Marshall Auerback – Why COVID-19 Is the Great Unequalizer

The pandemic’s impact is being experienced disproportionately by minorities and the poor.

Marshall Auerback is a market analyst and commentator.

This article was produced by Economy for All, a project of the Independent Media Institute.

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In his now must-see-TV daily press conferences, New York Governor Andrew Cuomo has referred to COVID-19 as “the great equalizer.” In the sense that anybody can be infected by the virus, the governor is right. Yet after several months, the data shows clearly the impact is unequally landing on the shoulders of people of colour and all but the most wealthy. The health impacts and absence of economic measures to protect them are so extreme that Cuomo’s statements are more than hollow—they are cruel cover-ups.

If anything, COVID-19 has been little more than a novelty for the 1 percent and a dystopian nightmare for the rest of us. Had we experienced a repeat economic crash more along the lines of what happened in 2008, that might have forced a true reckoning and consequent reform in our system. Instead, we have a pandemic that is facilitating public looting under the cover of a collective surgical mask as it is entrenching pre-existing inequities. A toxic mix of racial, financial, and geographic disadvantage is literally proving to be a death sentence.

In the first instance, workers of colour, particularly black Americans, who have long been overrepresented in the lowest-paying service and domestic occupations are again being hit with a double whammy. Their jobs and income have evaporated with the shutdown, and they have long had minimal household savings relative to Caucasians to act as a buffer against unexpected lay-offs or lost wages.

As Time reporter Abby Vesoulis writes, many low-income jobs—meat processing, agricultural work, nannies, and store clerks—“can’t be done remotely” (to say nothing of the digital divide that also divides on income grounds), “and the majority of low-income jobs don’t offer paid sick days.” People with these jobs are also “disproportionately more likely to be uninsured or under-insured for medical care,” even though the government has agreed to cover COVID-19 related health coverage.

That brings to the fore another significant “unequalizer.” Low-income communities and workers of colou are experiencing substantially higher rates of mortality. Consider a few regional examples, cited in MedPage Today: “In Louisiana, African Americans accounted for 70% of COVID-19 deaths, while comprising 33% of the population. In Michigan, they accounted for 14% of the population and 40% of deaths, and in Chicago, 56% of deaths and 30% of the population. In New York, black people are twice as likely as white people to die from the coronavirus.” Likewise, CDC researchers have found that “80% of Georgia residents hospitalized with COVID-19 are black,” Blavity reports. “Latinos make up 60% of the population in the 10 Illinois ZIP codes with the fastest growing number of new COVID-19 cases,” according to the Chicago Sun-Times.

No one should have to choose between going broke and becoming infected with and spreading a fatal virus. But that’s a literal life consequence for working people in a system that goes on lockdown to flatten the curve. That binary choice in itself is a product of decades of fiscal austerity in which social safety nets and health care systems were gradually eviscerated in the interests of privatizing everything in sight.

The privatized mode that we have largely embraced in the United States is clearly a bad one, but it’s showing no signs of stopping, even in the midst of a pandemic. Still today, an alliance of private hospitals, health insurance companies, and large pharmaceutical companies have formed a campaign group—the Partnership for America’s Health Care Future Action (PAHCF)—to counter growing political support for single-payer health insurance. Even as one state government after another has declared a public state of emergency (and corresponding lockdowns), the PAHCF has persisted in its principal lobbying activity, all the while also wrangling massive bailouts from the government to cope with the ill effects of the very market-driven system they have spent decades championing but which has failed to defend us during this pandemic.

We classify our health care workers as “essential,” but they are poorly paid and treated as disposable. Our health care system features a chronic shortage of N95 surgical masks, or nurses wearing bin sacks, given a lack of sufficient protective gear, let alone the average worker, who is tasked with sustaining what’s left of our functioning economy in food processing plants or grocery delivery services. Essentially, these workers are faced with the choice of literally risking their lives to sustain their incomes and livelihoods or joining the ranks of the unemployed. Common patterns of domestic working-class life compound the risk of spread: fewer square feet for family members to share at home, fewer options for public transport.

It is much easier, by contrast, to sustain self-isolation comfortably in a spacious suburban home, let alone a palatial spread in the Hamptons or Malibu. The risks of transmission are further mitigated because the jobs of the affluent are often facilitated by sophisticated internet connectivity that precludes the need to engage in lengthy commutes on public transportation. Even though low-income Americans have made gains in tech adoption, the digital divide very much remains a consequence of income disparity.

In the meantime, home confinement has not created any inhibition in terms of getting on board the government gravy train. Government support programs are often being directed via private banking networks, which invariably means preferential treatment to those with strong pre-existing banking relationships. That makes a mockery of the Small Business Administrations’ proviso that the loans will be granted on a first-come, first-served basis. The April unemployment figures will almost certainly show the largest one-month blow to the American labour market on record. That clearly indicates that the relief programs in place have come nowhere near protecting, let alone healing the ailing labour market.

Nationalizing payrolls, as the Norwegians and Danes have largely done, would have been a far more efficient way of ensuring direct relief from those most adversely affected by the economic shutdown. The government already has pre-existing tax and employment data and distribution networks in place to avoid the cumbersome application processes that characterize business support programs (all of which seem to run out of money within weeks of implementation) or avoiding the problems of those who have tried to file for unemployment insurance, but haven’t been able to thanks to crashing websites and overwhelmed phone lines. And it would deliver much more bang for the economic buck: Economist Pavlina Tcherneva estimates that “If the government paid 100% of total labor compensation for 3 months, it would be spending $2.85 trillion.”

That certainly would have provided far more comprehensive and equitable relief than the trillions of dollars already extended by the Treasury and Federal Reserve programs, which instead have ensured that the rich are getting richer: “[T]he American billionaire class’s total wealth [has] increased about 10%—or $282 billion more than it was at the beginning of March,” writes Kristin Toussaint for Fast Company. By contrast, in addition to the rising unemployment levels, “one in three [American workers have] lost half or more of their income due to COVID-19,” according to RIWI Corporation, a Canadian-based data aggregator.

Nor are the elites going to let the pandemic interfere with their leisure when current government restrictions are alleviated. According to the Times of London, “the super-rich are snapping up the citizenship of countries in different parts of the world to ensure they will always have a virus-free, sunny haven to escape to on holiday or if there is another lockdown.”

Speaking of passports, “immunity passports” are likely to become another major dividing line going forward. While coronavirus infections were initially viewed as something akin to a scarlet letter, if these infections ultimately confer a form of immunity from recurrence or spread of the virus, they may well become badges of honour. Governments might seek to legislate against preferential hiring because of race, age, or gender, but it is harder to make that case where pandemic prevention becomes paramount. Immunity could well alleviate the challenges where physical and social distancing is virtually impossible (whether it be factory work, farms, hospitals, etc.).

These all relate to the short and medium term. However, there are also long-term impacts. Economists use the term “hysteresis” for when an event in the economy persists well into the future, even after the original factors that led to that event are ultimately removed. Even under a best-case scenario—for instance, assuming the adoption of a successful regimen of testing and contact tracing (as in South Korea), or a vaccine (there is hope that one of those being developed may establish scientifically peer-reviewed efficacy by June)—the damage sustained by the economic lockdown will still persist well into the future. Many small businesses will never reopen. Those that do survive will be loath to invest and expand, given the possibility of recurrent waves and additional lockdowns in response. Not only will work or health care remain prone to massive inequality in terms of access and quality, but in another cruel twist of fate wrought by this pandemic, tourism and leisure activities too may well be viewed increasingly as luxuries restricted to the rich and well-to-do.

COVID-19’s impact may have been underestimated when it first emerged from China. Likewise, the long-term disproportionality of its effects on the poor remains similarly underappreciated and therefore will likely be insufficiently addressed for the foreseeable future. Calling this coronavirus a great equalizer is an obscenity. What’s even worse is that we appear to be letting another crisis go to waste in terms of effecting fundamental change that would help the many, as opposed to perpetuating the position of our privileged elites.

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