Monday , October 26 2020
Home / Brad Delong, Berkeley / Weekend reading: The most unequal recession in modern U.S. history edition

Weekend reading: The most unequal recession in modern U.S. history edition

Summary:
This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context. Equitable Growth round-up Though recent unemployment data released by the U.S. Bureau of Labor Statistics suggest that overall joblessness is going down, the coronavirus recession is exacerbating long-term trends of decreasing job quality and rising economic vulnerability. These trends are especially harmful to marginalized workers and their families. Unemployment rates for Black,

Topics:
Emilie Openchowski considers the following as important:

This could be interesting, too:

Emilie Openchowski writes Weekend reading: Supporting workers, regardless of employment status, edition

Emilie Openchowski writes Weekend reading: Helping U.S. families stay out of poverty and build wealth edition

Emilie Openchowski writes Weekend reading: What the 2019 Survey of Consumer Finances reveals about racial and economic inequality edition

Emilie Openchowski writes Weekend reading: Measuring and achieving a U.S. economy that works for all edition

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.

Equitable Growth round-up

Though recent unemployment data released by the U.S. Bureau of Labor Statistics suggest that overall joblessness is going down, the coronavirus recession is exacerbating long-term trends of decreasing job quality and rising economic vulnerability. These trends are especially harmful to marginalized workers and their families. Unemployment rates for Black, Latinx, Asian American, women, and lower-educated workers are well above those of White men and highly educated peers, and the data indicate that the recovery is and will continue to be uneven among these groups. Kate Bahn and Carmen Sanchez Cumming analyze this month’s Jobs Report and show why the recent data signal an impending disaster for the public sector, particularly in local and state government jobs, which are disproportionately held by workers of color and women. Though job losses so far are not as severe in the public sector as in the private sector, Bahn and Sanchez Cumming explain that government employment was slower to recover in the previous recession and was marked by a shift from decent to low-quality jobs. Another sluggish recovery in the public sector would harm the economic security of these workers, deepen existing labor market disparities, and put a drag on the speedy and equitable recovery our economy desperately needs.

Early in 2018, after the Tax Cuts and Jobs Act was passed and signed into law by President Donald Trump, the administration began requiring cost-benefit analyses of tax regulations. More than 2 years later, Greg Leiserson writes, it is clear this experiment failed. In a new report and an accompanying blog post, Leiserson details the shortcomings of cost-benefit analyses for TCJA regulations and how the framework for cost-benefit analysis mandated by the White House Office of Information and Regulatory Affairs within the Office of Management and Budget shaped these weaknesses. Namely, the current cost-benefit analysis framework hides revenue-losing, inequality-increasing giveaways by ignoring the revenue and distributional effects of tax regulations. Leiserson explains why a different approach is needed and then provides one, in which the Department of the Treasury leads the process and provides qualitative and, when possible, quantitative evaluations that look at the impacts of tax regulations on revenues, on the level and distribution of the tax burden, and on compliance costs.

Earlier this week, Michael Kades testified before the U.S. House Subcommittee on Antitrust, Commercial, and Administrative Law regarding competition in digital markets. His testimony explains the importance of the recent Judiciary Committee investigation into the state of competition in online markets and encourages the committee to continue acting to strengthen the antitrust laws, promote competition online, and protect consumers. Kades runs through various legislative reforms that are needed in addition to enforcement actions, explains why interoperability can work as a mechanism for addressing digital monopoly power, and details other laws and regulations Congress can enact to promote competition.

Catch up on Brad DeLong’s latest Worthy Reads, in which he provides summaries and his takes on recent must-read content from Equitable Growth and other sources. This week, he highlights Heather Boushey’s recent USA Today op-ed on the importance of equitable economic growth especially in the wake of the coronavirus recession, a recent working paper by Michael Kades and Fiona Scott Morton on competition in digital networks, and more.

Links from around the web

While recessions often hit poorer households harder than wealthier ones, the coronavirus recession is undoubtedly the most unequal recession in modern U.S. history. A recent Washington Post analysis from Heather LongAndrew Van DamAlyssa Fowers, and Leslie Shapiro shows how job losses since March have disproportionately fallen on low-wage workers, women, and workers of color. In a series of interactive graphics, the co-authors display the stark disparities in both unemployment and re-employment among various groups within the U.S. labor market. In particular, they write, Black women, Black men, and mothers of school-age children are having the hardest time getting hired back. While those at the top of the income ladder have either faced mild setbacks or none at all, many of those workers lower down on the ladder face what the authors call “a depression-like blow.” The inequality of the economic downturn is a reflection of the outsize impact of the coronavirus public health crisis on communities of color and low-income households.

A recent survey also confirms that Black and Latinx parents are having the most financial difficulty during this recession. Eighty-six percent of Latinx households and 66 percent of Black households reported struggling to afford healthcare, running out of household savings, and having trouble paying bills, compared to 50 percent of White households. Now that many of the government supports enacted earlier this year have expired, writes Giulia McDonnell Nieto del Rio in The New York Times, experts are concerned that the racial divides will continue to grow and exacerbate existing inequalities faced by these communities. This is particularly concerning for households with children, del Rio continues, and indicates that many will experience added long-term financial harm from the pandemic.

Though much of the conversation around the coronavirus pandemic is centered on ending lockdowns and getting people back to work, the reality is that until the public feels safe venturing out of their homes, reopening the economy won’t save small businesses from shuttering. Vox’s Emily Stewart explains why the narrative around reopening only provides false hope for many small businesses around the country, many of which had to close permanently despite implementing additional safety measures. Many people not only are wary of going out in public during a deadly pandemic but also lost their jobs and are not eager to spend money on unnecessary expenses. Simply put, Stewart writes, “you can’t force business as usual when life is not.”

Friday figure

Figure is from Equitable Growth’s “Equitable Growth’s Jobs Day Graphs: September 2020 Report Edition” by Kate Bahn and Carmen Sanchez Cumming.

Leave a Reply

Your email address will not be published. Required fields are marked *