Like me, you may have read that covid has been exposing gaps in measurements of success or well-being along racial lines. When I see that, I just look at headline numbers as evidence that those comments must be correct.
Doing some critical thinking on the topic, here's what I think COVID could be exposing. First, what do we know about the economic impact of this disease? Industries that cater to discretionary spending (ie excess spending over saving and sustenance consumption) have been the hardest hit. Industries like hospitality, travel, entertainment, dining, and even public services like schools and libraries that tend to be free.
As a result, unemployment rates have skyrocketed nationally, although they've come down recently in some spots. As of December 4th, the unemployment rate for white workers was 5.9% versus 10.3% for black workers so nearly double.
While the disease may have disproportionately affected minorities in cases and deaths, we know that it has also impacted their pocketbook disproportionately, as well. Focusing on the economic issue in fighting this disease, the question is, are the health impacts of this virus impacting the money earning abilities in minority communities? There really isn't much of a connection there.
Let's say the high unemployment rate could be caused by those workers being on the frontlines and therefore those workers are getting sick at worse rates than other workers, and therefore the total workforce drops, but the number unemployed remain the same. So, you have 100 total workers, 95 employed, for an unemployment rate of 5%. If the workforce shrinks by 5 due to workers becoming ill, then the unemployment rate worsens to 5.55%. But, the replacement of those works would rapidly reduce the unemployment rate to 0%. Therefore, it's not likely caused by frontline workers becoming sick.
Secondly, we can look at no change in the total supply of available workers, and just look at the impact of frontline worker reduction through reduced business activity as a preventative measure. Those reductions don't reduce total size of workforce, it just moves those workers from employed to unemployed, but the labor force remains 100, the unemployed workers double to 10, and the employed workers decline to 90, for an unemployment rate of 10%. This seems to be the biggest determining factor, but why did this happen?
It comes down to less discretionary spending as a preventative measure, saving during uncertain times, or just risk aversion to spend at that rate of excess due to the health risks of the virus. It's inherently discretionary, so it makes sense for people to reserve the right to spend when they see fit or don't. But again, the workers are only valuable at the velocity of discretionary spending. This identifies the problem that still exists within American society, which is that race still seems to be a barrier to participating within the main parts of society. The unemployment rate only comes down as long as other groups are willing to spend more money beyond sustenance, otherwise, minority groups will struggle.
This isn't an issue of worker rights or minimum wages. It's an issue of maybe inclusion but at the least proper participation in the main parts of what makes American society great so that those minority groups are constantly valued by society. The issue is training and general wealth building especially within minority communities.
TL;DR, COVID exposes the fact that minorities are on the outer rim of society, due to current disproportionate economic impact.
Holy tryhard
Would love to hear feedback instead of obvious stress over the fact that this was written and posted.
Sir, this is a Wendy’s
Funny. This is me believing capitalism is a great tool for economic empowerment but not confident in the current vision as a solution.
Is the argument that minorities are on the outer rim of society because they tend to work in industries that depend heavily on disposable spending? As in, too many minorities working in hospitality and too little working as nurses or engineers? I think there’s definitely an argument to be made for that, but the difference between the two types of occupations comes down to education. I’d love to see an actual economic study on this with some real data, as difficult as that might be to obtain. Surprised someone like Chetty hasn’t already published something like this, or if someone has I haven’t seen it yet. Any takers?
In the current environment, we can clearly see that certain areas of the economy have been declared disposable. The fact that what is disposable seems to have disproportionately affected workers along racial lines, seems to dispel the myth that workers of all races are equal.
“Let's say the high unemployment rate could be caused by those workers being on the frontlines and therefore those workers are getting sick at worse rates than other workers, and therefore the total workforce drops.....”
Data please? You do know that in NYC hospital workers, bus drivers, and cops have had lower infection rates than broader society right?
You managed to take something incredible obvious that could be said in a sentence and turned it into an essay. Well done, if this was college you're probably get an A. In real life you don't even get the interview
I think you have to look at it based on location. Cities like Orlando and Las Vegas obviously depend more on money traveling in and being spent there, thus driving up demand for work. When you look at New York, the economy is heavily dependent on many industries that still have people locally despite hospitality and entertainment taking a hit. Finance, tech and other industries mostly unaffected will continue to fuel spending in these cities as it is. Given that, we have to recognize that minorities are employed in professions that can serve as a base or essential in maintaining infrastructure or operation. Many are in construction/trades, administration, manufacturing, shipping and public service jobs, all of which comprise a significant number of minorities but remain mostly employed.
I do have to point out that all those industries that are high discretionary spending are going to have the biggest fluctuations just because the demand is very consumer driven. It's always been like that and those industries often need to hire people quickly on short-notice to meet seasonal/temporary demand. The people who take these jobs tend to gain less skills and have less training due to the shorter time frame of the seasonal work.
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