COVID-19

A huge wealth gap makes economic recovery harder for Black Americans

Mitchell Hartman Dec 10, 2020
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A woman makes grilled cheese with her granddaughter after being laid off from her job early in the pandemic. Joe Raedle/Getty Images
COVID-19

A huge wealth gap makes economic recovery harder for Black Americans

Mitchell Hartman Dec 10, 2020
Heard on:
A woman makes grilled cheese with her granddaughter after being laid off from her job early in the pandemic. Joe Raedle/Getty Images
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An average single white man under the age of 35 is 224 times as wealthy as the average single Black woman the same age, according to a new report from the Brookings Institution’s Hamilton Project.

The report also found that going into the pandemic recession, Black households held 4% of household wealth in America even though they’re a little over 13% of the population.

White households — 60% of the population — held 84% of household wealth.

What do those numbers mean for people of color as they struggle through this pandemic economy?

Gary Hoover is a Black man whose father raised his family and worked in a factory in Milwaukee. When his father died in 2008, Hoover said, there was a lot of worry in the family.

“How we were going to be able to handle expenses?” he said, like clearing his dad’s debts and paying for the funeral.

Now, Hoover’s an economist and department chair at the University of Oklahoma.

“It just so happened that, you know, me being a university professor, I was able to cover those final expenses and to take care of some outstanding debt that he left,” he said.

But he knows many Black families don’t have someone like him to step in.

Kristen Broady at the Brookings Institution’s Hamilton Project has been looking at household wealth by race and how disparities make families more resilient or precarious in this pandemic.

She said white households inherit more, more often. And “white people are more likely to own homes and their houses are likely to be worth more,” Broady said.

“There’s going to have to be a recovery of income, and then there’s going to have to be a recovery of wealth” when the economy bounces back, Hoover said.

“Given that Blacks started out with so fewer assets available to them in their wealth portfolio, it’s going to take them even longer to recover, therefore exacerbating the already existing problem,” Hoover added.

Which is exactly what happened after the Great Recession.

COVID-19 Economy FAQs

Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?

This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.

Could waiving patents increase the global supply of COVID-19 vaccines?

India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.

Can businesses deny you entry if you don’t have a vaccine passport?

As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.

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