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I was working on a long thread of all the work I have done on the risk we are going into a double dip recession - we are - and the scars left by COVID. I realized no one reads it. So here is the short version. Spoiler - it still long.
Low-wage workers hit harder than high-wage workers but don’t get too comfortable in your work-from-home bubble as that could change if this recession metastasizes into a more traditional recession w say a lot of zombie firms and a moribund commercial real estate mkt.
Black, Hispanic, Native American and Asian workers hit harder than white workers.
Women hit harder than men.
Millennials hit hardest of age groups w job losses. They were already trailing other generations w blow to lifetime earnings due to 08-09 recession.
Women hit harder than men.
Millennials hit hardest of age groups w job losses. They were already trailing other generations w blow to lifetime earnings due to 08-09 recession.
Gen Z will suffer blow to lifetime earnings and educational attainment due to COVID. Dropouts are up and risk of many becoming permanent rising. We know from natural disasters, disruptions to education are large and persistent. Kids not learning to read when need to.
Youngest school-age children in low wage households falling furthest behind. Also suffering more economic damage. We put a priority of bars over education. Should pay those who had to close and prioritized education. We have been cutting funds for basic Ed for 40 years.
Higher Ed also hit. Community colleges, undergrad and graduate schools all suffering. Cutting programs and personnel. Will be hit by cuts to state and local budgets.
Health care system overrun - treating covid is costly not a profit center.
Health care system overrun - treating covid is costly not a profit center.
Consolidation will accelerate and access to healthcare will worsen. The blow esp hard to Black people who already suffer systemic bias in quality of care that is administered. Women also taken less seriously by health care system, which compromises quality of care.
Long term health effects of COVID will undermine ability to work in a world w a 40 year down trend on paid sick days and paid vacation. Many will fall to the sidelines of the economy entirely.
What is good? Science, advances in treatments and vaccines but not a cure if we don’t dress the wounds we have already inflicted on the economy. We will need funds to catch-up and fortify the foundation from which we rebuild post crisis.
Yes. There are a lot of new business formations occuring and some hope that they will be biz that hire people. But, credit markets for consumers, which tend to seed small biz formation, is tight. This coupled with widespread consolidation inhibits dynamism and job generation.
Saving rate is high, which could help to unleash pent up demand once we reach herd immunity w a vaccine. Depends on complex logistics and uptake of vaccine. Is the saving a few household enough to lift all boats? No. We know this. The economic aggregates mask inequality.
We also know that COVID has exacerbated inequality and that inequality undermines our overall potential to grow or sustain a robust recovery. It took us more than a decade to see wages finally accelerate at the low end of the wage scale following 08-09 recession.
Take a moment. Let all that sink in. Shelve your idealogy, follow the facts and realize that this time is really different. Millions upon millions are suffering through no fault of their own. Could it have been worse? Yes. It also could have been less costly on so many levels.
When people ask me what keeps me going, I say that COVID has revealed much that too many felt comfortable ignoring in our economy. It is in that revelation that we can also find solutions to our larger problems. COVID can be a catalyst for real healing if we let it.
There is so much more but one long thread at a time. Thank you for reading this far.
