Virtual Hearing - Promoting Economic Recovery: Examining Capital Markets and... (EventID=110888)

Virtual Hearing - Promoting Economic Recovery: Examining Capital Markets and... (EventID=110888)

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On Wednesday, July 8, 2020, from 12:00 p.m. (ET) Subcommittee on Investor Protection, Entrepreneurship and Capital Markets Chairman Sherman and Ranking Member Huizenga will host a virtual hearing entitled, “Promoting Economic Recovery: Examining Capital Markets and Worker Protections in the COVID-19 Era."
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Witnesses for this one-panel hearing will be:

• Hon. Dr. William E. Spriggs, Chief Economist, AFL-CIO; Professor of Economics, Howard University
• Anne Simpson, Director of Board Governance and Strategy, California Public Employees' Retirement System
• Camille Busette, PhD, Senior Fellow and Director of the Race, Prosperity, and Inclusion Initiative, The Brookings Institution
• Neil L. Bradley, Executive Vice President and Chief Policy Officer, Chamber of Commerce of the United States of America

Since the start of the COVID-19 pandemic, millions of American workers have faced severe economic hardship due to lost jobs and wages. According to the Federal Reserve, more than 20 million Americans have lost their jobs due to COVID-19, 19.8 million of whom were private sector workers. Federal Reserve Chair Jerome Powell testified that “the rise in joblessness has been especially severe for lowerwage workers, for women, and for African Americans and Hispanics.”3 As of July 2, the national unemployment rate stands at 11.1 percent. According to the most recent outlook from the Congressional Budget Office, the unemployment rate is expected to peak at over 14 percent in the third quarter of 2020 before declining through 2021. Further, the latest Monetary Policy Report by the Federal Reserve indicates that the longer the crisis lasts, the greater the impact may be on workers because those who find a new employer after a temporary layoff, as opposed to returning to a previous employer, tend to experience long-term wage decline. Despite this economic turmoil among workers, the stock market has generally recovered from the losses that resulted from the shock of the COVID-19 pandemic. As of July 6, the S&P 500 and Dow Jones have both climbed over 40% from the market lows seen in late March.

Many of the job losses experienced since the start of the pandemic have taken place at large, public companies. As a result of either bankruptcies or workforce reductions, major companies including AT&T, Macy’s, Chevron, Boeing, Uber, United Airlines, Hertz, Disney, and GE have each announced layoffs of 2,500 or more employees since March. These companies are reducing their workforces to cut costs throughout the crisis, but earlier in the year many of the same companies spent billions in aggressive stock buyback programs to distribute capital to shareholders by repurchasing their own stock. In 2018 alone, S&P 500 companies spent a total of $830 billion on stock buybacks.

For healthcare workers and other essential workers who have continued to work, the pandemic has taken a unique toll. Hundreds of healthcare workers have died, and thousands have tested positive for the coronavirus. As states reopen and cases continue to increase, concerns are growing about impending protective equipment shortages. Meanwhile, grocery store workers are struggling to access information and testing necessary to protect themselves. Workers have reported being expected to work alongside people with symptoms, and many businesses are failing to provide their employees with proper protections or compensation for working during a health crisis.

CARES Act and Worker Protections
On March 27, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which made available over $500 billion in financial assistance for U.S. businesses through a variety of programs. The law generally mandates that companies benefiting from this assistance be required to temporarily suspended stock buybacks, dividend payments, and increases in executive compensation above certain thresholds. The law further requires that certain companies, including commercial airlines, which receive direct assistance from the Treasury Department maintain 90 percent of their workforce.

The CARES Act also encouraged the Treasury Department to work with the Federal Reserve to establish a facility for mid-size companies, with between 500 and 10,000 employees, and included conditions that recipients must remain neutral in any union organizing effort, and are prohibited from outsourcing any jobs or abrogating any existing collective bargaining agreement....

Hearing page:
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