U.S. Representative Pramila Jayapal (WA-07), Co-Chair of the Congressional Progressive Caucus, introduced H.R. 6918, the Paycheck Recovery Act today as a policy solution that delivers working people immediate relief and certainty while matching the scale of the current public health and economic crisis. The Paycheck Recovery Act ends mass unemployment, keeps workers connected to their paychecks, returns millions of workers who have been laid off or furloughed since March 1 back to payroll and health care and prevents employers of all sizes from being forced to close permanently. H.R. 6918 is co-sponsored by 93 members of Congress from across the ideological spectrum, including many Frontline Members. Text of the legislation is available here. A white paper is also available here.
"Mass unemployment is a policy choice, and we must choose differently by passing an urgent proposal that matches the scale of this crisis while delivering certainty and direct relief to workers, businesses of all sizes and the economy," said Congresswoman Jayapal. "The Paycheck Recovery Act will end mass unemployment, put workers back on their paychecks and health care and keep businesses from closing permanently while ensuring workers aren't forced to return to work before it is safe to do so."
At a time when the unemployment rate is at its highest level since the Great Depression and more than 37 million workers have lost their jobs during Covid-19, the Paycheck Recovery Act would deliver certainty and stability by covering the full wages of workers earning salaries up to $90,000 and ensuring employers can rehire those laid-off or furloughed since March 1. It does this in a quick and direct manner by utilizing existing payroll tax infrastructure instead of relationships with banks and lending institutions.
The Paycheck Recovery Act is not just an economic recovery plan; it's a public health plan too. At a time when at least 27 million people have lost their health care and 87 million are uninsured or underinsured, this legislation returns individuals to their employer-sponsored benefits, including health care.
As more than 100,000 small businesses have already closed permanently and thousands of others are unable to pay their essential expenses, H.R. 6918 covers a portion of operating costs such as rent to ensure businesses can re-open when the pandemic ends. It does this without picking winners and losers, covering businesses of all sizes including non-profits and state and local governments.
The Paycheck Recovery Act is estimated to cover more than 36 million workers and cost less than what has already been spent on two rounds of Paycheck Protection Program loans, which have failed to successfully stabilize unemployment. Proven to be a highly effective program in other parts of the world--from European countries like Germany and Denmark to Asian countries like Singapore and South Korea--direct grants to businesses to keep workers on payroll is overwhelmingly supported by the public. A recent Data for Progress and Tufts University poll found 79% of those surveyed supported the proposal.
While H.R. 6918 is co-sponsored by nearly 100 members of Congress, the idea for a paycheck guarantee also has bipartisan, bicameral support. Senators Bernie Sanders (I-Vt.), Mark Warner (D-Va.), Doug Jones (D-Ala.) and Richard Blumenthal (D-Conn.) have unveiled a similar proposal--the Paycheck Security Act--to cover the wages and benefits of employees at businesses and nonprofits affected by Covid-19. Additionally, the proposal has been endorsed by Nobel-Prize winning economists, former Federal Reserve Chairs and vice presidents, labor leaders, business owners and major national groups across the country.
"We must act to ensure that millions more workers are paid for as long as this crisis endures by making support for employers who keep workers on payroll simpler, faster and more universal," said AFL-CIO President Richard Trumka. "The Paycheck Recovery Act does just that."
"A bold and workable solution that addresses the true severity, scope and potential duration of the financial crisis that small business owners and their employees are facing," said Main Street Alliance Executive Director Amanda Ballantyne. "It is exactly the type of policy that will secure our small business economy and keep millions of workers in their jobs and homes until the threat of the virus has passed."
"This type of bill is vital to ensuring that the economy is ready to restart when the pandemic ends by protecting the health, safety and long-term economic well-being of working people across America," said SEIU President Mary Kay Henry.
"The Paycheck Recovery Act is critically needed to avoid job losses and support businesses of all sizes as Covid-19 continues to ravage the economy," said Chief Economist of Moody's Analytics Mark Zandi.
"Congresswoman Jayapal's proposal would definitely be a shot in the arm not just for myself but for so many of the millions of small business owners around the country," said Melba Wilson, the owner of a third-generation family-owned restaurant in Harlem, N.Y.
"Helping businesses to keep paying their workers is the most effective way to stop millions of Americans from being laid off and protect access to health care at a time when it is especially needed," said Nobel Prize Winning Economist Joseph Stiglitz.
"Representative Jayapal's Paycheck Recovery Act is a smart, quick and effective way to channel aid to workers through their firms," said Former Chair of the Federal Reserve Janet Yellen. "It can keep businesses, large and small, from shuttering and their workers on the payroll."
"Congresswoman Jayapal's Paycheck Recovery Act is another step forward in this fight because it would provide much-needed relief by helping employers keep workers paid and out of the unemployment line and by keeping workers enrolled in employer-sponsored benefits, including health care -- something that's paramount during a global pandemic," said NEA President Lily Eskelsen Garcia.
"The Paycheck Recovery Act is the type of bold legislation that deserves support because it could have a major impact on reducing the number of jobs lost permanently--including small business and union jobs--while including provisions to ensure that aid is not misused to unjustly enrich companies," said Former Director of the National Economic Council and National Economic Advisor Gene Sperling.
"This urgently needed legislation will help ensure that America's workforce and businesses remain intact, said IAM President Robert Martinez, Jr. "It would end the current wave of mass layoffs, bring previously displaced workers back onto their employers' payroll, prevent employers from being forced to permanently close their doors, and keep workers connected to their employer-sponsored health care."
"It's clear that Congress needs to do more to stop the economic devastation we are facing as we combat this pandemic," said Former Chief Economist at the U.S. Department of Labor Heidi Shierholz. "Rep. Jayapal's bold proposal will keep workers paid, eligible for benefits, and connected to their employers."
"This is the best economic policy, but it's also going to save lives and help our medical professionals because the vast majority of Americans will have the means to stay healthy and be helpful," said Association of Flight Attendants-CWA, AFL-CIO President Sara Nelson.
"Millions of Americans have lost their jobs," said Former Secretary of the U.S. Department of Labor Robert Reich. "They need help immediately. The Paycheck Recovery Act is the fastest and most efficient way of getting it to them."
"During the last recession, unemployment and under-employment hit Black and brown communities the hardest, and the scale of our current unemployment crisis will deepen our racial wealth gap," said Center For Popular Democracy Co-Executive Director Jennifer Epps-Addison. "Keeping working people on payroll at their employers is the best way to allow working people to minimize the economic dislocation that is compounding our public health crisis."
"The payroll guarantee idea is a big policy intervention that solves several problems at once--a vast improvement over the PPP," said Former Vice Chairman of the Federal Reserve Alan S. Blinder.
"The government is shutting down businesses. It should cover workers' paychecks and benefits. It's that simple," said Progressive Caucus Action Fund Executive Director Liz Watson. "Rep. Jayapal's Paycheck Recovery Act would do exactly that."
Today's legislation is co-sponsored by U.S. Representatives Haley Stevens, Adam Schiff, Sean Casten, Katie Porter, Mark Pocan, Veronica Escobar, Alma S. Adams, Ph.D., Nanette Diaz Barragan, Karen Bass, Joyce Beatty, Donald S. Beyer Jr., Earl Blumenauer, Lisa Blunt Rochester, Suzanne Bonamici, Brendan Boyle, Julia Brownley, G.K. Butterfield, Joaquin Castro, Andre Carson, Judy Chu, David N. Cicilline, Katherine Clark, Yvette D. Clarke, Emanuel Cleaver, II, James E. Clyburn, Steve Cohen, Gerald E. Connolly, Peter DeFazio, Rosa DeLauro, Debbie Dingell, Adriano Espaillat, Dwight Evans, Marcia L. Fudge, Ruben Gallego, Jesus G. "Chuy" Garcia, Sylvia R. Garcia, Vicente Gonzalez, Raul M. Grijalva, Deb Haaland, Alcee L. Hastings, Jahana Hayes, Denny Heck, Steven Horsford, Sheila Jackson Lee, Hakeem Jeffries, Henry C. "Hank" Johnson Jr., Joseph P. Kennedy, III, Ro Khanna, Ann Kirkpatrick, John B. Larson, Barbara Lee, Susie Lee, Andy Levin, Mike Levin, Ted W. Lieu, Alan Lowenthal, Tom Malinowski, Carolyn B. Maloney, James P. McGovern, Grace Meng, Joseph D. Morelle, Jerrold Nadler, Grace F. Napolitano, Joe Neguse, Eleanor Holmes Norton, Alexandria Ocasio-Cortez, Ilhan Omar, Frank Pallone, Jr., Chellie Pingree, Ayanna Pressley, Jamie Raskin, Cedric L. Richmond, Lucille Roybal-Allard, Bobby L. Rush, Tim, Ryan, John Sarbanes, Mary Gay Scanlon, Jan Schakowsky, Kim Schrier M.D., Jose E. Serrano, Donna Shalala, Mikie Sherrill, Adam Smith, Darren Soto, Jackie Speier, Thomas R. Suozzi, Rashida Tlaib, Lori Trahan, Juan Vargas, Filemon Vela, Nydia M. Velazquez, Bonnie Watson Coleman and Peter Welch.
Groups supporting the Paycheck Recovery Act include Americans for Financial Reform; the American Federation of Teachers; AFL-CIO President Richard Trumka; Asian Counseling and Referral Service; Asian Pacific Islander Coalition of Washington; Association of Flight Attendants-CWA, AFL-CIO; CAIR Washington; Center for American Progress; Center for Economic Policy Research; Center for Popular Democracy/CDP Action; Climate Justice Alliance; Color of Change; Communications Workers of America; Community Change Action; the Congressional Hispanic Caucus; Duwamish River Cleanup Coalition; Economic Policy Institute; GSBA: Washington's LGBTQ Chamber; Indivisible; International Association of Machinists; International Association of Machinists and Aerospace Workers; International Community Health Services; Main Street Alliance; MoveOn; National Domestic Workers Alliance; National Education Association; Pacific Northwest Ballet; People's Action; Seattle Aquarium; Seattle Children's Theatre; SEIU; Sierra Club; UAW Western States; UNITE HERE; Woodland Park Zoo; 350 Seattle; and other organizations.
