Minnesota’s economy is about to get walloped because so many workers can’t do their jobs at home. Jobs which require a physical presence, like retail and food service, will mostly be without income for the foreseeable future.

To make matters worse, workers in these industries are the least likely to have significant savings or financial cushion. According to the Minnesota Department of Economic Development, over 480,000 Minnesotans work in food service and retail alone. Since many of these workers are not full time, they lack benefits like employer-sponsored health care. For example, nationally just 22% of part-time workers had employer access to health care, according to the Bureau of Labor Statistics.

Only the federal government — with its ability to borrow massive sums — can effectively respond to what will likely be an economic calamity for a significant portion of the population.

Congress is fighting over how exactly to help the economy. A massive aid package failed a Senate procedural vote Sunday. The New York Times reports Democrats say it didn’t do enough for workers or impose restrictions on businesses being bailed out.

Still, the debate appears to be moving in the right direction: Send Americans money until the pandemic passes.

Lawmakers have already passed two aid packages and are considering another even bigger one.

The first was $8.3 billion for vaccine research. The best thing for the economy would be for people to stop getting sick, so this is a sound investment.

The second federal response provides paid leave benefits to workers at small to medium size businesses of between 50 and 500 employees. The caveat to this is that the first 10 days of leave “may be unpaid” according to the bill, meaning many workers would go without pay exactly when they need it most.

The measure also loosens some restrictions on food stamps and other food assistance programs, which President Donald Trump sought to cut late in 2019.

This package will help tide some workers over, but given the expected length of “social distancing” and closed restaurants, retail outlets and factories, it does not provide the bridge that most people need.

The third package is expected to approach $1 trillion, including direct payments sent to every American.

Sending checks directly to Americans mirrors a 2008 federal measure amid the beginnings of the Great Recession. It’s also a pale imitation of a novel policy idea known as “universal basic income” pushed by some economists, Silicon Valley impresarios and the presidential campaign of Andrew Yang.

Back to 2008: Congress approved a measure to send out $120 billion dollars in stimulus checks, including $600 to individual taxpayers, $1,200 to married couples and $300 to households for every dependent child.

Governments attempt to stimulate the economy in downturns because consumers aren’t spending and businesses aren’t investing. That makes government the spender of last resort — the only institution that can get things moving again.

The 2008 stimulus check program had mixed results. Just 20% of those who received checks spent the money, while 32% saved the money,and 48% used it to pay off debt, which is like saving it because the money isn’t being used to immediately stimulate new economic activity.

Ultimately, it was far too small to make up for collapsing consumer demand, and many Americans who feared where the economy was going saved the money, which did not spur the intended economic activity.

We don’t know how Americans would react after they receive checks this time. The millions of Americans who already live paycheck-to-paycheck and have already been laid off or furloughed would likely spend the money on rent and food, which would help landlords pay their lenders and keep the food distribution system intact.

The current proposal being considered is more than double the size in money directly sent to consumers as that 2008 measure, and also includes small business assistance and bailouts of certain vulnerable industries like airlines.

Temporary Universal Basic Income

There have been a litany of studies on universal basic income, or UBI. There’s no consensus among economists on the idea, though it has drawn support from both economists on both the left and right, including Milton Friedman,

The idea is to give people a basic level of support without them having to deal with complicated bureaucratic processes to prove they need it. And, with their basic needs met, they can then use their brain power on innovative and creative endeavors rather than just survival.

Critics say it would encourage idleness and tampen people’s sense of industry, though studies on UBI pilot programs around the world like in Finland have thus far not supported that view.

And in the case of the COVID-19 response, that’s obviously an irrelevant argument. We don’t want people working right now.

Instead of a one time payment, Congress should institute a temporary UBI. That certainty would let people know they can use the money — rather than hoarding it — for rent and food and other consumer goods, which will keep the economy moving. It would also allow them to stay home from work so they don’t get infected or infect others, while seeking medical care if they need it.

The program could be pegged to the unemployment or growth rate, so that individual and families would be insulated from income shocks until the economy comes back to life.

This would soften the blows to income for those who work at a “must-be-physically-present” job, who are experiencing layoffs or reduced hours.

If, however, Congress applies a fiscal band-aid to the situation, people may simply choose to saved their money because they are faced with an uncertain economic future.

By providing economic certainty via a UBI, we can give consumers power to weather the storm.

And then we can use the results of a real life test of UBI to enact a permanent one.