- Paul Constant is a writer at Civic Ventures, a cofounder of the Seattle Review of Books, and a frequent cohost of the “Pitchfork Economics” podcast with Nick Hanauer and David Goldstein.
- In the latest episode of the podcast, they spoke with two experts about how COVID-19 is impacting Americans differently depending on their wealth, race, and gender.
- Even pre-COVID-19, black women were “losing out on $US50 billion per year” compared with white men at the same levels of education and expertise, said expert labour market analyst Michelle Holder.
- Heather Boushey, the president and CEO of the Washington Centre for Equitable Growth, said that the best way to protect underrepresented communities is nationalizing access for “everything from paid sick days to healthcare.”
- Visit Business Insider’s homepage for more stories.
Going into the year 2020, would you have characterised the American economy as strong? If so, you’re certainly not alone.On the latest episode of “Pitchfork Economics,” Heather Boushey, president of the Washington Centre for Equitable Growth, said most Americans in the time immediately before the coronavirus believed the economy was booming.
“If you just looked on the surface, our economy seemed strong,” Boushey admitted. “We definitely had this very low unemployment rate,” and plenty of other indicators suggested that a recession was nowhere in sight.
Still, Boushey and other economists had reason for concern. “We were worried that wages weren’t rising as fast as they should have given the low unemployment,” she said, but she had a hard time convincing some economists, pundits, and much of the general public to care about that, when every cable news business channel seemed to be a nonstop party celebrating record corporate profits that seemed to climb and climb with no end in sight.
“There were a lot of folks who didn’t seem to think that there was much wrong with the economy,” Boushey said. “And yet there were millions who could see the underlying fragilities.”
If you were to ask a minimum-wage level employee back in the boom-times – say, January of 2020 – what they thought of the economy, they’d likely have given you an earful of complaints. Back in the good old days of January, millions of Americans had no health insurance, no guaranteed paid sick time or paid family leave, and four in 10 Americans didn’t have $US400 in a savings account to cover an emergency expense.
And now here we are in the middle of an emergency unlike any in living memory. Long breadlines and skyrocketing unemployment numbers are all over the same news channels that less than half a year ago were trumpeting the longest period of economic growth in American history. The truth is that these menacing fractures of inequality were expanding through the economy the whole time, and coronavirus only worsened what was already there.
“Those at the very, very top of the wealth distribution saw their wealth come back fairly quickly after the Great Recession,” Boushey explained. But “for the vast majority of American families, that that wasn’t the case. And too many have still never recovered the wealth that they lost.”
Without that foundation of emergency savings, good health care, and paid time off, poorer Americans were vulnerable to the slightest bump in the road. So when the economy ran into a brick wall, the economic carnage here was worse than in most other advanced nations. And because the federal government’s response to the pandemic has been confused and lacklustre, those economically vulnerable Americans are in even greater risk now that governors around the country are experimenting with “reopening” economies.
“Those families and those workers and those small business owners who have the least to fall back on are going to be the first to put themselves and their families in danger of contracting coronavirus because they need to get back to work faster than anyone,” Boushey explained.
Michelle Holder, an assistant professor of economics at John Jay College of Criminal Justice, has done extensive research which demonstrates the economic downturn has had an outsized impact on communities of colour. Even before the crash, she explained, “women were paid less than men, Blacks were on average paid less than whites, and the intersection of the two – black women – was actually among the lowest-paid demographic groups.”
Holder is the author of a jaw-dropping study that found the aggregate financial impact on black women in the year 2017 – that is, the amount of money that they didn’t earn when compared to the earnings of white men of the same educational and experiential background – was around $US50 billion.
“And so if you’re talking about a community that is losing out on $US50 billion per year,” Holder said, those impacts worsen dramatically during a pandemic. “It just makes these groups less likely to be able to survive when things like COVID-19 wreck and ravage our economy.”
In the same way that the pre-COVID economy was booming or busting depending on who you asked, this downturn looks different to Americans of different experiences. If you’re an educated white woman from a middle-class background, your coronavirus experience is more likely to be a series of inconveniences than the full-on disaster that impoverished Americans are experiencing. And white men are likely to experience a vastly different economic downturn than black women.
This matters because the people who control the levers of power – the experts and leaders who guide our economic response – are largely white and male. The crisis that they’re responding to is different than the crisis experienced by less privileged groups. So how do we build a more equitable economic recovery?
“First, we need to make sure that we are connecting the dots between how we think about the health of this thing we call the economy and the health of the people that really are the economy,” Boushey said. This means providing universal access to “everything from paid sick days to healthcare and making sure that people are safe on the job.”
Holder argued that employers need to do more to address “pay disparity issues based on gender and based on race.” Policymakers should take a serious approach to legislating pay equity, ensuring that all employees with similar backgrounds and experiences are paid at similar rates.
The public health crisis caused by coronavirus is very similar to the economic crisis caused by coronavirus. Until we make sure that the most vulnerable members of our society have access to medical care and healthy homes and workplaces, we won’t be free from the virus. And until our economy includes everyone as participants, we will be vulnerable to dramatic collapses that imperil us all.
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