state governments have leveraged federal relief funds to introduce innovative hazard pay programs. Most of these state-level programs have a strong equity focus and prioritize frontline workers who earn low and moderate wages. While their approaches are promising and can serve as a model for national scale, the reach of the state programs is relatively modest compared to the need. A typical state-level hazard pay program benefits tens of thousands of workers out of a total of 50 million frontline essential workers nationwide.

Three states—Pennsylvania, Vermont, and Louisiana—leveraged federal CARES Act relief funding to finance hazard pay for a broad swath of essential frontline workers in their states, including both private and public sector workers. All three states leveraged $50 million in federal CARES Act funding to finance the pay increases.

Pennsylvania’s COVID-19 PA Hazard Pay Grant Program is an especially promising model. To date, the grant funds provided more than 40,000 frontline workers with the equivalent of a 10-week, $3 per hour raise. Eligibility was limited to workers earning less than $20 an hour in essential industries. The $50 million program was only able to meet about 10% of the needs of the applicants, so it applied a strong equity lens to focus the limited funds on the greatest need. The program prioritized workers that are the lowest-paid, face the highest COVID-19 risks, and have the least opportunity for other federal support. Home health aides, nursing home workers, and other care providers were among the biggest beneficiaries. Pennsylvania Governor Tom Wolf recently called on state legislators to provide additional funding from the state’s federal relief money to expand the program. (Gov. Wolf has also advocated unsuccessfully for the state legislature to raise Pennsylvania’s minimum wage from the current $7.25 per hour.)

Several other states leveraged federal relief dollars to provide hazard pay to a narrower set of frontline essential workers in public-sector-funded industries such as first responders, home health aides, and caregivers.

The hazard pay that Virginia, New Hampshire, and Michigan state governments are providing caregivers resonates with recommendations we made in our May report, which called for hazard pay, higher pay, better safety, and benefits for low-wage health workers.

In that report, Yolanda Ross, a 53-year-old home health aide outside of Richmond, Va., said that low-wage caregivers like her are “underpaid, overlooked and forgotten about, but yet depended upon.” She was hopeful that the pandemic would present a moment for change. “I pray there is a redirection,” Ross said. “That we stop doing things the same old way and listen to those who don’t have real voice.”

After Virginia Governor Ralph Northam announced on October 15 a one-time $1,500 hazard pay for home health workers serving Medicaid members, Ross expressed gratitude: “I am so thankful we’re starting to get some of what’s due.”

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Employers are ending hazard pay

Due to the increased risk of COVID-19 exposure they face on the job, retail workers are among the frontline essential workers most likely to have received hazard pay at some point during the pandemic. Early in the pandemic, some of the country’s largest grocery, home improvement, big-box retail, and e-commerce companies offered frontline essential workers modest hazard pay. Going by names like “hero pay” and “appreciation pay,” the policies were typically either a pay increase of about $2 per hour or one-off and occasional bonuses. These small pay increases helped employers recruit more frontline workers to keep up with the demand of stockpiling Americans and surging online orders.

While modest, the hazard pay made a difference to frontline retail workers, whose pay is very low. Only four large retail companies—Costco, Amazon, and recently, Target and Best Buy—offer workers starting wages of $15 per hour. Typical grocery cashiers earn about $10 per hour. Grocery workers at Kroger, the nation’s largest grocery chain, can earn as little as $9 per hour or less.

Lisa Harris, a Kroger cashier outside of Richmond, Va., lamented these low wages for frontline staff. “The pay isn’t enough,” Harris said in a March interview. “I have coworkers that serve people every day, and then have to go pay for their own groceries with food stamps.”

Three months into the pandemic, most retail companies quietly ended hazard pay hourly increases, in some cases shifting to a one-time “thank you” bonus. As nonessential businesses began to reopen in the summer, employers signaled that business—and workers’ paychecks—were returning to “normal.” Walmart, Amazon, and Kroger—the country’s largest employer, largest online retailer, and largest grocer, respectively—all ended hazard pay during the summer. Among large retail companies, Home Depot is the only company to continuing to regularly pay its frontline workers hazard pay. On average, workers at the top 20 retail companies have gone 126 days without hazard pay.

Most retail companies ended hazard pay early in the summer, and since then, the pandemic has worsened but business has boomed. Large home improvement stores, discount retailers, supermarkets, electronics stores, big-box retailers, and e-commerce giants have seen eye-popping profits and soaring sales. Profits at the top 10 largest retail companies were up more than 50% in the first half of the year compared to last year.

Frontline retail workers we interviewed expressed disappointment and dismay at their employers’ decisions to end hazard pay despite financial success and the continued risk of COVID-19.

“It’s a bunch of B.S., to be totally honest,” said Jeffrey Reid, a meat clerk at a Giant Food outside of Washington, D.C. In June, Reid’s employer ended its 10% hourly “recognition pay.” “All of a sudden, we went from being essential to being sacrificial, all for the sake of the bottom line,” said Reid. “It is still a pandemic, the last time I checked. There is a still a hazard out there.”

“To some people, $2 an hour doesn’t seem like a lot,” said another front-end grocery employee who preferred not to be identified. “But the extra $2 makes a huge difference for people and their livelihoods. It’s something I can’t comprehend, why they think we’re not worth more. Profits are up big time. I don’t understand why they think it’s okay for people to struggle.”

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Conclusions and recommendations

The extreme and unequal sacrifices shouldered by low-wage frontline workers require policy solutions such as federal hazard pay during the pandemic and a higher minimum wage so that workers permanently earn a living wage. And even without policy change, America’s biggest companies shouldn’t wait to give their employees economic security. Below are three recommendations for the public and private sector:

1. Congress should focus federal dollars on modest hazard pay for the low-wage workers who need it most. As Congress negotiates the next federal relief bill, lawmakers should include federal funding for hazard pay targeted to the low-wage workers who need it most for the duration of the pandemic. Pennsylvania’s hazard pay program provides a compelling model to scale at the national level. While House Democrats’ original “Heroes Fund” proposal for federal hazard pay included generous compensation to even highly paid workers, Pennsylvania’s program had a strong equity focus and prioritized workers at greatest risk of COVID-19 and earning the lowest wages. Compensation was more modest, at the equivalent of $3 per hour (instead of $13), and income was capped at modest wages ($20 per hour), making Pennsylvania’s program far less costly. Congress could make federal funds available to states to implement hazard pay, with room for states to determine some of the eligibility criteria and wage thresholds. Or it could be run centrally out of the Treasury Department, like the original Heroes Fund proposal.
2. Profitable companies should reinstate hazard pay and permanently raise wages to $15 per hour. Hazard pay is one way that employers can—and should—immediately recognize the value of frontline workers in the pandemic. But it is only a temporary measure, and won’t achieve long-term economic stability and living wages for these workers. Large, profitable companies should not wait for legislation that compels them to raise wages. Even in the absence of meaningful government action, more companies should follow the example of Target, Costco, Amazon, and Best Buy and raise starting wages to $15 per hour.
3. Workers need bolder policy changes, during the pandemic and long after. Hazard pay is a stopgap measure to recognize the sacrifices of the pandemic’s frontline workers and meet their immediate needs. It does not solve the policy failures and structural racism that underpin the financial struggles of these workers, who are disproportionately Black and Latino or Hispanic. Bolder policy changes such as raising the minimum wage are needed, alongside hazard pay, to have a more lasting impact. Polls show broad support for raising the minimum wage, and that support has increased during the pandemic. Critics have raised concerns about the costs of increasing the minimum wage to small businesses at a time when many are struggling to survive. But even if legislative change happens, it is likely that wage increases will be phased in over time. Hazard pay can help meet need in the near term, serving as a down payment on permanent pay increases for the 19 million frontline essential workers who earn less than $15 an hour.

Even beyond COVID-19, low-wage workers deserve to earn wages that meet their basic needs. The pandemic has laid bare the wide gap between the low wages that frontline workers earn and the essential value they bring to society. Now, in a pandemic that has already claimed over 200,0000 American lives, it is a moral outrage that low-wage essential workers are risking their lives—and their families’ lives—for wages that do not even provide them the basic dignity of a family-sustaining wage.

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