Coronavirus exposes scars of Great Recession

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The coronavirus and the desperate economic measures used to fight it are exposing some of the wounds inflicted during the Great Recession.

While some Americans may be able to recover quickly when the pandemic subsides, the outbreak poses bigger threats to vulnerable communities that didn’t benefit as much as others from the past 10 years of economic growth.

The recovery from the 2007-09 financial crisis and recession paved the way to record lows in unemployment for African Americans and Latinos, with women exceeding men as a share of U.S. workers. At the same time, the combination of slow wage growth and a massive rise in equity and housing prices widened both income inequality and the racial wealth gap.

More than a decade later, the pandemic is threatening to drive similar economic wedges between classes and races as the country braces for a grueling climb from the depths of the downturn.

“These are not equalizing crises. These crises have only spread people further apart,” said Mehrsa Baradaran, a University of California, Irvine, law professor who studies banking law and financial inclusion.

“The more wealth you have, the less likely you are to lose in crisis. The less wealth you have, the closer you are to absolute destitution and unemployment in a crisis.”

More than 26 million Americans have filed for unemployment benefits since mid-March as businesses across the country shuttered and began to layoff workers. Economists say that the unemployment rate is close to 20 percent and will likely remain in double digits through the end of the year.

The economic devastation caused by the pandemic has pushed President Trump and other political leaders toward easing restrictions that have forced millions of Americans to stay home and slow the spread of COVID-19.

Georgia Gov. Brian Kemp (R) cleared businesses such as barbershops and nail salons to reopen Friday despite the state reporting more than 600 new coronavirus cases in the day leading up to the opening.

As the U.S. inches toward reopening the economy, experts say that much of the risk in doing so will be borne by the most vulnerable Americans.

A disproportionate number of African Americans and Latinos have contracted and been hospitalized for COVID-19, an increasingly urgent focus for public health officials crafting the response to the pandemic.

Experts attribute the stark racial differences in coronavirus cases to the legacy of public policy decisions that have left communities of color with relatively higher levels of diabetes, hypertension and other risk factors for COVID-19 complications — not the personal choices or health traits of those groups.

“I and many black Americans are at higher risk for COVID,” U.S. Surgeon General Jerome Adams said earlier this month, noting he is prediabetic and has high blood pressure, asthma and heart disease.

“I represent that legacy of growing up poor and black in America,” Adams said.

The same communities facing the highest levels of COVID-19 cases are also less likely to be able to work from home or draw from savings to replace lost wages, potentially forcing at-risk individuals to make dangerous choices to stay afloat.

Fewer than one in five African Americans and roughly one in six Latinos have the option to work from home, said Danyelle Solomon, vice president of race and ethnicity policy at the Center for American Progress, a liberal think tank.

“Those are our childcare workers, our home health aides, our barbers, our hairdressers, our folks that work in restaurants and bars, our bus drivers, and grocery store workers,” she said.

People of color also make up an overwhelming percentage of workers deemed essential in some of the earliest U.S. coronavirus hotspots.

In New York City, where more Americans have contracted and died from COVID-19 than anywhere else, 75 percent of essential workers are black, Asian or Latino, according to a March report from the city comptroller.

Among all New York City essential workers, 8 percent live in households at or below the federal poverty line, 24 percent live at or below double the federal poverty line — $52,000 for a family of four — and another 8 percent do not have health insurance.

“These are individuals who are overrepresented in the types of jobs that don’t allow them to socially distance, so they’re making the unfortunate choice between their health for them and their families and a paycheck,” Solomon said.

The risks facing communities of color reach far beyond the U.S. cities where COVID-19 first emerged. Coronavirus outbreaks in meat processing plants, where immigrants make up a significant portion of workers, have snarled food supply lines and caused temporary shortages.

Closed meat processing plants and disruption in the food system puts even greater financial strain on farmers and ranchers, who were already scraping to get by amid record low commodity prices and trade tensions driven by Trump’s tariffs.

“All of that stuff tends to be a weight born more and more by black and brown communities and  lower income communities across the board,” Baradaran said.

Tags Coronavirus Donald Trump Great Recession Inequality Pandemic

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