The fallout of the Covid-19 crisis in America has led to record unemployment, massive economic downturn, businesses closing left and right and a collapsing healthcare system. All of these layers of intersecting crises have emphasized the massive gap that already existed in all of these systems. Rates of income inequality, mortality rates between low-income minority areas and affluent whiter ones, and gulfs in education and wealth already depicted a country with massive inequality at every level. Now this pandemic has shown us just how big the difference is, who each of those systems fail, and who they benefit, even in times of crisis.
One of the starkest examples of how this crisis reveals inequality is in the execution of programs meant to provide economic aid. I’ve written before about the shortfalls of the Paycheck Protection Program, meant to help small businesses stay in business and providing income to employees through shut-downs. Now that more loans have been dispersed and a second round of funding passed, we have a better idea of exactly who the program failed, and where the money went.
We know that the banks giving out PPP loans prioritized their larger clients, ones who had existing borrowing history and requested larger loan amounts. This makes sense for a bank, because it is giving out the loan to businesses with established lending history, and focuses to flow of money into fewer places, simplifying the process. But for a program meant to provide funds to as many businesses as possible, particularly the smaller ones that have fewer sources of capital, it misses the mark.
As a result there have been reports of large, publicly traded companies receiving funds meant to for small businesses with no other sources of capital. Part of this is because of unclear and changing rules around the PPP. As the Small Business Association came out with guidelines to prioritize requests for smaller funds, under $2 million. As a result of the blow-back some of these companies have committed to returning the loan money, but many more have stated they intend to keep the money, totaling almost $1 billion of the funds being held by large companies.
Meanwhile, many small businesses that are in areas most affected by the crisis and run by minority businesses owners have been left with nothing. A recent study by the University of Chicago only 15 percent of small businesses in areas with highest rates of infections and most job losses were able to obtain PPP loans. It also shows that industries more affected by social distancing measures such as restaurants and bars have had a harder time receiving loans than those less affected, like technology and medical research companies.
By excluding these areas and businesses that are more harshly affected, with less lending history and requesting smaller amounts, there has been a large disparity in loans going to white and male owned businesses rather than minority run businesses. The Center for Responsible Lending has released a report that estimates that up to 95% of businesses run by black, Latino, Native/Pacific-Islander and Asian owned businesses have been denied PPP loans.
That is not the only way that economic aid has left minority communities behind in the wake of this pandemic. Even the stimulus check approved by congress in late-March were more likely to be withheld from minority citizens. In their very distribution, the $1,200 stimulus checks were distributed mostly through direct deposit into private bank accounts. According to Terri Friendline, an associate professor of Social Work at the University of Michigan, that leaves many communities undeserved by banking behind. These communities are the most economically disadvantaged, highly affected by the spread of the virus and resulting unemployment, and are historically minority communities.
Many families were also denied any stimulus at all. Despite disapproval from lawmakers, many banks opted to withhold or gouge stimulus money from customers who had overdrawn bank accounts. Stimulus money was also withheld from citizens who had outstanding child support payments. That leaves people who in many cases already cannot afford to pay child support without the necessary funds to provide that care, for their children or themselves. For many citizens, even if they have a balanced bank account and no outstanding debts, they were still denied stimulus money because they had family members who were not US citizens. Spouses and children of undocumented immigrants, even if they themselves were legal citizens or residents, were denied stimulus money. This is a blatant targeting of immigrant families, many of whom have been put out of work, or even continue to work on the front lines as essential workers.
As unemployment rises up to 36 million this week, lower-wage and less educated workers are by far the most highly affected. By far the industries hit hardest by unemployment are entertainment, hospitality and food service industry. The first month of job losses wiped out over two years of growth in the industry. Food service workers make up the largest portion of those losses, but many workers in entertainment, personal care and delivery services have also seen large rates of unemployment. Other areas with particularly high rates of job loss include home health care, agricultural and manufacturing workers. The Center for American Progress has released a report detailing how these losses can impact immigrant workers and women of color the most.
Meanwhile industries many industries with higher educated or non-service workers remain less affected. The Bureau of Labor Statistics shows that the financial industry, insurance, real estate, telecommunications and government workers have seen the least job loss, all less than one percent.
As states open back up, it is also going to be these workers who are put more at risk. The industries that have seen the least job loss have implemented work from home policies, without any rush to bring workers back into a physical office even as shut-downs end. However service workers are now being forced back to dangerous working conditions, or risk losing unemployment benefits. I wrote here about how that puts many workers in an impossible bind, of choosing between feeding their families, or putting themselves and their families at risk of catching and spreading Covid-19.
Lest we think the risk is gone as states open back up, a recent University of Washington study found that as many as 26.7 million workers risk infection at their jobs. Even as workers are put at risk, states such as Ohio have set up systems for employers to report workers who have declined to come back to work so that they lose their unemployment benefits. Th Republican held Senate has even sought to pass liability protection for employers who force their workers back to work in dangerous conditions, preventing workers from suing if their company denies them reasonable protection.
These are the same companies who have managed to turn tremendous profit margins even as the pandemic ravages the country. Amazon reported a $75.5 million profit this quarter even as it denies sick-leave, overtime and hazard pay to workers in its warehouses were the virus is spreading. While founder Jeff Bezos, the man on-track to become the world’s first trillionaire, cautioned the profits may be cancelled out by higher prices, the company’s stock value still skyrocketed while most stocks are in freefall. And while 27 million Americans are at risk of losing their health insurance during a pandemic, aid packages by congress could not provide protections that would prevent price-gouging from pharmaceutical companies that develop a vaccine. And even while the most impoverished Americans struggle to qualify for benefits or keep themselves fed and safe during this crisis, congress has refused to pass any rent guarantees or protections from landlords evicted out-of-work families.
While none of this is new, this shows how a system built around massive inequality operates in times of crisis. It is a free-for-all, where the workers at the lowest rung are forgotten or taken advantage of, small businesses are overshadowed by the ones with highest profit-margins, and the richest industries benefit while most Americans lose any sense of stability or protection.
Even the rates of infection and mortality from Covid-19 itself depict in stark numbers how a system of inequality is manifested. Since March there have been reports of black patients with coronavirus making up a disproportionate number of deaths in individual areas from New York to Chicago to Kansas. And CDC statistics back that up nationally, finding that counties with higher black population make up more than 60% of deaths from Covid-19. The CDC estimates that black Americans could make up anywhere from one to two thirds of Covid-19 deaths, and are about twice as likely to die than white patients with Covid-19.
This has been attributed to a number of factors from higher rates of diabetes and heart disease in black Americans to less access to medical care or financial capability to shelter at home. That CDC reports detailed that the higher rate of pre-existing conditions among black Americans is due to racial segregation that has placed them in food deserts with limited access to nutritional resources, medical or mental care. They are also more likely to living in housing units with more people and higher risk people. Black workers also make up a large portion of the essential work-force that continues to work through this pandemic, like public transit workers or home healthcare workers. Despite working essential jobs, they are also less likely to be provided paid sick leave family leave or even medical insurance through their work.
All of these circumstances existed before the pandemic. And even before this crisis, minority communities have been more vulnerable to crises, without the financial resources to sustain long-periods of unemployment of medical emergencies. As the entire country realizes how much of a strain it is to undergo such a dramatic crisis, it is just another in a long-list of crises that have always had the potential to devastate low-income families. For those families, anything from a single car crash, a plant closing or a mother passing away has the same financial burden of this pandemic, only now we all feel it. None of this is new, but as the New Yorker’s Jelani Cobb said recently “coronavirus revealed nothing to us other than the kind of cruel, everyday frequency of the injust and unequal and discriminatory legacy, the policies and the histories in this country that we now see having a mathematical face put to them.”
Write To Know 