Topic Category: COVID-19

Tax Break on PPP Loan Expenses Will Cost New Jersey More Than $1 Billion

Posted on by Sheila Reynertson

In an unexpected windfall, New Jersey businesses that received federal grants through the Paycheck Protection Program (PPP) can now exempt the forgiven loan from state taxation and claim a deduction on expenses paid by the loan.

This unprecedented move would allow companies to receive a tax cut on both sides of the ledger – one for receiving the money, and another for spending it – costing New Jersey up to $688 million in lost personal income tax (PIT) revenue[1] and at least another $560 million in lost corporate business tax (CBT) revenue.[2] Of note and concern is the fact that this tax break is likely to disproportionately benefit white-owned businesses given the inequitable distribution of the original loans and difficulty that Black-owned businesses had in accessing the program.[3] Based on a sampling of PPP loans, more than 80 percent have been granted to white-owned businesses.[4] Black-owned businesses received less than 2 percent of the loans while 6.6 percent went to Hispanic-owned businesses, according to the Center on Public Integrity.

In light of the moral obligation to fund an equitable pandemic recovery, despite foreseeable revenue shortfalls in the not-so-distant future, lawmakers giving the green light to a $1.2 billion double tax cut on loan forgiveness raises serious concerns about the state’s ability to support other, potentially more urgent, needs.

Background

Last year, Congress created the Paycheck Protection Program, a large loan assistance program designed to help businesses and stabilize local communities during the COVID-19 crisis. So long as the loans were used for allowable business expenses like payroll and rent, the loan would be forgiven and converted to a grant.

Since expenses paid with PPP loans are exempt from taxation, the Internal Revenue Code (IRC) directed that they could not be deducted in calculating taxable income. In other words, PPP loan forgiveness was to be treated as tax neutral, which is standard practice.

Then, just days before the calendar year came to a close, federal legislation reversed that directive, granting businesses both tax exemption and deductibility of expenses covered by their PPP loans. This change turned PPP loan forgiveness into a net tax benefit. So, in addition to having wages reimbursed through forgiveness of the loan that paid for them, PPP recipients are now set to get a federal tax cut.

New Jersey plans to offer the same tax cut, even though it is under no obligation to do so. And the cost is staggering — more costly to New Jersey coffers than other tax breaks in the CARES Act and a larger amount than the projected revenue from the newly passed “millionaires tax” — because of how many PPP loans have been granted.

Conformity Matters

New Jersey businesses pay state taxes either through the corporate business tax code or the personal income tax code, depending on how they are incorporated. Each code regards the IRC differently.

The state’s personal income tax code does not use IRC as a starting point, and its treatment of loan forgiveness is already tax neutral. In other words, the forgiven loan is taxable, but the expenses associated with the loan can be deducted. A recent announcement by Governor Murphy changes this. Pass-through businesses with a forgiven PPP loan on the books can now avoid gross income taxation of the forgiven loan and be allowed to deduct associated payroll and other expenses as normal business expenses.

The state’s corporate business tax code already uses the IRC as a starting point, meaning the new federal treatment of PPP loan forgiveness will be automatically replicated at the state level. By choosing not to decouple from the IRC, New Jersey is on track to lose at least $560 million in revenue, based on the $6.9 billion in PPP loans granted to corporations in 2020.

The last-minute, bipartisan change at the federal level turned a tax-neutral program designed to protect jobs into a tax cut for businesses that received federal aid. But let’s be clear: that policy change does not mean that these businesses are entitled to receive an additional tax break here in New Jersey. The state has to affirmatively choose to do so, which it has, thus weakening its ability to fund other needs central to pandemic recovery. Worse yet, thanks to the racial inequities of PPP disbursement, it will inherently exacerbate disparities among businesses ravaged by the economic downturn.

End Notes

[1] Legislative Fiscal Estimate on S3234, December 28, 2020. https://www.njleg.state.nj.us/2020/Bills/S3500/3234_E2.PDF

[2] Based on $6.9 billion in PPP loans granted to NJ corporations in 2020.

[3] Boston Business Journal, PPP data shows Black-owned businesses received fewer loans, despite efforts, December 29, 2020. https://www.bizjournals.com/boston/news/2020/12/29/updated-ppp-data-shows-black-owned-businesses.html

[4] The Center on Public Integrity, Small Businesses Loan Data Includes Little About Race, July 2020. https://publicintegrity.org/health/coronavirus-and-inequality/small-business-loan-data-includes-little-on-owners-race-paycheck-protection-program/

Parents are Essential Too: Supporting Working Families During the Pandemic

Posted on by Vineeta Kapahi

The wellbeing of New Jersey’s children and working parents — as well as the state’s recovery from COVID-19 — depends on families being able to balance work and caregiving. Even before the onset of pandemic, many New Jersey families struggled with this balancing act. Now, the current crisis has created untenable conditions for many families who face the additional pressures of unstable and unpredictable employment, schooling, and childcare.

Although lawmakers enacted several state and federal policies to support working families during the pandemic, many of these programs are neither universal nor permanent. As a result of underinvestment and piecemeal policymaking, many workers continue to face barriers to paid leave, job protections, adequate wages, quality and affordable childcare, and work stability and flexibility. This report examines the circumstances of New Jersey’s working parents, assesses the strengths and shortcomings of existing policies, and identifies solutions to improve conditions for parents, children, and employers.

Households with Children Face Disproportionate Barriers to Economic Security

New Jersey families with children faced disproportionately large economic challenges both before and during COVID-19, including poverty and the loss of employment and income. Prior to the pandemic, families with children under 18 were already more likely to live below the federal poverty level than families without children.[i] In 2019, approximately one in ten families with children in New Jersey lived in poverty.[ii] Now, almost a year into the pandemic, working families are falling further behind. Households with children are twice as likely (19 percent) to report that it was very difficult to cover usual expenses during the last seven days as households without children (9 percent), according to the most recent U.S. Census Bureau Household Pulse Survey (conducted between November 11 -23, 2020).[iii] In addition, while COVID-19 has caused unprecedented economic disruptions across the state, households with children in New Jersey were 23 percent more likely to report experiencing loss of employment income since the beginning of the state’s stay-at-home order in mid-March than families without children.[iv]

Low-Income, Black, and Latinx Workers are Least Likely to Work from Home

The ability to work from home has enabled many parents to practice social distancing while continuing to work during the pandemic. Not all employees, however, are able to telework. One key factor that influences whether an employee is able to work from home is occupational segregation. Because employment opportunities are shaped by systemic barriers to education and discrimination in hiring and promotion, ability to work from home varies by race and income.

Prior to the onset of COVID-19, only one in three workers was able to work from home. While approximately one in three Asian and white workers were able to telework, only one in five black workers and one in six Latinx workers were able to telework. In addition, high wage workers were six times as likely to be able to work from home as low wage workers.[v]

Racial and income disparities in teleworking that existed prior to the onset of the pandemic have been compounded during the current crisis, according to a survey that asked if any adults in a household substituted any work that was typically conducted in person with telework since mid-March. While over half (58 percent) of Asian respondents and nearly half (47 percent) of white respondents substituted some or all of their typical in-person work with telework, only one-third of Black (36 percent) and Latinx (30 percent) respondents transitioned to telework.[vi]

The ability to work from the safety of home during COVID-19 is most often afforded to workers who are the highest paid.[vii] At least one adult was able to transition to remote work during the pandemic in 79 percent of households earning over $200,000 per year and in 55 percent of households earning between $100,000 to $149,999 per year. In general, households with the lowest incomes are least likely to have transitioned to some or all telework due to COVID-19. Fewer than a quarter of households earning less than $50,000 per year had at least one adult who moved some or all their work to telework due to the pandemic. Accordingly, the households least able to bear the additional costs of childcare resulting from the COVID-19 pandemic are often those who need it most.

COVID-19 Intensifies Childcare Challenges

While the inadequacies and inequities in New Jersey’s childcare infrastructure did not begin with the COVID-19 pandemic, the current crisis has exacerbated and complicated childcare challenges. Approximately one-third (266) of New Jersey’s school districts began the 2020 school year with plans for all remote-learning, approximately half (395) had plans for hybrid models, and less than 10 percent (75) had plans for in-person learning.[viii] In addition, families have had to navigate diverse and changing conditions among childcare providers and schools in New Jersey. Because of the constantly evolving nature of the ongoing public health emergency, facility closures often come with little or no advanced notice, leaving families scrambling to plan childcare. Even among parents who can telework, many now face the dual responsibility of working while providing childcare or overseeing remote learning due to a loss of childcare or shift to online learning. For families with children that require ongoing supervision, juggling work and childcare duties simultaneously is an impossible task.

Before the onset of COVID-19, childcare was already a challenge for many working families. Most children (73 percent) in New Jersey live in households where all parents work.[ix] For single parents, the majority of whom are women, the difficulties of managing childcare and work are especially acute. The vast majority of single parents work – 90 percent of single fathers and 84 percent of single mothers.[x]

New Jersey is home to nearly 600,000 young children and infants, as well as 1.3 million school aged children and teens (between the ages of 6 and 17).[xi] In 2019, almost half (46 percent) of children under the age of six in New Jersey lived in a childcare desert, or a place where the number of children is more than three times the licensed childcare capacity.[xii] In addition to inadequate and inequitable childcare availability, childcare is not affordable for many low- and moderate-income families. New Jersey ranks as the fifteenth most expensive state in the country for childcare costs. The average cost for one year of care for a four-year-old in New Jersey is $10,855. Infant care is even more costly for New Jersey’s families, with an average annual cost of $12,988 per year.[xiii]

Insufficient affordable and quality childcare not only harms children, but also pushes parents – especially mothers – out of the workforce. Accordingly, lack of access to childcare is not only a problem for families with children, as it also hurts employers and New Jersey’s broader economy. Over 300,000 adults in New Jersey reported that they could not work because they had to care for children not in school or daycare in November 2020, according to the Census Bureau’s Household Pulse Survey.[xiv]  Similarly, in a poll of over 900 parents of infants and toddlers in New Jersey, 14 percent of parents reported that they left their jobs to manage childcare and 17 percent reported that they were forced to reduce their work hours.[xv]

Surveys of New Jersey residents suggest that the current crisis has had a particularly large toll on working mothers, low-income parents, and Black and Latinx parents. Among parents of children under the age of three in New Jersey, women (19 percent) were six times more likely to report that they had left their jobs to manage childcare since the onset of COVID-19 than men (three percent).[xvi] In an October 2020 poll of parents with children in New Jersey public schools, low-income Black and Latinx parents were 1.5 times more likely than parents overall to either take time off from work or leave their job to stay at home when their child is not in school (22 percent vs. 14 percent).[xvii]

State lawmakers have taken some steps to improve access to and stabilize childcare during COVID-19, but more must be done. For example, the New Jersey School-Age Tuition Assistance Program provides financial support for care for school-aged children engaged in remote learning due to COVID-19. To participate in this program, families must have a gross household income less than $150,000 per year. In addition, the childcare provider must be licensed or registered, which excludes families who rely on care from a relative.[xviii] While this program has been helpful for many households with school-aged children, it is temporary – the program is scheduled to expire on December 30th, 2020.

As COVID-19 infection rates remain high, uncertainty and fluctuation around school and daycare statuses is likely to continue to pose a significant challenge. [xix] In addition to extending and expanding programs that increase childcare affordability, a greater commitment of public resources is needed to create lasting, meaningful reform in the state’s childcare system to promote childcare availability and quality for all families. With structural improvements and adequate and equitable investments, the state can build a stronger childcare system that better supports the wellbeing of New Jersey’s children and working families as well as the state’s recovery from the current crisis.

Federal Expanded Leave Programs Lack Inclusivity and Longevity

The federal and state governments’ patchwork policy response to the pandemic has partially and temporarily improved conditions for some working parents. However, the gaps in some federal and state policies neglect to fully address the needs of workers and children. Because workers’ ability to take leave to care for a child depends on a variety of factors, including employer type and size, employer’s policies, and whether an employee has already taken leave, many parents remain in the difficult situation of juggling work responsibilities and caring for their children. Further, many of these programs are set to expire at the end of 2020. Amid unprecedented uncertainty around the status of schools and childcare, examining gaps in existing programs and taking steps to ensure universal coverage is more important than ever.

Families First Coronavirus Response Act (FFCRA)

Enacted in March 2020, the Families First Coronavirus Response Act (FFCRA) contains two key provisions for certain employers to provide paid leave to their employees for specified reasons related to COVID-19. The Emergency Paid Sick Leave Act (EPSLA) grants workers access to up to 80 hours (or the equivalent of two weeks of work for part-time workers) of partially paid leave if they are unable to work due to a COVID-19 quarantine order, illness, or their child’s COVID-19 related school / childcare closure.[xx] The Federal Emergency Family and Medical Leave Expansion Act (EFMLEA) provides employees who need to care for a child whose school or daycare is closed due to COVID-19 up to 12 weeks of job-protected partially paid leave .[xxi]

Under both of these provisions of the FFCRA, wage replacement for workers is tied to the reason for taking leave — wage replacement for employees who take leave for childcare is lower than for those who take leave due to their own illness. Employees who are unable to work because they are themselves quarantining or experiencing COVID-19 symptoms may take leave at their regular pay rate (up to a maximum of $511/day). Employees who take Emergency Paid Sick Leave to provide care are eligible for two-thirds of their regular rate of pay (maximum of $200/day). For employees who are taking Emergency Family and Medical Leave (EFML), the first two weeks may be unpaid (these weeks can be combined with other leave such as the EPSLA) and the remaining 10 weeks are paid at two-thirds of the employee’s regular pay rate (maximum of $200/day).[xxii]

While the leave available under the FFCRA has been helpful for many workers and employers, the program is set to expire on December 31, 2020. Even if the program is extended, not all workers are eligible to take leave under the FFCRA. Workers at large employers (over 500 employees) are excluded from all paid leave provisions under this law. As a result of this exemption, half of New Jersey’s private workforce (1.7 million workers) is automatically excluded from the FFCRA.[xxiii] This exclusion disproportionately limits access to paid leave for Black workers, who are overrepresented among workers at private firms with over 500 employees. While 50 percent of all private sector workers in New Jersey work for firms with over 500 employees, 62 percent of Black workers at private employers work for firms with over 500 employees.[xxiv]

Under the FFCRA, companies with fewer than 50 employees may qualify for exemption from the requirement to provide leave to care for a child out of school or childcare if these requirements would “jeopardize the viability of the business.”[xxv] In addition, employers may exclude healthcare providers and emergency responders from taking paid leave due to school closings or childcare unavailability.[xxvi] As a result of these two exemptions, an additional 34 percent of the private workforce (1.2 million employees) could potentially be denied paid leave for child care. The table below shows the estimated amount of private sector workers in New Jersey who are excluded from coverage under each exemption. In total, only 16% to 50% of New Jersey’s private workforce is guaranteed emergency paid leave for COVID-19 related childcare under the FFCRA.[xxvii] [xxviii]

The FFCRA’s interaction with other programs also poses challenges for many workers. Employees who need to take leave due to both COVID-19 related reasons and other circumstances are not eligible for additional leave under the Family and Medical Leave Act (FMLA). For example, an employee who is a new parent or had to take medical leave may have exhausted their FMLA leave earlier in the year would not be able to access this benefit. Similarly, workers who have taken leave under the FFCRA, but later need take leave because of another illness or caregiving need, do not have access to FMLA for the remainder of the year.

All Workers Deserve Flexibility, Paid Leave, and Protections

The transition to remote learning in New Jersey’s schools and changes to childcare availability due to COVID-19 has complicated the balancing act between work and caregiving for New Jersey’s working families. It is clear that New Jersey cannot wait for the federal government to act — Congress has yet to negotiate an extension of critical leave programs under the FFCRA that expire at the end of December — making it especially important that state lawmakers support the economic security, health, and wellbeing of working families. In a state where the majority of parents are workers, New Jersey cannot afford to push parents out of the workforce. While the challenges facing working parents in New Jersey are substantial, there are several steps that the state can take to immediately improve conditions for working families with children, including increasing flexibility, expanding paid leave, and strengthening protections for workers.

Increase Flexibility and Stability for Workers

The communities that have been hardest hit by COVID-19 are also those that are least likely to be able to work from home, least likely to have stable and predictable schedules, and least likely to be able to afford childcare.  In July 2020, state lawmakers introduced legislation that would prohibit employers from requiring employees to be physically present at work during the public health emergency if they can work remotely and have a school-aged child.[xxix] This is an important step and may help many parents who are able to perform their work remotely; however, for many workers, teleworking is not possible.

In addition to risking their health to perform in-person work, many workers in New Jersey continue to face inflexible, unpredictable, and unstable scheduling practices. These scheduling practices pose challenges to meeting and planning caregiving responsibilities.[xxx] Regulating scheduling practices for hourly workers to ensure that workers have advanced notice of their schedules, fair compensation, sustainable hours, and flexibility when they need it, would improve conditions for New Jersey’s working families.

Expand Paid Leave

Gaps in existing policies leave many New Jersey families without paid leave, making them more likely to lose income and face financial insecurity. Expanding access to paid leave during a public health emergency would help keep more New Jerseyans in the workforce and better accommodate the needs of workers who are sick or need to provide care. Given the exclusions in FFCRA and looming sunset date for these federal paid leave provisions, the state cannot afford to rely on the federal government to provide adequate paid leave to workers.

By making minor changes to existing state programs, New Jersey lawmakers can substantially improve access to paid leave, especially for workers caring for children due to school and childcare changes resulting from COVID-19. For example, expanding the state Earned Sick Leave law to provide for additional days and improved access to paid sick days during a public health emergency would allow more workers to be able to care for loved ones, maintain financial security, and remain in the workforce. In addition, New Jersey could expand eligibility for Family Leave Insurance (FLI) to parents who are ineligible for other paid leave programs and who are unable to work because they must care for a child at home due to a COVID-19 related school or daycare closures. This program could also be made more inclusive by expanding eligibility to include all workers who pay into the program, regardless of immigration status.

Strengthen Job Protections

New Jersey has taken several steps to improve access to job protections, yet far too many workers still refrain from taking leave out of fear of losing their job or retaliation from their employer. Near the onset of COVID-19, New Jersey lawmakers enacted legislation to prohibit employers from terminating or penalizing workers who have themselves contracted or are likely to have contracted an infectious disease and request to take time off work based on the recommendation of a licensed medical professional.[xxxi] Nevertheless, this measure does not provide any protection for workers who take leave due to school or childcare closures resulting from COVID-19.

New Jersey’s Family Leave Act (NJFLA) has been expanded to include care for a loved one due to COVID-19 and care for a child at home because of a public health emergency related closure of schools or places of care.[xxxii] Nevertheless, NJFLA remains limited in several ways. Notably, NJFLA does not apply to employers with fewer than 30 employees, and the protections only cover employees who have been at their job for at least one year and have worked 1000 hours. On the other hand, under the FFCRA, there is no required duration of employment as part of the EPSLA provision and for EFMLEA, workers only have to be employed for 30 calendar days. Since both provisions of the FFCRA expire at the end of 2020, state lawmakers can partially address the gap that will be created in the absence of Congressional action by extending NJFLA to workers who have been employed for 30 days (as opposed to one year) when taking leave during a public health emergency.

Parents are Essential Too

During a health and economic crisis that has upended school, childcare, and work arrangements, ensuring that employees can take time off when they are sick or need to care for their loved ones is essential. Access to workplace flexibility, comprehensive paid leave, and job protections are not only important for the wellbeing of families with children, but also for public health and the economy. By making meaningful changes to promote the wellbeing of New Jersey’s workers who have disproportionately borne the harm caused by the current pandemic, New Jersey will not only be able to have a stronger and more equitable recovery from COVID-19, but also be better prepared for future crises.

 

End Notes

[i] The Census Bureau considers families with a total money income (before taxes) less than the family’s poverty threshold to be in poverty. For example, the 2019 poverty threshold for a family with one adult and one child was $17,622. For a family with two adults and two children, the poverty threshold was $25,962. To access poverty threshold tables, see https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-thresholds.html .

[ii] United States Census Bureau. American Community Survey. 2019 1-Year Estimates. Table S1702: Poverty Status in the Past 12 Months of Families. https://data.census.gov/cedsci/table?q=poverty%20child&g=0400000US34&tid=ACSST1Y2019.S1702&hidePreview=false

[iii] United States Census Bureau. (2020) Household Pulse Survey. Week 19. Spending Table 1: Difficulty Paying Usual Household Expenses in the Last 7 Days, by Select Characteristics: New Jersey. https://www.census.gov/data/tables/2020/demo/hhp/hhp19.html

[iv] United States Census Bureau. Household Pulse Survey. Week 19. Employment Table 1. Experienced and Expected Loss of Employment Income, by Select Characteristics: New Jersey https://www.census.gov/data/tables/2020/demo/hhp/hhp19.html

[v] Gould, Elise and Hedi Shierholz. 2020. “Not everybody can work from home.” Economic Policy Institute. https://www.epi.org/blog/black-and-hispanic-workers-are-much-less-likely-to-be-able-to-work-from-home/

[vi] United States Census Bureau. 2020. Household Pulse Survey: Week 19. Transportation Table 1. Teleworking during the Coronavirus Pandemic, by Select Characteristics: United States. https://www.census.gov/data/tables/2020/demo/hhp/hhp19.html

[vii] United States Census Bureau. Household Pulse Survey: Week 19. Transportation Table 1: Teleworking During the COVID-19 Pandemic, by Select Characteristics. https://www.census.gov/data/tables/2020/demo/hhp/hhp19.html

[viii] Mooney, John and Colleen O’Dea. (September 2020). “NJ Schools Reopen: What Districts Are Remote, In-Person, or Hybrid?” NJ Spotlight News. https://www.njspotlight.com/2020/09/nj-schools-reopen-plan-list/

[ix] United States Census Bureau. American Community Survey 2019: ACS 1-Year Estimates. Table DP03: Selected Economic Characteristics. https://data.census.gov/cedsci/table?q=parents%20employment&g=0100000US_0400000US34&tid=ACSDP1Y2019.DP03&hidePreview=false

[x] Due to limitations in the data, gender identities of the total population of parents could not be fully accounted for here. Please note that transgender and gender nonconforming people, among others, are often made invisible by data.

[xi] American Community Survey. 2019 1-Year Estimates. “Age of Own Children Under 18 Years in Families and Subfamilies by Living Arrangement by Employment Status of Parents”. https://data.census.gov/cedsci/table?q=employment%20children&g=0100000US_0400000US34&tid=ACSDT1Y2019.B23008&hidePreview=true

[xii] Center for American Progress. “Early Learning Factsheet 2019 – New Jersey”. https://cdn.americanprogress.org/content/uploads/2019/09/12071433/New-Jersey.pdf

[xiii] Economic Policy Institute. October 2020. “The cost of childcare in New Jersey”. https://www.epi.org/child-care-costs-in-the-united-states/#/NJ

[xiv] United States Census Bureau. Household Pulse Survey: Week 19. Employment Table 3. Educational Attainment for Adults Not Working at Time of Survey, By Main Reason for Not Working and Paycheck Status While Not Working. https://www.census.gov/data/tables/2020/demo/hhp/hhp19.html

[xv] Fairleigh Dickinson University. September 30, 2020. “Poll: New Jersey Working Parents Face Child Care Challenges Due to COVID-19” https://view2.fdu.edu/publicmind/2020/200930/index.html

[xvi] Fairleigh Dickinson University. September 30, 2020. “Poll: New Jersey Working Parents Face Child Care Challenges Due to COVID-19” https://view2.fdu.edu/publicmind/2020/200930/index.html

[xvii] Global Strategy Group. November 17, 2020. “Parents’ Survey Identifies Stark Racial and Income Disparities This Fall Semester” https://njchildren.org/wp-content/uploads/2020/11/NJ-Public-School-Parents-Memo-Updated-F11.16.20.pdf

[xviii] New Jersey Department of Human Services. ”COVID-19 Childcare.” https://www.childcarenj.gov/COVID19

[xix] New Jersey Department of Health. 2020. “New Jersey COVID-19 Dashboard.” https://covid19.nj.gov/

[xx] U.S. Department of Labor. (2020) “Temporary Rule: Paid Leave Under the Families First Coronavirus Response Act.” https://www.dol.gov/agencies/whd/ffcra

[xxi] U.S. Department of Labor. (2020) “Temporary Rule: Paid Leave Under the Families First Coronavirus Response Act.” https://www.dol.gov/agencies/whd/ffcra

[xxii] U.S. Department of Labor (2020). “Families First Coronavirus Response Act: Employee Paid Leave Rights.” https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave

[xxiii] U.S. Census Bureau. (2020). Quarterly Workforce Indicators (1990-2018). Washington, DC: U.S. Census Bureau, Longitudinal-Employer Household Dynamics Program. https://qwiexplorer.ces.census.gov.

[xxiv] Ibid.

[xxv] U.S. Department of Labor. Families First Coronavirus Response Act: Employee Paid Leave Rights. https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave

[xxvi] Paid Leave Under the Families First Coronavirus Response Act. (2020). 85 FR 19326. https://www.federalregister.gov/documents/2020/04/06/2020-07237/paid-leave-under-the-families-first-coronavirus-response-act

[xxvii] U.S. Census Bureau. (2020). Quarterly Workforce Indicators (1990-2018). Washington, DC: U.S. Census Bureau, Longitudinal-Employer Household Dynamics Program. at https://qwiexplorer.ces.census.gov. These estimates are based on an average of quarterly data from 2018, which is the latest year for which data are available.

[xxviii] U.S. Census Bureau. (2020). Quarterly Workforce Indicators (1990-2018) [computer file]. Washington, DC: U.S. Census Bureau, Longitudinal-Employer Household Dynamics Program. https://qwiexplorer.ces.census.gov

[xxix] New Jersey 2019th Legislature. Assembly No. 4462. https://www.njleg.state.nj.us/2020/Bills/A4500/4462_I1.HTM

[xxx] Schneider, Daniel, Kristen Harknett, and Megan Collins. (2020) Working in the Service Sector in New Jersey. https://shift.hks.harvard.edu/working-in-the-service-sector-in-new-jersey/

[xxxi] New Jersey Public Law 2020, Chapter 9. https://www.njleg.state.nj.us/2020/Bills/PL20/9_.PDF

[xxxii] New Jersey P.L. 2020, Chapter 23. https://www.njleg.state.nj.us/2020/Bills/PL20/23_.PDF

Unprecedented and Unequal: Racial Inequities in the COVID-19 Pandemic

Posted on by Brittany Holom-Trundy

By

Published on Oct 14, 2020 in COVID-19, Health

Health disparities in the COVID-19 pandemic spotlight the long-standing inequities that permeate the health care system. Though the pandemic has been undeniably devastating throughout the country, the impact on Black and Latinx communities outpaces that on other populations.[i] Nationally, Black and Latinx residents have been three times more likely than white residents to contract COVID-19 and nearly twice as likely to die from it.[ii] These patterns are also reflected at the state level. This report examines racial disparities in New Jersey throughout the COVID-19 pandemic and suggests policy solutions to alleviate these problems and build more equitable conditions for the future.

Black and Latinx Cases, Hospitalization Rates, and Mortality Rates Outpace Others

The Garden State’s population, while increasingly diverse, still sees the impact of structural racism in its housing and occupational divides.[iii] Past redlining practices have resulted in the segregation of neighborhoods and schools, with many Black and Latinx families living in densely populated metro areas with segregated school districts.[iv] Residents of color make up over half of employees in essential, or “frontline” industries, including grocery stores and pharmacies; trucking, warehouse, and postal services; cleaning services; public transportation; health care; and child care and social services.[v] These vulnerabilities, in addition to the need for many to commute into New York City or Philadelphia for work, put these residents at greater risk for exposure to the virus. The results of that structural risk are seen in the data, with Black and Latinx populations disproportionately represented in COVID-19 case, hospitalization, and mortality rates.

Age-adjusted case, hospitalization, and mortality rates also show that New Jersey’s Black and Latinx residents have suffered directly from the disease at double to triple the rates of the state’s white and Asian residents.[vi] Due to poor socioeconomic conditions and systemic racism in the health care system, Black and Latinx communities often die at younger ages and have proportionally more young residents than white populations. This means that, amongst the elderly, there are regularly more white than Black or Latinx individuals. The elderly are the most vulnerable age group to COVID-19, which is a possible reason that the white death rate is proportionally higher than the case rate — because there are more white, as opposed to Black or Latinx, elderly residents to suffer from age vulnerability. However, Black and Latinx residents are more likely to contract, be hospitalized, and die from COVID-19 than white residents of the same age group. The age-adjusted rates, then, allow us to better compare relatively incomparable populations, by assessing what the rates would look like if the age structures (proportion in each age group) of these populations were the same. In the case of New Jersey, this shows that Black and Latinx residents have been significantly more likely to suffer from COVID-19 in every way than white or Asian residents.

The state data remains consistent with patterns seen at the national level. In the COVIDView Surveillance Summary published weekly by the Centers for Disease Control and Prevention, nationally reported hospitalization rates amongst Latinx, Black, and American Indian or Alaska Native residents are higher than those of white residents in every age group. The highest rates by age group in the national data range from 3.7 (for non-Latinx Black residents, age 65+) to 8.2 (for Latinx residents, ages 18-49 years old) times those of white residents for that age group.[vii]

Black and Latinx people are more likely to contract COVID-19 than would be expected based on their representation in most counties. Black residents have been particularly overrepresented amongst cases in Atlantic, Burlington, Camden, Essex, Gloucester, Mercer, Somerset, and Union Counties. This means that, even in places where the outbreak and surge began later and general protective measures were already put in place when the disease arrived, residents of color were still more vulnerable than others; their high numbers of deaths and cases were not just due to initial outbreak conditions. In Salem County, for example, Latinx residents made up approximately 40 percent of cases by the end of May, while only accounting for roughly 9 percent of the county population. This means that Latinx residents are between 4 and 5 times overrepresented in the county case count as compared to their representation in the population.[viii] Like with the state-level data, there is a clear divide between Latinx and Black health outcomes and white and Asian health outcomes.

Addressing racial inequities in health will take more than a quick infusion of money or testing during the public health crisis, however. Success in tackling these inequities will include not only improvements in access and quality in the health care system itself, but improvements in conditions shaped by social determinants of health that exacerbate vulnerabilities to outbreaks, such as inadequate housing,[ix] limited access to nutritious foods,[x] and low-paying jobs in unsafe environments that prove to be essential during historic pandemics.[xi]

The COVID-19 pandemic has highlighted these broader trends in socioeconomic vulnerabilities. Residents of color have seen the greatest unemployment rates throughout the crisis in New Jersey, putting them at greater risk for financial insolvency.[xii] In the Household Pulse Survey from the Census Bureau, Black and Latinx households in New Jersey were approximately three times more likely than white households to report not having enough to eat in the past seven days.[xiii] Black and Latinx residents, as well as residents identifying as multiracial, were more likely to report being behind on rental payments than white or Asian residents: Latinx residents were twice as likely as white residents to report this, while Black and multiracial residents were between 3.5 and 4 times more likely to do so.[xiv] Latinx residents were three times more likely than white residents to report lacking health insurance, in addition to being the most likely residents to experience feelings of nervousness, anxiety, and being on edge.[xv] Black residents were twice as likely as white residents to report lacking health insurance;[xvi] they were also most likely (nearly 1.5 times more likely than white residents) to report both delaying medical care and needing medical care for something other than COVID-19, but not getting it, in the past four weeks.[xvii] As a result, there are dual crises: residents of color have a greater likelihood of contracting the virus due to unhealthy conditions beyond their control, while they also face the devastating impact of the virus on long-term health and finances. This will create even greater inequities of health and well-being outcomes in the post-COVID-19 world.[xviii]

Lack of Adequate Planning and Prevention has Led to Greater Suffering

State and local lawmakers’ efforts to address racial disparities and prevent devastation that exacerbates inequities have been inadequate. New Jersey’s county leaders did not anticipate a pandemic sweeping through the state so violently; only Mercer County identified a pandemic as a hazard of concern in mitigation plans in 2018.[xix] Given this, during the early stages of the crisis, counties were less prepared, hospitals were overwhelmed, and, without known treatments and overflowing hospital beds, providers were required to ration treatments, meaning that patients were more likely to die.[xx]

This lack of preparation was not inevitable. In New Jersey, past disease outbreaks have shown that certain counties and populations are regularly vulnerable to these early stages of epidemics.[xxi] With COVID-19, the first case was identified in Bergen County, near New York City, on March 4, 2020.[xxii] The outbreak quickly spread to the neighboring counties outside of New York City, the same counties that have been vulnerable to outbreaks in the past.[xxiii] Of the state’s seven counties with majority communities of color — that is, counties with over 50 percent of the population identifying as Latinx, Asian, Black, Alaska Native, American Indian, Native Hawaiian or Other Pacific Islander, or another race outside of the white population in the 2019 American Community Survey data (Cumberland, Essex, Hudson, Mercer, Middlesex, Passaic, and Union) —  five (Essex, Hudson, Middlesex, Passaic, and Union) were among those hit the hardest by the pandemic during its early stages.[xxiv] Even within counties, communities of color suffered more than white populations, as access to resources became a determining factor in the number of cases and deaths, creating disparities between neighboring zip codes.[xxv]

This means that the harms of COVID-19 in New Jersey have been two-fold. First, the counties to initially get hit — and therefore, are most vulnerable to a surge beyond their hospitals’ capacities — were largely communities of color, resulting in many cases and deaths among residents of color. Then, in counties not hit by the early surge, Black and Latinx populations have been more vulnerable, likely due to the effects of structural racism that have created unhealthy environments and living conditions, limited access to care, and discrimination in care.[xxvi]

This lack of planning can be seen in health statistics beyond the COVID-19 data. This is because the toll of COVID-19 comes not only from cases related to the disease itself, but also from its consequences. Excess death data, which compares the deaths counted during a specific time period to average deaths during that period in previous years, can help to show a picture of the true impact of an event by accounting for not only deaths directly from COVID, but also those that may have resulted from the indirect effects of the outbreak, such as depression and other mental health challenges due to hardships or an unwillingness or fear of seeking care for other medical issues.[xxvii]

Like with the confirmed cases data, New Jersey’s most diverse communities have significant representation when examining excess deaths. Essex County, in which approximately 70 percent of residents are people of color, saw nearly 1,900 excess deaths at the peak of the pandemic in April 2020, an approximately 400 percent increase over the average April death count for the county.[xxviii] Essex County has also experienced the highest number of deaths overall from COVID-19, counting 1,901 confirmed deaths as of October 7, 2020. Additionally, there have been an estimated 229 probable COVID deaths in the county that have not been confirmed.[xxix]

While Essex County’s number of excess deaths comes close to its number of confirmed and probable COVID-19 deaths, the hundreds of additional deaths included in the data may be unconfirmed deaths due to COVID-19.[xxx] These can result from lack of access to testing, avoidance of or lack of access to care for other medical issues, or “deaths of despair” — deaths due to drugs, suicide, or alcohol — that can be connected to the stress of the COVID-19 pandemic.[xxxi] Amongst communities of color, deaths both directly from COVID-19 and deaths caused indirectly by the pandemic’s conditions are also exacerbated by “weathering,” the effect on health and well-being of living long term with inequitable socioeconomic conditions.[xxxii]

The impact of the COVID-19 pandemic does not end with hospitalizations and deaths, or even with possible unconfirmed deaths or deaths caused indirectly from the pandemic’s conditions. Differences in trust in the medical system across racial groups will cause these disparities to diverge even further. A long history of systematic racism in health care remains fresh for many Black residents, and many still experience this racism today. This has led to a distrust among Black communities, in particular, of doctors, vaccines, and other paths that will be necessary tools in containing the outbreak.[xxxiii] If people most at risk for the virus and long-term damaging effects or death are also more likely than others to either not have access to or to be unwilling to get the vaccine, then disparities will become even greater as the outbreak rages on amongst our most vulnerable populations. The more the virus continues to spread, the more that neighbors, friends, classmates, and co-workers also continue to risk contracting COVID-19, and the worse the long-term economic impact of the pandemic.

The lack of extensive data collection and transparency makes all of the efforts to address issues of inequity and build better preparedness systems more difficult. Lawmakers have been slow to initiate the collection of racial and ethnic data during both COVID-19 and previous public health emergencies, resulting in partial data and a need to try to backtrack in order to add this data to previously collected information.[xxxiv] When data is collected, the categories often used for race and ethnicity, including those used by the New Jersey Department of Health (DOH) cited here, are broad. In being so broad, they do not accurately depict the many varied experiences of residents within each race or Latinx category. They do not, for instance, differentiate between residents identifying as East Asian (such as Japanese) versus South or Southeast Asian (such as Indian). They also do not account for the different experiences of residents who are first-generation immigrants as compared to residents who identify with a racial or ethnic group but have grown up in the United States. This can be an important factor in understanding the full picture of residents’ experiences with racism in the healthcare system and therefore needs to be examined more in-depth than the data currently provides.[xxxv]

Greater Investment in the Future Health of New Jersey is Necessary

Budget choices reveal lawmakers’ values, especially when choices about access to health programs can literally be the difference between life and death. Overall, funding for DOH has significantly decreased over the past 15 years, standing 61 percent lower than its Fiscal Year (FY) 2005 levels. Funding relative to the size of the population has been reduced from $287.62 per resident in FY 2005 to $178.46 per resident in FY 2019.[xxxvi]

Some of this funding decline was due to structural changes, such as the moving of programs outside of DOH. For instance, the Division of Aging (formerly known as Senior Services) — which funds programs like the Pharmaceutical Assistance to the Aged and Disabled (PAAD) and Senior Gold programs that provide prescription drug benefits to low-income seniors and individuals with disabilities — moved to the Department of Human Services (DHS) in FY 2013.[xxxvii] In addition, the state has not increased funding for DOH to reflect increases in New Jersey’s population.

While DHS directs many services related to health (such as Medicaid) and other anti-poverty initiatives that address social determinants of health, the overall decline in direct DOH funding has resulted in diminishing support for many key divisions and programs addressing health inequities. These include the Office of Minority and Multicultural Health as well as the Communicable Disease Service, which are meant to strengthen New Jersey’s health care system and better protect New Jersey residents.

The Office of Minority and Multicultural Health, the mission of which is to “promote health equity for all and reduce health disparities,” has received the same special purpose funding ($1.5 million) from the early 2000s up until the fiscal year 2021 budget, when a slight cut was made in response to the COVID-19 crisis.[xxxviii] Because the funding was maintained at the same dollar amount, the value of those dollars has decreased over the years due to inflation.

Attention given to newer initiatives to address racial disparities, such as the Nurture NJ multi-agency campaign to address New Jersey’s abysmal Black maternal and infant mortality rates, has provided some promise of improvements in the future.[xxxix]These programs cannot be short-lived or one-off promotions, however, to truly impact the long-term health landscape for New Jersey’s populations. In order to both permanently and effectively address racial disparities in health outcomes, New Jersey lawmakers should consider prioritizing the following:

  • Build data collection capacity and transparency.
    Much of the data presented in this brief does not cover all cases, hospitalizations, or deaths. Some only cover around 50 to 60 percent of cases because racial and ethnic data was not directed to be collected until the end of April, a month after Governor Murphy instituted his stay-at-home order.[xl] The need for this data should not have been a surprise — there were many calls for better collection efforts after the 2009 H1N1 outbreak in the United States, which appear to have gone unheeded.[xli] Without data — and particularly data collected on cases, rather than just during hospitalization or post-mortem — it is impossible to determine how to most effectively and efficiently fund and design programs meant to address racial inequities.A federal initiative to regulate these types of actions across states would produce more uniform data and a clearer picture than current efforts, since states have differing practices in both the decisions to collect data and how they collect the data.[xlii] However, until federal-level initiatives are pursued, New Jersey can take its own steps to become a leader in these efforts. Regulations that automatically trigger this data collection during crises and permanent directives to collect this data would move the state forward in better understanding the consequences of outbreaks like COVID-19. Additionally, greater efforts to coordinate and support systematic population health work in the state is needed: New Jersey is currently one of only 15 states without a public health institute or participation in the National Network of Public Health Institutes.[xliii]
  • Require regular state health racial equity impact assessments for policy proposals.
    In addition to greater data transparency during crises, New Jersey should require systematic analysis of the racial impacts of policy proposals. This would both aid in providing a picture of the long-term impact a policy would have on New Jersey’s population, as well as develop a stronger understanding of policy designs that work.[xliv] Having improved data collection efforts, as mentioned in the section above, is crucial for this work.
  • Increase support for initiatives that improve trust in the medical system.
    While cultural competency training will aid in the communication between doctors and patients and therefore should be continued, it does not guarantee overall greater health outcomes unless residents of the at-risk populations come to a medical professional in the first place.[xlv] Programs that work to understand the causes of distrust and identify trusted sources of information can help to create better systems for disseminating facts about medical care and encourage take-up. Increased funding and support for New Jersey’s Office of Minority and Multicultural Health, initially established in 1991, can provide a foundation for these efforts.[xlvi]

  • Encourage policies that diversify the medical field and improve access to culturally sensitive resources.
    While steps have been made in recent years to bring more diversity to medical education and, in turn, the medical field, even more can be done to encourage the building of a medical profession that reflects the population it is serving.[xlvii]Continuing to build programs that provide support for medical professionals who come from vulnerable populations, better encourage practice in areas of greatest need, and remove barriers to providers and services to improve cultural competence of the available resources, will be necessary. New Jersey has recently taken steps in this direction by working to improve access to doula services and removing barriers to professional licenses for immigrant populations.[xlviii] The state should continue in this direction by supporting initiatives focused on greater diversity in the medical field, such as Graduate Medical Education (GME) programs, and by exploring the creation of programs that provide financial support for those serving in areas of critical need.[xlix]
  • Build racial impact results into future public health crisis preparedness plans.
    While the current New Jersey preparedness plan does provide an in-depth look into the possible severity of an outbreak, its economic costs, and environmental and structural factors that may exacerbate certain types of outbreaks, there is no discussion of the fact that certain racial and ethnic groups are more subject to those factors than others, and that the combined impact of the inequities can exacerbate the poor outcomes even further.[l]

Building on these efforts with additional policies that address housing, food insecurity, schooling, workers’ safety, and other areas that impact health will further lessen the inequities in health outcomes that we see in New Jersey. While New Jersey’s challenges in these areas seem daunting, systematic investment in programs that promote equity will lead to healthier lives for all — both during normal times and especially during future health crises.

 

[i] This brief refers to residents who identify as having ethnic roots in Spain or Latin America with the term “Latinx.” While this term is not used by all residents identifying with this ethnicity (see Noe-Bustamante, Luis, Lauren Mora, and Mark Hugo Lopez (2020). “About One-in-Four U.S. Hispanics Have Heard of Latinx, but Just 3% Use It.” Pew Research Center. Online: https://www.pewresearch.org/hispanic/2020/08/11/about-one-in-four-u-s-hispanics-have-heard-of-latinx-but-just-3-use-it/), this term is more inclusive of all populations with this ethnic identity, including those who may not identify as native Spanish speakers. Also, utilizing “Latinx” rather than “Latino” or “Latina” is more gender-inclusive. All of these considerations help to create more inclusivity for the population considered here, something that is particularly important in addressing structural racism in health care, which does not, in many ways, differentiate between a first-generation immigrant and later generations with these familial roots.

[ii] Oppel Jr., Richard A., Robert Gebeloff, K.K. Rebecca Lai, Will Wright, and Mitch Smith (2020). “The Fullest Look Yet at the Racial Inequity of Coronavirus.” New York Times. 5 July 2020. Online: https://www.nytimes.com/interactive/2020/07/05/us/coronavirus-latinos-african-americans-cdc-data.html

[iii] Raychaudhuri, Disha (2020). “N.J. is more diverse than ever. See how your town has changed.” NJ Advance Media for NJ.com. 19 February 2020. Online: https://www.nj.com/data/2020/02/nj-is-more-diverse-than-ever-see-how-your-town-has-changed.html

[iv] Orfield, Gary, Jongyeon Ee, and Ryan Coughlann (2017). “New Jersey’s Segregated Schools: Trends and Paths Forward.” UCLA: The Civil Rights Project. November 2017. Online: https://www.civilrightsproject.ucla.edu/research/k-12-education/integration-and-diversity/new-jerseys-segregated-schools-trends-and-paths-forward/New-Jersey-report-final-110917.pdf?_ga=2.105008256.2029930253.1598600934-536607244.1597420044; Petenko, Erin, and Disha Raychaudhuri (2018). “Why Minorities in N.J. are More Likely to be Denied Mortgages, Explained.” NJ.com. Posted 16 February 2018. Updated 30 January 2019. Online: https://www.nj.com/data/2018/02/modern-day_redlining_how_some_nj_residents_are_bei.html

[v] Center for Economic and Policy Research (2020). “A Basic Demographic Profile of Workers in Frontline Industries.” 7 April 2020. Online: https://cepr.net/a-basic-demographic-profile-of-workers-in-frontline-industries/. State-level data available in linked spreadsheet.

[vi] An important note to make about all this data from the Department of Health is that the categories for race and ethnicity are broad and, in being so broad, do not accurately depict the many varied experiences of residents within each race or Latinx category. This can be an important factor in understanding the full picture of residents’ experiences with racism in the healthcare system and therefore needs to be examined more in-depth than the data currently provides.

[vii] Centers for Disease Control and Prevention (2020). COVIDView. Weekly Summary for Week 39, ending September 26, 2020. Online: https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html. Hospitalization rates for each age group can be found on page 10.

[viii] Salem County’s first confirmed COVID-19 case was reported on March 21, 2020, approximately 17 days after officials confirmed the first case in New Jersey. This was also the day that Governor Murphy announced the state lockdown of all non-essential businesses. See Salem County Department of Health and Human Services (2020). “Salem County Health Department Confirms First Positive Case of Coronavirus.” 21 March 2020. Online: https://health.salemcountynj.gov/salem-county-health-department-confirms-first-positive-case-of-coronavirus/; Erminio, Vinessa (2020). “Coronavirus in New Jersey: A Timeline of the Outbreak.” NJ Advance Media for NJ.com. Last updated on 12 June 2020. Online: https://www.nj.com/coronavirus/2020/03/coronavirus-in-new-jersey-a-timeline-of-the-outbreak.html

[ix] Taylor, Lauren (2018). "Housing and Health: An Overview of the Literature." Health Affairs Health Policy Brief 10. Online: https://www.healthaffairs.org/do/10.1377/hpb20180313.396577/full/

[x] Gundersen, Craig, and James P. Ziliak (2015). "Food Insecurity and Health Outcomes." Health Affairs 34 (11): 1830-1839. Online: https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2015.0645

[xi] McCormack, Grace, Christopher Avery, Ariella Kahn-Lang Spitzer, and Amitabh Chandra (2020). Economic Vulnerability of Households With Essential Workers. JAMA. 2020;324(4):388–390. doi:10.1001/jama.2020.11366. Online: https://jamanetwork.com/journals/jama/fullarticle/2767630; Yearby, Ruqaiijah, and Seema Mohapatra (2020). "Law, Structural Racism, and the COVID-19 Pandemic." Journal of Law and the Biosciences (Forthcoming). No. 2020-8. Online: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3612824

[xii] Kapahi, Vineeta (2020). “Labor Day Snapshot: How New Jersey Can Honor Workers and Improve Economic Security.” New Jersey Policy Perspective. 7 September 2020. Online: https://www.njpp.org/reports/labor-day-snapshot-how-new-jersey-can-honor-workers-and-improve-economic-security

[xiii] U.S. Census Bureau (2020). Week 15 Household Pulse Survey: September 16-28. “Food Table 2b. Food Sufficiency for Households, in the Last 7 Days, by Select Characteristics: New Jersey.” https://www.census.gov/data/tables/2020/demo/hhp/hhp15.html  At the time of writing, this was the most recent release.

[xiv] U.S. Census Bureau (2020). Week 15 Household Pulse Survey: September 16-28. “Housing Table 1b. Last Month’s Payment Status for Renter-Occupied Housing Units, by Select Characteristics: New Jersey” https://www.census.gov/data/tables/2020/demo/hhp/hhp15.html At the time of writing, this was the most recent release.

[xv]  U.S. Census Bureau (2020). Week 15 Household Pulse Survey: September 16-28. “Health Table 3. Current Health Insurance Status, by Select Characteristics: New Jersey” and “Health Table 2a. Symptoms of Anxiety Experienced in the Last 7 days, by Select Characteristics: New Jersey.”https://www.census.gov/data/tables/2020/demo/hhp/hhp15.html At the time of writing, this was the most recent release.

[xvi] U.S. Census Bureau (2020). Week 15 Household Pulse Survey: September 16-28. “Health Table 3. Current Health Insurance Status, by Select Characteristics: New Jersey.” https://www.census.gov/data/tables/2020/demo/hhp/hhp15.html At the time of writing, this was the most recent release.

[xvii] U.S. Census Bureau (2020). Week 15 Household Pulse Survey: September 16-28. “Health Table 1. Coronavirus Pandemic Related Problems with Access to Medical Care, in Last 4 weeks, by Select Characteristics: New Jersey.” https://www.census.gov/data/tables/2020/demo/hhp/hhp15.html At the time of writing, this was the most recent release.

[xviii] Tolbert, Jennifer Kendal Orgera, Natalie Singer, and Anthony Damico (2020). “Communities of Color at Higher Risk for Health and Economic Challenges due to COVID-19.” Kaiser Family Foundation. 7 April 2020. Online: https://www.kff.org/coronavirus-covid-19/issue-brief/communities-of-color-at-higher-risk-for-health-and-economic-challenges-due-to-covid-19/

[xix]   New Jersey Office of Emergency Management (2018). “5.1 Identification of Hazards.” 2019 New Jersey State Hazard Mitigation Plan. Online: http://ready.nj.gov/mitigation/2019-mitigation-plan.shtml Specific chapter: http://ready.nj.gov/mitigation/pdf/2019/mit2019_section5-1_Id_Hazards.pdf. Pg. 5.

[xx] Cavallo, Joseph J., Daniel A. Donoho, and Howard P. Forman (2020). "Hospital Capacity and Operations in the Coronavirus Disease 2019 (COVID-19) Pandemic—Planning for the Nth Patient." In JAMA Health Forum 1 (3): e200345-e200345. American Medical Association. Online: https://jamanetwork.com/channels/health-forum/fullarticle/2763353; Some groups worked to build tools for building better hospital surge capacity as the pandemic developed. See, for example: Abir, Mahshid, Christopher Nelson, Edward W. Chan, Hamad Al-Ibrahim, Christina Cutter, Karishma Patel, and Andy Bogart (2020). “Critical Care Surge Response Strategies for the 2020 COVID-19 Outbreak in the United States.” Santa Monica, CA: RAND Corporation. Online: https://www.rand.org/pubs/research_reports/RRA164-1.html. See also New Jersey’s response to the surge: New Jersey Department of Health (2020). “Allocation of Critical Care Resources During a Public Health Emergency.” 11 April 2020. Online: https://nj.gov/health/legal/covid19/FinalAllocationPolicy4.11.20v2%20.pdf

[xxi] Kaulessar, Ricardo (2018). “100 years ago, Spanish flu pandemic brought dread to New Jersey.” NorthJersey.com. Online: https://www.northjersey.com/story/news/local/2018/10/09/1918-spanish-flu-pandemic-killed-thousands-new-jersey/1222214002/; Influenza Encyclopedia (n.d.) “Newark, New Jersey.” Published by University of Michigan Center for the History of Medicine and Michigan Publishing and University of Michigan Library. Online: https://www.influenzaarchive.org/cities/city-newark.html; New Jersey Office of Emergency Management (2018). “5.21 Pandemic.” 2019 New Jersey State Hazard Mitigation Plan. Online: http://ready.nj.gov/mitigation/2019-mitigation-plan.shtml Specific chapter: http://ready.nj.gov/mitigation/pdf/2019/mit2019_section5-21_Pandemics.pdf

[xxii] Office of Governor Phil Murphy (2020). “Governor Murphy, Acting Governor Oliver, and Commissioner Persichilli Announce First Presumptive Positive Case of Novel Coronavirus in New Jersey.” 4 March 2020. Online: https://www.nj.gov/governor/news/news/562020/20200304e.shtml

[xxiii] Kaulessar, Ricardo (2018). “100 years ago, Spanish flu pandemic brought dread to New Jersey.” NorthJersey.com. Online: https://www.northjersey.com/story/news/local/2018/10/09/1918-spanish-flu-pandemic-killed-thousands-new-jersey/1222214002/; Influenza Encyclopedia (n.d.) “Newark, New Jersey.” Published by University of Michigan Center for the History of Medicine and Michigan Publishing and University of Michigan Library. Online: https://www.influenzaarchive.org/cities/city-newark.html; New Jersey Office of Emergency Management (2018). “5.21 Pandemic.” 2019 New Jersey State Hazard Mitigation Plan. Online: http://ready.nj.gov/mitigation/2019-mitigation-plan.shtml Specific chapter: http://ready.nj.gov/mitigation/pdf/2019/mit2019_section5-21_Pandemics.pdf

[xxiv] NJPP Analysis of New Jersey Department of Health (DOH), Communicable Disease Service - COVID-19 Dashboard data and Census data. DOH data online at: https://covid19.nj.gov/. Estimated population data found through the American Community Survey through the Census Bureau. 2019 1-Year Estimates. Table DP05, Demographic and Housing Estimates. This can be found online at: https://data.census.gov

[xxv] Balcerzak, Ashley and Stacey Barchenger (2020). “COVID-19 in your ZIP code: Race, income can double your chance of getting sick in NJ.” NorthJersey.com. 13 July 2020. Online: https://www.northjersey.com/story/news/coronavirus/2020/07/13/coronavirus-nj-race-income-can-double-your-chance-getting-sick/5404947002/

[xxvi] Rubin-Miller, Lily Christopher Alban, Samantha Artiga, and Sean Sullivan (2020). “COVID-19 Racial Disparities in Testing, Infection, Hospitalization, and Death: Analysis of Epic Patient Data.” Kaiser Family Foundation. 16 September 2020. Online: https://www.kff.org/coronavirus-covid-19/issue-brief/covid-19-racial-disparities-testing-infection-hospitalization-death-analysis-epic-patient-data/

[xxvii] Centers for Disease Control and Prevention (2020). “Excess Deaths Associated with COVID-19.” Online: https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm

[xxviii] NJPP Analysis of Census Bureau data. American Community Survey, 2019 1-Year Estimates. Table DP05, Demographic and Housing Estimates. Online: https://data.census.gov

[xxix] New Jersey Department of Health, Communicable Disease Service (2020). COVID-19 Dashboard. Online: https://covid19.nj.gov/. Accessed 7 October 2020. Probable deaths are updated every week, with the latest update on 29 September 2020.

[xxx] It is important to note here that the excess deaths data only covers up until July, and so does not total deaths up until October as the COVID deaths update includes. This means that the total will likely go up for the number of excess deaths, though the later months were not the peak months of the pandemic.

[xxxi] Petterson, Steve et al (2020). “Projected Deaths of Despair During the Coronavirus Recession,” Well Being Trust. 8 May 2020. WellBeingTrust.org. Online: https://wellbeingtrust.org/areas-of-focus/policy-and-advocacy/reports/projected-deaths-of-despair-during-covid-19/

[xxxii] Forde, Allana T., Danielle M. Crookes, Shakira F. Suglia, and Ryan T. Demmer (2019). "The weathering hypothesis as an explanation for racial disparities in health: a systematic review." Annals of epidemiology 33: 1-18.

[xxxiii] Gramlich, John and Cary Funk (2020). “Black Americans Face Higher COVID-19 Risks, are More Hesitant to Trust Medical Scientists, Get Vaccinated.” Pew Research Center. 4 June 2020. Online: https://www.pewresearch.org/fact-tank/2020/06/04/black-americans-face-higher-covid-19-risks-are-more-hesitant-to-trust-medical-scientists-get-vaccinated/

[xxxiv] Kim, Soo Rin and Matthew Vann (2020). “Many States Are Reporting Race Data For Only Some COVID-19 Cases And Deaths.” FiveThirtyEight. 7 May 2020. Online: https://fivethirtyeight.com/features/many-states-are-reporting-race-data-for-only-some-covid-19-cases-and-deaths/; National Academy for State Health Policy (2020). “How States Collect Data, Report, and Act on COVID-19 Racial and Ethnic Disparities.” Online: https://www.nashp.org/how-states-report-covid-19-data-by-race-and-ethnicity/

[xxxv] Hummer, Robert A. and Iliya Gutin (2018). "Racial/ethnic and Nativity Disparities in the Health of Older US Men and Women." In Future Directions for the Demography of Aging: Proceedings of a Workshop. Washington, D.C.: The National Academies Press, Washington, DC. Pages 31-66; Enchautegui, María E. (2014). “Immigrant Youth Outcomes: Patterns by Generation and Race and Ethnicity.” Urban Institute. Online: https://www.urban.org/sites/default/files/publication/22991/413239-Immigrant-Youth-Outcomes-Patterns-by-Generation-and-Race-and-Ethnicity.PDF; Teruya, Stacey A. and Shahrzad Bazargan-Hejazi (2013). "The Immigrant and Hispanic Paradoxes: A Systematic Review of Their Predictions and Effects." Hispanic Journal of Behavioral Sciences 35 (4): 486-509.

[xxxvi] Calculated using NJPP analysis of Budget Data and Census Data from 2019 estimates (latest available). Intercensal data tables can be found at: https://www.census.gov/data/tables/time-series/demo/popest/intercensal-2000-2010-state.html. Data estimates for the 2019 population can be found at: https://www.census.gov/quickfacts/NJ. Budget information can be found at: https://www.njleg.state.nj.us/legislativepub/finance.asp

[xxxvii] This is now titled the “Division of Aging Services.”

[xxxviii] New Jersey Department of Health, Office of Minority and Multicultural Health (2020). “About Us.” Last Reviewed: 11/23/2018. Online: http://www.nj.gov/health/ommh/about-us; Budget analysis completed by author using Departmental Appropriations information on the New Jersey Office of Management and Budget (OMB) website.

[xxxix] Office of Governor Phil Murphy. “Nurture NJ.” Online: https://www.nj.gov/governor/admin/fl/nurturenj.shtml

[xl] Office of Governor Phil Murphy. “Governor Murphy Announces Actions to Require Reporting of COVID-19 Demographic Data.” 22 April 2020. Online: https://nj.gov/governor/news/news/562020/approved/20200422b.shtml

[xli] Gibbons, Ann (2020). “How can We Save Black and Brown Lives During a Pandemic? Data from Past Studies can Point the Way.” Science. 10 April 2020. Online: https://www.sciencemag.org/news/2020/04/how-can-we-save-black-and-brown-lives-during-pandemic-data-past-studies-can-point-way

[xlii] National Academy for State Health Policy (2020). “How States Collect Data, Report, and Act on COVID-19 Racial and Ethnic Disparities.” Online: https://www.nashp.org/how-states-report-covid-19-data-by-race-and-ethnicity/

[xliii] National Network of Public Health Institutes (2020). Website: https://nnphi.org/about-nnphi/. Last accessed: 9 September 2020.

[xliv] Race Forward (n.d.). Racial Equity Impact Assessment Toolkit. Online: https://www.raceforward.org/practice/tools/racial-equity-impact-assessment-toolkit; Center for the Study of Social Policy (2018). “Racial Equity Impact Assessment.” Online: https://cssp.org/wp-content/uploads/2018/08/Race-Equity-Impact-Assessment-Tool.pdf

[xlv] County Health Rankings & Roadmaps, a Robert Wood Johnson Foundation Program (2020). “Cultural Competence Training for Health Care Professionals.” Updated 27 January 2020. Online: https://www.countyhealthrankings.org/take-action-to-improve-health/what-works-for-health/strategies/cultural-competence-training-for-health-care-professionals

[xlvi] New Jersey Department of Health. Office of Minority and Multicultural Health. Online: https://www.nj.gov/health/ommh/

[xlvii] Boatright, Dowin H., Elizabeth A. Samuels, Laura Cramer, Jeremiah Cross, Mayur Desai, Darin Latimore, and Cary P. Gross (2018). "Association between the Liaison Committee on Medical Education’s Diversity Standards and Changes in Percentage of Medical Student Sex, Race, and Ethnicity." JAMA 320 (21): 2267-2269.

[xlviii] Office of Governor Phil Murphy (2020). “Governor Murphy Signs Legislative Package to Combat New Jersey’s Maternal and Infant Health Crisis.” 8 May 2019. Online: https://www.nj.gov/governor/news/news/562019/20190508a.shtml; Office of Governor Phil Murphy (2020). “Governor Murphy Signs Legislation Expanding Access to Professional and Occupational Licenses.” 1 September 2020. Online: https://www.nj.gov/governor/news/news/562020/approved/20200901c.shtml

[xlix] A good example of these efforts is the Washington Health Corps, established in 2019. See information here: https://wsac.wa.gov/washington-health-corps

[l] New Jersey Office of Emergency Management (2018). “5.21 Pandemic.” 2019 New Jersey State Hazard Mitigation Plan. Online: http://ready.nj.gov/mitigation/2019-mitigation-plan.shtml Specific chapter: http://ready.nj.gov/mitigation/pdf/2019/mit2019_section5-21_Pandemics.pdf

New Jersey’s School Re-openings Are Racially Unequal

Posted on by Mark Weber

This past month, New Jersey’s public schools reopened for the 2020-21 school year, and not all students are having the same back-to-school experience. As the state continues to limit the spread of COVID-19, some school districts are starting their school year fully remote, some are offering a “hybrid” of in-person and remote instruction, and a few are fully in-person. As a result, the pandemic appears to be surfacing ongoing problems with segregation and school underfunding that translates into unequal access to in-person instruction.[i]

As of September 13, most districts settled with the state on how they would begin the school year, according to data released by NJ Spotlight.[ii] Slightly more than half of New Jersey students are in school districts with fully remote programs; about one-third are in districts offering hybrid programs; eight percent of students are in “combination” districts, which offer different reopening plans within the district; and two percent are in districts with fully in-person instruction (six percent of students are enrolled in districts for which there is no data).

It is important to note that even if a school district offers in-person schooling, that district must offer a fully remote option for students, as required by the Murphy administration.[iii] The figures below, therefore, do not represent how many students are enrolled in each option; instead, they show what options are available to families and students. A student in a “hybrid” district, for example, may still choose to attend school entirely remotely; a student in a “remote” district, however, does not have the option of enrolling in a hybrid program.

The Murphy administration has emphasized the importance of allowing school districts to make re-opening decisions “…that best fits the district’s local needs.”[iv] It is well documented, however, that New Jersey’s school districts are highly segregated.[v] Therefore, it is important to determine if the state’s school reopening plans are equally available to students of different races and ethnicities.

White students, for example, are more likely to be enrolled in a district that offers at least some in-person instruction. Six out of ten New Jersey students enrolled in a hybrid district are white, while only three out of ten students in a remote district are white.

In contrast, six out of ten students in fully remote districts are Black or Hispanic, while only one-quarter of the students enrolled in hybrid districts are Black or Hispanic. This demonstrates a clear difference in the racial and ethnic characteristics of districts that do and do not offer in-person instruction. 

There are several possible reasons for these disparities. Polls have shown that Black and Hispanic parents are generally more wary about sending their children back to school buildings during the pandemic.[vi] It may be that school districts offering only remote instruction believe putting their focus on improving that instruction is more aligned with parents’ desires.

However, it may also be that these parents perceive that their children’s schools are less safe than others, due to a lack of adequate resources. Recent national polling has found that Black and Hispanic parents perceive that there are large disparities in school funding across racial lines.[vii] Families of color may, therefore, be responding to systemic inequities that leave their children’s schools less able to offer in-person instruction safely.

New Jersey’s School Funding Reform Act (SFRA) sets an “adequacy target” for school districts; the target is the amount of funding that is needed for students to receive an adequate education, per the state’s funding formula calculations.[viii] Many districts, however, do not spend enough to meet their targets; some districts are below their per pupil target amount by more than $5,000. 

Many more of the students enrolled in “remote” districts are also enrolled in districts that are underfunded, according to SFRA targets. About 128,000 of those students are enrolled in districts that are severely underfunded; in fact, the vast majority of New Jersey students in districts underfunded by more than $5,000 per pupil are also in districts that offer no in-person learning option.

Overall, inequities in funding appear to be translating into inequities in access to in-person instruction. It would be a serious mistake, however, to assume that these inequities should be addressed simply by forcing districts to begin offering hybrid programs. School districts that suffer from chronic underfunding are almost certainly not able to provide the same level of safety during the pandemic as well-resourced districts. Differences in building ventilation, square footage per student, student-to-staff ratios, health care services, and many other important factors – which are caused by chronic underfunding – will undoubtedly impact a district’s ability to safely educate its students.

The racial and ethnic disparities in school reopening programs should be a wakeup call to New Jersey policymakers: it is yet another example of how inadequate and inequitable funding is creating different systems of schooling for different students.

End Notes

[i] In this post, I merge the data on school re-openings with student enrollment and fiscal data from the New Jersey Department of Education (https://www.nj.gov/education/data/). By combining these sources, it is possible to determine the enrollment of students in districts employing different learning models, and the demographic characteristics of the students in each type of model.

[ii] John Mooney & Colleen O’Dea, 9/4/20, updated 9/13/20. “NJ Schools Reopen: What Districts Are Remote, In-Person or Hybrid?” NJ Spotlight. https://www.njspotlight.com/2020/09/nj-schools-reopen-plan-list/

[iii] Amanda Hooper, 7/20/20. “N.J. to allow all-remote learning option for students when schools reopen in the fall, Murphy says” NJ Advance Media for NJ.com. https://www.nj.com/coronavirus/2020/07/nj-to-allow-all-remote-learning-option-for-students-when-schools-reopen-in-the-fall-murphy-says.html

[iv] State of New jersey, Governor Phil Murphy, 6/26/20. “Murphy Administration Announces Reopening Guidance for New Jersey Schools.” https://www.nj.gov/governor/news/news/562020/20200626b.shtml

[v] Orfield, G., Ee, J., Coughlan, R. (2017) New Jersey’s Segregated Schools; Trends and Paths Forward. https://www.civilrightsproject.ucla.edu/research/k-12-education/integration-and-diversity/new-jerseys-segregated-schools-trends-and-paths-forward/New-Jersey-report-final-110917.pdf

[vi] Matt Barnum and Claire Bryan, 7/14/20. “Despite stress of closures, most parents wary of rush to return to school buildings, polls show.” Chalkbeat. https://www.chalkbeat.org/2020/7/14/21324873/school-closure-reopening-parents-surveys

[vii] The Leadership Conference Education Fund (2017). The Second Annual New Education Majority Poll. http://civilrightsdocs.info/pdf/education/new-education-majority/New-Education-Majority-Summary-FINAL.pdf

[viii] Baker, B.D. and Weber, M.A. (2019). New Jersey’s School Funding Reform Act at 10 Years. New Jersey Policy Perspective. https://njppprevious.wpengine.com/reports/in-brief-new-jerseys-school-funding-reform-act-at-10-years

 

New Jersey’s Budget Must Reject Austerity to Fund the COVID-19 Recovery

Posted on by Sheila Reynertson

The following testimony, on the FY 2021 Revised Budget, was delivered to the Senate Budget and Appropriations Committee on September 11, 2020.

Chairman Sarlo and members of the committee. My name is Sheila Reynertson and I am a Senior Policy Analyst at New Jersey Policy Perspective. I am also testifying as a member of the For The Many coalition, which seeks to enhance equity through the tax code and raise adequate revenue to meet the challenges facing the Garden State.

With the initial pandemic outbreak behind us and the likelihood of another outbreak this winter, all signs are pointing to a long, drawn-out economic recovery. Unlike New Jersey’s last recession, low-income workers and small businesses have been hit the hardest by this crisis with cut hours, layoffs, or businesses shutting down entirely. Job losses thought to be temporary are now becoming permanent, which may reduce low-income and middle-class families’ earnings for years to come. This reality must be at the center of the state budget negotiations.

In fact, we implore the legislature to adopt a long-term approach to the state budget this year, to consider not just the immediate 9-month plan but the next fiscal year as well. How New Jersey policymakers respond to the needs of New Jersey families over the next 21 months will have enormous economic consequences for decades to come.

The legislature has a choice: prioritize racial and economic equity by helping New Jerseyans through a tough economic downturn or continue giving away massive tax breaks to wealthy households and millionaires. New Jersey may not be able to control the timing or severity of a second wave of the coronavirus, but policymakers do have tools to prepare and respond more effectively. Here are our top recommendations.

First, protect the state programs needed to meet the demands induced by the pandemic and the economic crisis that is still unfolding. After years of disinvestment and deep cuts, services and programs that support workers, students, children, and families continue to be under- or flat funded. The damage done was far from being fully repaired and then a global public health crisis struck. Legislators must plan for the full impact that has yet to hit the state. If that means borrowing to shore up the surplus, so be it.

Next, raise revenue quickly while making our income tax more progressive. It’s time to think big and bold — and aim high. There is no good reason why earnings between $500,000 and $5 million are taxed at the same rate. By raising the income tax on the wealthiest 5 percent of households, our state budget will no longer be balanced on the backs of working and middle class families.

We recommend adding four brackets to the state’s income tax and increasing rates on the state’s wealthiest households. This would raise more than $1 billion in new revenue each year for education, aid to cities and towns, and property tax relief for struggling households. ​The tax increase would be paid almost exclusively by New Jersey’s ultra-wealthy, with the top 1 percent – households with average annual incomes of $2.4 million – paying 85 percent.

This tax reform would also make New Jersey’s tax system more equitable, finally undoing the tax code’s upside-down nature, in which low-income and middle-class New Jerseyans have historically paid greater shares of their incomes to state and local taxes than wealthy residents.

To those concerned about losing high earners to another state, consider this: Based on the growth trend of high-income households over the past two decades, there is no reason to treat millionaires like an endangered species. In fact, New Jersey has proven itself to be a healthy and sustainable habitat for them as the state continues to gain millionaire-earning tax filers every year.

Successful corporations have a stake in bringing back New Jersey’s economy. The 2017 Trump tax cuts were a huge giveaway to big corporations and pass-throughs. Given the extraordinary circumstances we are facing, it is vital to make the corporate business tax surcharge permanent as a reliable and sustainable source of needed revenue to ensure a full recovery. We also support the Governor’s proposal of a five percent surcharge on Qualified Business Income for individuals earning over $1 million in income generated by pass-throughs. This would recapture a substantial percentage of a very generous deduction gifted at the federal level. Even with the surcharge, these individuals would still come out ahead.

Finally, we encourage the legislature to take this opportunity to restore fiscal responsibility. Just as our pension obligation is non negotiable, so is our need for sustainable budgeting without resorting to raids of dedicated funds and gimmicky one-time revenue raisers. To get back on track, we must adopt good budgeting practices recognized by credit rating agencies, like prioritizing a healthy surplus and rebuilding the Rainy Day Fund to avoid deep, harmful cuts in the future. States should set aside about 16 percent of total general fund spending for emergencies, according to the Government Finance Officers Association. New Jersey currently has 0 percent in its Rainy Day Fund.

Finally, NJPP thanks the Legislature for enacting a state-level Health Insurance Assessment tax which largely recaptures the recently repealed annual fee on health insurance providers and will support subsidies for New Jerseyans purchasing health insurances. A small percentage of this windfall could also support efforts to make the remaining 80,000 uninsured children in New Jersey eligible for health insurance with the added bonus of $60 million in federal matching funds. We know these kids are at risk for poorer health outcomes and school performance. It’s time to cover all of New Jersey’s kids.

Thank you.

COVID-19 Job Loss Leaves More Than 100,000 New Jerseyans Uninsured

Posted on by Brittany Holom-Trundy

The COVID-19 pandemic has exposed the many weaknesses of a health care system that ties coverage tightly to employment. Two recent reports by Families USA underscore the catastrophic result: an estimated 124,000 New Jerseyans lost access to their health insurancedue to loss of employment in the first months of 2020 and were not able to enroll in coverage under Medicaid, a spouse’s coverage, or the individual insurance market. This means that a total of approximately 701,000, or 13 percent, of all non-elderly adults in the state were uninsured as of May 2020.[i] Alarmingly, this loss of insurance could lead to additional job losses: as revenue for health care decreases, another 86,000 jobs could be lost in New Jersey’s health care industry alone.

These striking numbers, while historic, could have been much worse if not for state and federal policies that have expanded access to health care. If New Jersey had not expanded Medicaid, as allowed by the Affordable Care Act (ACA), many more individuals would currently be uninsured. By expanding eligibility to previously excluded individuals —  including childless adults with income below 138 percent of the federal poverty level ($1,468 per month for a single adult in 2020) — the Garden State has a lower share of adults who are uninsured during the crisis than states that have not expanded Medicaid.[ii] The Families USA reports estimate that uninsurance rates for non-elderly adults in non-expansion states have reached levels as high as 29 percent (Texas), which could result in 362,000 additional job losses in the health care sector.[iii] With Census Bureau data showing that, nationwide, communities of color and low-wage workers have been most likely to lose insurance during the pandemic, Medicaid eligibility for these vulnerable populations has proven crucial to better addressing the fallout of the crisis.

During New Jersey’s pandemic lockdown, increases in NJ FamilyCare enrollment — New Jersey’s Medicaid and Children’s Health Insurance Program (CHIP) — show that the program serves as critical relief for many experiencing a loss of income. After an overall decline in enrollment in previous months, the COVID-19 pandemic led to a quick and significant surge in Medicaid enrollment numbers as disenrollment was frozen and hundreds of thousands of residents faced unemployment.[iv] From February to July 2020, total enrollment in NJ FamilyCare increased by 118,622 individuals, a jump of 7 percent. Enrollment in all non-Aged, Blind, and Disabled eligibility groups increased during the crisis as well. Most notably, enrollment for adult groups that became newly eligible under the Medicaid expansion rose significantly during the crisis, demonstrating that this safety net has successfully protected thousands of New Jerseyans that otherwise would have been uninsured after losing insurance through their employers.

How do we move forward?

Pandemics necessitate strong governmental responses. Leaders need to both support the health care system through crisis conditions and protect residents by slowing the spread of the outbreak. Viruses do not discriminate in whom they infect, but they do thrive on discriminatory structures within a country, feeding off of the disparities and shortcomings in our institutions and furthering the inequities present. Strengthening affordable health care options outside of employment, providing safe working conditions, improving access to basic needs like healthy foods, and increasing resources to deal with emergencies that low- and moderate-income families face should be prioritized.

By supporting the ACA, building more options for affordable coverage, avoiding cuts to critical services for vulnerable populations, and establishing guarantees of job retention in the midst of unsafe conditions, state lawmakers can demonstrate their commitment to a more equitable New Jersey. This is not the first crisis to challenge our existing social and economic systems, nor will it be the last. It is time for Garden State leaders to recognize the lessons of COVID-19 and to make sure that when another outbreak inevitably arrives, we are ready.

Appendix

ABD = Aged, Blind, and Disabled.
M-CHIP = Children under an extended income eligibility group in Medicaid that is funded by CHIP funds.
ABP = Alternative Benefit Plan. New Jersey’s adoption of Medicaid expansion introduced eligibility for all non-Medicare eligible individuals under age 65 (children, pregnant women, parents and adults without dependent children) with incomes up to 138 percent of federal poverty level (FPL) based on modified adjusted gross income.

 

End Notes

[i] It is important to note here that some of the individuals who were furloughed or who elected to move into COBRA coverage after losing employment may be delayed in their self-reported loss of coverage as they maintain benefits for a few to several months after employment. However, for low-income households, coverage under such programs as COBRA is often unaffordable.

[ii] While the ACA officially introduced eligibility for households below 133 percent of the federal poverty level (FPL), it was doing so for “modified adjusted gross income” (MAGI). In another part of the act, one modification introduced was a further five-point deduction from the FPL, effectively making the eligibility level 138 percent. More information on this distinction can be found here: https://www.shadac.org/news/aca-note-when-133-equals-138-fpl-calculations-affordable-care-act

[iii] This calculation does not cover the recent spikes in COVID-19 cases in many of the non-expansion states.

[iv] With the Families First Coronavirus Response Act, a Federal Medical Assistance Percentage (FMAP) bump was provided for states, given that they met particular requirements. One of these Maintenance of Effort (MOE) provisions required that Medicaid enrollees who might have otherwise lost eligibility due to “issues such as non-response to redetermination requests or changes in income” remain enrolled during the course of the crisis. Maintaining these enrollees while also taking in new enrollees accounts for a significant amount of the growth, as noted in the above linked New Jersey Department of Human Services monthly enrollment report. This helps to protect many who may have struggled to attend to redetermination requests or faced uncertain income levels during this time, in addition to those who have recently lost employment.

Unemployment Claims Rise as Federal Relief Expires

Posted on by Nicole Rodriguez

As New Jersey lawmakers cautiously reopen the state, unemployment insurance (UI) claims are back on the rise. To make matters worse, the federal relief provided in the Coronavirus Aid Response and Economic Security (CARES) Act, which provides an additional $600 in unemployment benefits for people who had lost their jobs because of the pandemic, expires this coming week on July 31, 2020.

Overall, the CARES Act contains many provisions that address the needs of laid-off workers, preventing families from experiencing severe financial harm. If this relief is not extended, it will be much harder for families to meet their basic needs, exacerbating poverty and worsening racial inequality. This won’t just hurt UI recipients and their families, it will hurt thousands more. The spending generated by that $600 is supporting over 1,000 jobs in New Jersey, meaning that these jobs will remain in the balance.

From mid-March through July 11, 2020 alone, New Jersey saw nearly 1.4 million UI claims and paid out approximately $10.7 million in benefits. In addition, nearly half a million more workers claimed Pandemic Unemployment Assistance (PUA), a federal rapid response program for workers who are not eligible for regular UI, like independent contractors and temporary workers.  Towards the end of May through mid-June, jobless claims remained stable in the 20,000s; however, these claims have surpassed 30,000 and 40,000 in the past two weeks. This past week, the state received 37,000 new UI claims and 19,000 new PUA claims. The future prosperity of the nation — including New Jersey — relies on consistent federal relief to keep laid-off workers, their families, and the broader economy afloat until the COVID-19 pandemic is under control.

Strengthen and Expand New Jersey’s Earned Sick Days Law

Posted on by NJPP Guests

This fact sheet was produced by the New Jersey Time to Care Coalition.
To read a PDF version of this fact sheet in English and Spanish, click here.

Why workers need emergency Earned Sick Days?

One of the most basic steps to protect public health during a pandemic is for people who are sick, or who have been exposed to the virus, to quarantine themselves, and the CDC recommends staying home for 14 days after possible exposure.[1] But that’s not always possible for essential workers unless they have access to enough paid sick days. New Jersey’s current earned sick day law provides only five days a year and employers can require that workers wait 120 days after the first day of work, and that they earn their time before they can use it. Employers can also ask for a doctor’s note for three or more consecutive days of absence. These burdensome measures make it harder for workers to access their paid sick days so that they can take care of their own health, stay home and protect others from exposure. We need to do more to protect essential and frontline workers and stop the spread of contagion, now or in the future, by strengthening and expanding our earned sick day law. 

The need for paid sick days, especially during a pandemic, was so evident that the U.S. Congress took action for the first time ever, passing the Families First Coronavirus Response Act (FFCRA) which provides workers with 10 paid sick days for reasons related to COVID-19.[2] However, the new federal law exempted employers with over 500 employees and virtually all health care workers. And while health care workers are included in the NJ Earned Sick Leave law, per diem health care employees are not. That means an estimated 58 percent of New Jersey workers do not have access to any of the federal protections including emergency paid sick days.[3] Many of these workers are low paid, working at grocery store chains, big box stores and warehouses, and some have reported working in unsafe conditions, potentially exposed to sick coworkers and members of the public. By making changes to improve the state Earned Sick Leave law, we can ensure all essential and frontline workers have access to both basic and emergency paid sick days. 

What does bill S2453 do?

Senate Majority Leader, Loretta Weinberg, the champion of the original Earned Sick Leave bill, has sponsored bill S2453 which improves the New Jersey Earned Sick Leave law by: 

  • Providing essential workers with 15 emergency paid sick days available immediately during a declared state of emergency. This would be for future possible pandemics or other emergencies and for the current COVID-19 emergency it is retroactive to March 1, 2020. 
  • Increasing the number of base earned paid sick days from 5 to 7 days.
  • Removing the burdensome 120 waiting period from a worker’s first day and when the employer must allow them to use the paid sick time that they have earned. As workers accrue their leave they should be able to take it. 
  • Including per diem health care employees (removes their previous carve-out from coverage). 
  • Changing employers’ ability to require a doctor’s note on the third consecutive day of absence to the fifth consecutive day and allows for telehealth documentation. 
  • Adding 2 days bereavement time as an allowable use under the law.

End Notes

[1] https://www.cdc.gov/coronavirus/2019-ncov/php/public-health-recommendations.html

[2]https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave

[3]https://www.americanprogress.org/issues/economy/news/2020/04/17/483287/coronavirus-paid-leave-exemptions-exclude-millions-workers-coverage/

COVID-19 Unemployment Claims Will Soon Surpass Total Claims from the Great Recession

Posted on by Nicole Rodriguez

To read a PDF version of this policy brief, click here.

The public health crisis created by the COVID-19 pandemic has caused an unprecedented demand in unemployment insurance (UI), a program that compensates eligible workers who have been recently laid off due to no fault of their own. Since the beginning of March 2020 through April 25, 2020, New Jersey saw over 930,000 UI claims.[1] This is about a 1,500 percent increase in claims, when comparing April to February.[2] While federal action will be integral to support vulnerable workers and those who are now unemployed, New Jersey must also act fast to ensure that no workers are left behind in the state’s recovery.

To better understand the magnitude of this record-breaking increase, NJPP compares UI claims seen in the current recession, which we refer to as “The Great Lockdown,”[3] to the past two recessions: the Great Recession, which lasted from December 2007 through June 2009, and the Early 2000s Recession that ran from March 2001 through November 2001.[4]

Unemployment claims made in the first weeks of the COVID-19 pandemic drastically surpass any week of the previous recessions. In fact, the total number of claims made in the current recession is over three quarters of claims seen during the entirety of the Great Recession and almost twice the amount seen during the entire early 2000s recession.[5] We expect that the total claims made by the end of May will surpass all the jobless claims made during the Great Recession.

A screenshot of a cell phone Description automatically generated

Another way to understand the magnitude of job loss resulting from COVID-19 is to determine how much of the labor force has filed jobless claims. As seen below, so far, a record-breaking 7.4 percent of the labor force has applied for job loss claims in March, and this is expected to rise in April, when new labor force data is available.

The overwhelming number of UI claims has placed an enormous strain on the state’s Department of Labor and Workforce Development, the agency tasked with administering these benefits. New Jersey’s UI system is collapsing under the weight of so many applications, due in part to dated technology and a department staff that is 25 percent lower than it was over a decade ago.[6] Job loss also strains other agencies, such as the Departments of Health, Human Services, and Community Affairs, as many workers have also lost their employer-provided health insurance and need additional assistance to pay for essentials like food and rent.

To meet this increased demand for safety net programs, relief packages from the federal government — such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act — are critical. The CARES Act made necessary expansions to state UI programs to help relieve some of the economic decline caused by the COVID-19 pandemic.[7] It includes Pandemic Unemployment Assistance, which expands benefit eligibility for those not eligible for their state UI program, such as self-employed workers, independent contractors, and part-time workers. It also contains Pandemic Unemployment Compensation, which increases the maximum unemployment benefit above one’s base unemployment compensation benefit through July 2020 by $600 per week. Finally, it includes Pandemic Emergency Unemployment Compensation, which extends unemployment benefits for an additional 13 weeks.

The CARES Act relief package will not be enough, however. New Jersey cannot meet all these immediate and approaching needs on its own, especially since the state does not have a sufficient Rainy Day Fund or any major progressive tax strategies to raise sufficient revenue. In fact, the state may likely borrow federal funds to cover unemployment claims, in addition to cover revenue shortfalls.[8] From the beginning of March through April 25, the state has distributed about $1.4 billion in unemployment related claims.[9] 

These record-breaking UI numbers also severely undercount the extent of job loss in New Jersey, as not all workers are eligible for unemployment assistance and are thus not filing claims. For instance, undocumented workers, who make up over 15 percent of the workforce in industries most affected by COVID-19, are excluded from much of the relief provided by the federal government. What’s more, other immigrant workers must have valid work authorizations during the base period,[10] at the time they apply for benefits, and throughout the period that they are receiving benefits,[11] making it more difficult to qualify. If New Jersey fails to step in and prioritize these workers throughout its recovery, the economic fallout will be much worse. (For more see, NJPP’s Undocumented Workers in Service Sector Most Likely to be Harmed by COVID-19.

Job loss claims are just one indicator to understanding the extent of this health pandemic and the repercussions that will be felt throughout the economy. Currently, they understate the impact of the virus. These claims are expected to rise beyond what most of us have seen in our lifetimes. To respond to this unprecedented surge in job loss, it is imperative that the state step in and ensure that no worker or family is left behind.

End Notes

[1] U.S. Department of Labor, Unemployment Insurance Weekly Claims Data for New Jersey. Accessed 4/30/2020 https://oui.doleta.gov/unemploy/claims.asp

[2] U.S. Department of Labor, Unemployment Insurance Weekly Claims Data for New Jersey. Accessed 4/30/2020 https://oui.doleta.gov/unemploy/claims.asp

[3] NJPP analyzes UI claims starting the first week of March 2020 to determine the start of the Great Lockdown for NJ.

[4] The National Bureau of Economic Research, US Business Cycle Expansions and Contractions. 2010. https://www.nber.org/cycles.html

[5] Total UI claims for Early 2000s Recession is about 399700 and for the Great Recession is about 1,088,000. U.S. Department of Labor, Unemployment Insurance Weekly Claims Data for New Jersey. Accessed 4/24/2020 https://oui.doleta.gov/unemploy/claims.asp

[6] New Jersey Policy Perspective, Years of Disinvestment Hamper New Jersey’s Pandemic Response. April 2020. https://www.njpp.org/budget/years-of-disinvestment-hamper-new-jerseys-pandemic-response

[7] U.S. Department of Labor, Unemployment Insurance Relief During COVID-19 Outbreak. 2020. https://www.dol.gov/coronavirus/unemployment-insurance

[8] POLITICO New Jersey, Murphy: New Jersey likely to borrow federal funds to cover unemployment. April 25, 2020. https://subscriber.politicopro.com/states/new-jersey/whiteboard/2020/04/25/murphy-new-jersey-likely-to-borrow-federal-funds-to-cover-unemployment-9422713

[9] New Jersey Department of Labor, Unemployment Payments Surpass 500K; $1B in Benefits Distributed Since Pandemic Began. April 30, 2020. https://www.nj.gov/labor/lwdhome/press/2020/20200423_weeklypayments500k.shtml

[10] Base period is the recent work history timeframe used to determine if one qualifies for UI benefits and to calculate the benefit amount. 

[11] National Employment Law Project (NELP), Immigrant Workers’ Eligibility for Unemployment Insurance, April 2020. https://www.nelp.org/publication/immigrant-workers-eligibility-unemployment-insurance/

Undocumented Workers in Service Sector Most Likely to be Harmed by COVID-19

Posted on by Janice R. Fine

To read a PDF version of this policy brief, click here.

Since the onset of the COVID-19 pandemic, New Jersey workers and businesses alike have faced mounting and unprecedented challenges. Public health precautions meant to contain the spread of the outbreak, like necessary business closures and stay-at-home orders, have disrupted the state’s economy, especially the service sector that relies on server-customer interactions. Immigrant workers, who make up a disproportionate segment of the service sector workforce, will likely be hit hardest by the COVID-19 pandemic. These same workers are excluded from much of the relief provided by the federal government. 

The industries most hurt by the necessary social distancing and public health directives include restaurants, bars, hotels, entertainment, non-food retail, passenger transportation, and personal care services. Taken together, these industries accounted for nearly 800,000 jobs in 2018, representing almost a quarter of New Jersey’s private-sector employment at 22.9 percent. These industries also accounted for $25.9 billion in annual payroll, or 11.4% of total private sector income.

The majority of these jobs are low-paid, with annual earnings significantly lower than the state average. Due to decades of racial and ethnic discrimination, these industries are a key source of employment for low-income workers, immigrants, and communities of color. Undocumented immigrants, who make up approximately 6 percent of New Jersey’s population, account for a disproportionate 15.7 percent of the workforce in these service sector industries.[1] In total, there are approximately 125,000 undocumented workers employed in the service sector industries that are most likely to be harmed by the pandemic.

To contextualize the high percentage of immigrant workers in service sector industries, a 2017 report by Janice Fine, Director of Research and Strategy at the Center for Innovation in Worker Organization (CIWO) at Rutgers, finds:

“[The] de-unionization and erosion of labor markets preceded the arrival of immigrants. The shift to non-union subcontracting is what led native workers to leave those jobs. The industries then shifted to immigrant labor, but labor standards in the industries had dramatically diminished. This deterioration of labor markets and working conditions, however, cannot be understood as an inevitable product of market forces. Much of the change has been shaped by a combination of firm management practices, outdated employment laws, and the lack of effective labor standards enforcement.”

As the COVID-19 pandemic and resulting economic downturn rage on, it will be critical for New Jersey policymakers to implement policies that improve working conditions across all sectors, especially the industries that contain a larger share of the low-paid workforce. Past recessions have worsened inequality as governments responded with austerity policies that cut taxes for wealthy families and corporations and failed to support low- and middle-income families with vital relief. This approach has led to major negative impacts on the health and general well-being of low-income and middle-class families, especially for immigrants. If the state’s policy response doesn’t prioritize these families throughout its recovery, they are sure to fall even further behind. 

End Notes

[1] NJPP analysis of total unauthorized population in New Jersey and total state population. Migration Policy Institute, Profile of the Unauthorized Population: New Jersey. https://www.migrationpolicy.org/data/unauthorized-immigrant-population/state/NJ; U.S. Census Bureau, Population Division, Table 1. Annual Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico: April 1, 2010 to July 1, 2019. https://www.census.gov/data/tables/time-series/demo/popest/2010s-state-total.html#par_textimage_1574439295

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