you are here: HomeNewsWorld

Job or health? Restarting the economy threatens to worsen economic inequality

The coronavirus recession has exacerbated the racial and income divides in America. Lifting restrictions too soon will make them worse and leave workers with a bleak choice

April 28, 2020 / 05:48 PM IST
Representative Image

Representative Image

Efforts to quickly restart economic activity risk further dividing Americans into two major groups along socioeconomic lines: one that has the power to control its exposure to the coronavirus outbreak and another that is forced to choose between potential sickness or financial devastation.

It is a pick-your-poison fact of the crisis: The pandemic recession has knocked millions of the most economically vulnerable Americans out of work. Rushing to reopen their employers could offer them a financial lifeline, but at a potentially steep cost to their health.

State and federal officials have nowhere near the testing capacity that experts say is needed to track and limit the spread of the virus, and there is no vaccine yet. But states are already reopening, urged on by President Donald Trump, who is eager to restart the US economy.

To track all live updates from the coronavirus pandemic, click here

That push is likely to exacerbate long-standing inequalities, with workers who are college educated, relatively affluent and primarily white able to continue working from home and minimising outdoor excursions to reduce the risk of contracting the virus.

Close

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

Those who are lower paid, less educated and employed in jobs where teleworking is not an option would face a bleak choice if states lift restrictive orders and employers order them back to work: expose themselves to the pandemic or lose their jobs.

That disempowered group is heavily black and Latino, though it includes lower-income white workers as well.

“It’s sad and scary,” said Tina Watson of Holly Hill, South Carolina, who has seen her hours cut in half at the Wendy’s where she works. Though her income has dropped from that cutback, she is worried about having to interact with customers when the state relaxes limits that have forced the restaurant to operate as drive-through only in recent weeks. “I’m feeling like my life is at risk if they open up our dining,” Watson said.

A growing share of workers is increasingly stuck with that choice.

The governors of Georgia and South Carolina have begun allowing some businesses to reopen, even though both states continue to see new infections and what the Centres for Disease Control and Prevention call ‘widespread’ community spread of the virus.

On April 24, Govenor Brian Kemp of Georgia allowed gyms, nail and hair salons, and bowling alleys to begin operating, with restaurants and movie theaters allowed to open on April 27. Colorado, Minnesota, Mississippi and Ohio are also allowing some businesses to start operating again.

Rashad Robinson, the President of the racial justice advocacy group Color of Change, said Georgia’s governor “has targeted a whole set of businesses where black people both work and patronise.” For those workers and customers, he said, “it is an absolute death sentence.”

“The inequality we’re seeing isn’t unfortunate like a car accident,” Robinson said. “It’s unjust. It’s being manufactured through a whole set of choices.”

Even though they face higher risks from reopening, a small but meaningful share of financially hurt workers is clamouring to return to work. One in 11 Americans, according to national polling data by the digital research firm Civis Analytics, have lost a job, hours or income — or know a family member who has — during the pandemic but oppose mandatory lockdowns.

Americans who earn $50,000 a year or less are more than twice as likely to say they or a family member have lost jobs amid the crisis as those who earn more than $150,000, the polling found. Higher earners and whites are far more likely to say they can work from home during the pandemic than lower earners and black and Latino Americans, according to an April poll for The New York Times by the online research firm SurveyMonkey.

Black and Latino Americans have less ability to withstand a prolonged job loss than whites, because they entered the crisis with lower incomes and less wealth. The median black household had just under $18,000 in wealth in 2016, Federal Reserve statistics show, while the median Hispanic household had just under $21,000. The median white household had nearly 10 times more: $171,000.

In 2018, the typical Hispanic household earned three-quarters of what a typical white household earned, according to census data. The typical black household earned three-fifths of what the typical white household earned, and their household income had yet to return to pre-financial-crisis highs.

The virus has only exacerbated that inequality, with minorities suffering both higher death rates and more financial harm.

In New York City and across the country, black and Latino Americans are dying at higher rates from the virus than whites. Economic polling data shows they are also losing their jobs and income to an outsize degree. In Minnesota, the share of black workers filing for unemployment over the last month is nearly 50 percent higher than the share of white workers.

The Civis Analytics polling over the last several weeks found that black and Latino Americans were far more likely than whites to report that they had lost a job or income from the virus, or that it had caused them to miss a rent or mortgage payment or face eviction.

Calculations by the Centre for Economic and Policy Research found that black and Latino Americans were overrepresented in many ‘essential’ jobs of the pandemic, like grocery store clerks and delivery drivers. In New York City, three-quarters of front-line workers in the pandemic were Americans of colour. Nationwide, about one in five black workers were in the health care industry last year, compared with about one in eight white workers, Bureau of Labour Statistics data shows.

The risks and damage from the virus are “disproportionately landing on the black and brown workers that are disproportionately in minimum-wage services jobs,” said Mary Kay Henry, the President of the Service Employees International Union.

Researchers from the JPMorgan Chase Institute warned this month in a report that the coronavirus recession would hit black and Hispanic families harder in terms of lost income, forcing them to cut back their spending to a greater degree than whites, because black and Hispanic families have fewer savings to fall back on.

Follow our full coverage of the coronavirus pandemic here

“There could be immense and devastating income effects that could be involved with this evolving depression,” said William A. Darity Jr, an economist at the Sanford School of Public Policy at Duke University, who is a leading scholar of economic discrimination in the United States. Inequality, he said, “has been horrendous in recent years, and I can only imagine those disparities would get worse.”

c.2020 The New York Times Company
New York Times
first published: Apr 28, 2020 05:48 pm

stay updated

Get Daily News on your Browser
Sections