According to Stephen Ratter, an investment manager and former advisor to President Obama, the United States is in for LONG-TERM unemployment.
As the Washington Post reports, Ratter believes unemployment won’t go back down quickly, even if COVID-19 gets handled.
“Even in 2023, the unemployment rate may average 6.6%,” he estimates. That means years from now, it’ll still be double what it was at the beginning of 2020.
But unemployment doesn’t affect everyone equally - Black Americans are often hit hardest.
“Recessions are always racist,” asserts Vox, and the current recession is no different. During the Great Depression, Black unemployment was double white unemployment at nearly 50%.
During the 2007-2009 Great Recession, Black unemployment was 16% compared to whites’ 9%. At present, Black unemployment is about 30% higher than it is for whites, and the gap keeps widening.
Black Americans have been disproportionately hit on all sides by the pandemic, both in health and financial impact. And unemployment has an even bigger impact on Black families than white ones.
The persistent gap in wealth between Black and white households could be why. A Brookings Institution analysis shows that Black families have, on average, 90% LOWER net worth than white families - even when the families make the same income.
Brookings argues that inheritance - passing down wealth from generation to generation, which is taxed much less than income - accounts for much of the wealth gap.
Historical lack of access to wealth-building tools such as home ownership is also a major factor. The Economic Policy Institute shows Black homeownership rates have basically not improved in the 52 years since the Civil Rights Act was passed.
This is why unemployment hits Black communities so hard - they are much more likely to rely solely on income to survive, as they don’t have wealth and savings to fall back on.
According to some scholars, Black Americans hadn’t fully recovered from the Great Recession - and now the COVID-19 crisis is making recovery seem impossible. The Atlantic argues that the Trump Administration is repeating Obama’s policy mistakes and recovery from the pandemic will also miss the mark.
But not everyone has lost hope.
Ryan Goss, of the Centre for Public Impact and writing in U.S. News, argues that public-private partnerships to uplift low-income neighborhoods is a path forward. Democrats in Congress are arguing for a comprehensive stimulus bill, and some continue calls for a Green New Deal that would invest heavily in renewable energy and infrastructure, creating millions of jobs and helping reduce environmental destruction.
Many Black activists believe completely divesting from mainstream capitalism and focusing on mutual aid and traditional African communalism is the answer.
Only as economic reports continue to be released, and a fuller picture of the impact of the pandemic emerges, will the country know for sure what the future holds.