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Relief Bill Update: COVID-19 and the L.A. Gig, Small Business Economy - LA Weekly

Updated March 25, 2020, noon: Early Wednesday morning, the White House and Senate leadership came to an agreement on a $2 trillion relief bill. If passed, the legislation will be the largest economic aid enacted in modern U.S. history. Some points to note about this new bill that affect gig workers and small business:

  • Individuals making up to $75,000 a year receive direct payments of $1,200, while couples making up to $150,000 receive $2,400, with an additional $500 per child. The payments decrease for those earning more than $75,000, and there’s an income cap of $99,000 for individuals or $198,000 for couples.
  • The maximum state unemployment benefit is increased by $600 per week for up to four months and these benefits would also be extended to those who typically do not qualify, such as gig economy workers, furloughed employees and freelancers.
  • Roughly $350 billion goes toward loans for small businesses. Companies with fewer than 500 employees can apply for $10 million in forgivable small-business loans. Small businesses that maintain payroll can also ask for assistance with mortgage interest, rents and other bills.

Freelancers, indie businesses and those who qualify as independent contractors were having a hard enough time making ends meet in the wake of Assembly Bill 5 — the California law that imposed limits on those who do not work traditional 9-to-5 jobs. Now, COVID-19 is pretty much obliterating what was left of the gig economy, shutting down essentially every industry where people earn money through non-union work.

As of this posting, the government was still going back and forth trying to agree on a national relief plan. The initial proposal once again ignored this essential group of workers. Its focus on corporations, as well as issues such as alack of oversight for a big chunk of the allotted funds, led it to quickly being rejected by Democratic reps. For those who contribute to the local economy via more unconventional means, the lack of help for independent Americans— a vital part of the workforce that contributes an excess of $1 trillion to our country’s economy, according to the recent Freelancing in America survey — was troubling.

Independent contractors and the self-employed are in fact one-third of the U.S. workforce. American Etsy sellers alone, for example, brought in an estimated $6.2 billion last year. But they can’t collect unemployment if they get sick. Same for many of the freelance writers whose work runs in L.A. Weekly. While attempts to protect this sector from exploitation might have been well-intentioned, AB 5 saw many people who were making ends meet, and in many cases thriving, with non-traditional work suddenly lose their revenue options or suffer major reductions. Journalists, for example, were limited to 35 writing jobs per outlet, which meant columnists were cut or reduced at publications such as this one. As of right now, these limitations have yet to lifted even in this time of financial crisis.

Sadly, it is all the creative fields that suffering the double whammy blows of AB 5 and  COVID-19 restrictions —from various craftspeople and artisans to photographers and musicians to writers and editors to drivers and beauty service providers and on and on, not to mention those who pursue these passions and work in the food, bar and nightlife industry to facilitate their creative interests. These people will be left out in the dust if a relief package is not devised that moves money away from corporate bailouts and toward the people who need it.

Nancy Kwon plies her trade at the Copper Still; Credit: Lesley Jacobs Solmonson

(Lesley Jacobs Solmonson)

As Etsy CEO Josh Silverman said in a Fortune piece last Friday, some of the essential points that need to be addressed in an acceptable relief package right now include: unemployment protection, tax and debt difference, direct assistance, disaster relief and relief beyond the proposed $1,200-2,000 for every American, because let’s face it: This amount just is not enough to make that much of a difference for a lot of us in the long run.

The proposed $2 trillion Coronavirus Rescue Bill that was blocked in the Senate now sees both sides attempting to reach a bipartisan agreement. As disagreements on financial assistance priorities — families versus businesses — reach a boiling point, the hope of quick relief was beginning to fade as of last night, but today it’s looking a little more hopeful based what Senate Minority Leader Chuck Schumer shares this morning. In order for the bill to pass, a three-fifths threshold for cloture must be reached; Monday’s vote was 49-46, the second time the coronavirus stimulus package failed on the floor.

“The Senate Republicans’ bill, as presented, put corporations first, not workers and families,” said House Speaker Nancy Pelosi in a release following Monday’s vote. “Today, House Democrats will unveil a bill that takes responsibility for the health, wages and well-being of America’s workers: the Take Responsibility for Workers and Families Act.”

The Dem’s stimulus bill requires that any corporation taking taxpayer dollars must protect their workers’ wages and benefits — strengthening unemployment insurance and providing small businesses with fast economic relief in the form of emergency grants and loans. It also provides hospitals the needed funds to protect healthcare workers and provide treatment for the sick. For American families, Pelosi proposes direct payments in a “robust way,” as well as strengthening child tax credits and the earned income tax credit. The relief package would guarantee paid family and medical leave. The proposed bill also makes coronavirus treatment free for patients.

Credit: Lucy Rendler-Kaplan

(Lucy Rendler-Kaplan)

While they hammer all this out in D.C., at least our local government is taking some action. Mayor Eric Garcetti ordered a moratorium on both residential and commercial evictions of Angelenos that are unable to pay rent due to circumstances related to COVID-19. Those who have lost gigs or had their workload reduced can also utilize the new lajobportal.com. The website is described as a “one-stop shop” for those who have found themselves unemployed or underemployed as a result of coronavirus, featuring resources for healthcare, employment and emergency assistance.

Other measures that Garcetti hopes will offer a small bit of economic relief for the city include temporary relaxed enforcement of street sweeping restrictions in residential areas, extended grace periods for timed parking for those running essential errands like picking up groceries, and a freeze on parking fine increases for the next 60 days. All those who are currently in the possession of a fine have an immediate extension on all deadlines for payment until June 1.

“We’re in this together, and I don’t want anyone worried about extra financial burdens at a moment when Angelenos have their minds on the health and well-being of family and friends,” said Garcetti.

The mayor has also announced an $11 million economic relief package for small businesses impacted by the pandemic, paid out to local business owners in no-fee microloans of $5,000 to $20,000. The loans are to be used to cover working capital, including maintaining employee and independent contractor income. The business microloans have no credit score minimum and a 100 percent loan-to-value ratio. Interest rates vary from 0 percent for a term of six months to one year, or 3 percent to 5 percent for a term of up to five years. More information about applying for a loan can be found here.