How COVID-19 has heightened economic and racial inequality. : Planet Money : The Indicator from Planet Money The coronavirus pandemic has been called "the great equalizer." But in fact, COVID-19 has disproportionately affected African Americans in all kinds of ways.
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Racism And Economics

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Racism And Economics

Racism And Economics

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UNIDENTIFIED PERSON, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

GREG ROSALSKY, BYLINE: This weekend was defined by protests and marches across the United States. Cities from Minneapolis to Los Angeles to Chicago saw thousands of people come out, sparked by the death of George Floyd after a Minneapolis police officer was filmed with his knee on George Floyd's neck.

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STACEY VANEK SMITH, HOST:

Here in New York, hundreds of people marched down Flatbush Avenue carrying signs, chanting, wearing masks. At one point, dozens of protesters laid down on the street on their stomach, chanting, get your knee off my neck.

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VANEK SMITH: And hovering over everything was coronavirus, which has swept through this country, killing more than 100,000 people, locking down states and causing tens of millions of job losses.

WILLIAM DARITY JR: It's making glaringly visible a host of inequalities that existed prior to the onset of the crisis.

VANEK SMITH: This is THE INDICATOR FROM PLANET MONEY.

I'm Stacey Vanek Smith.

ROSALSKY: And I'm Greg Rosalsky. I write the PLANET MONEY newsletter. And in our latest newsletter, I look at why COVID-19 and this recession are hitting African Americans especially hard.

VANEK SMITH: Today on THE INDICATOR, racism and economics - we look at the part that economic inequality is playing in the high number of African Americans dying from COVID-19. And we look at what this could mean for inequality going forward.

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VANEK SMITH: Valerie Wilson directs the Program on Race, Ethnicity and the Economy at the Economic Policy Institute. And Greg, you asked her about something that New York Gov. Andrew Cuomo said about COVID-19.

ROSALSKY: I think it might have been Gov. Cuomo - called the virus the great equalizer. And it doesn't seem to be turning out that way.

VALERIE WILSON: So when we look at the economic impacts of the pandemic, it basically follows the pattern of existing economic inequalities in this country.

VANEK SMITH: Valerie says economic inequality has contributed both to the increased death rate African American communities have seen from coronavirus and also to the increased economic and financial impact African Americans have seen from this recession.

ROSALSKY: On the health side, COVID-19 has been especially deadly for African Americans. Valerie points out that the mortality rate for African Americans is about 2 1/2 times that of white Americans. Part of the reason for that, she says, is because of jobs. According to the U.S. Bureau of Labor Statistics, African Americans are disproportionately likely to be doing so-called essential jobs in the food industry, working in health services, driving taxis. On the upside, that means these workers still have their jobs. On the downside, it means they have to keep working and potentially put their health at risk.

WILSON: Essentially, what you'll have to - quit your job in order to protect your health. And that puts you at greater risk of economic insecurity and not having the income, not having access to resources. So people are being forced to make very difficult decisions. People are having to decide between economic security and health security.

ROSALSKY: Valerie says African American workers are also disproportionately likely to live in multigenerational homes, so the chances of spreading the disease are especially high.

WILSON: If you're an essential worker, you have to go to work. You're exposed to people on your job. You come home, and you may have a parent or grandparent living with you and younger children that you're caring for as well. So you're exposed on your job. You come home, and you may put people who live in the household with you at greater risk as well.

VANEK SMITH: And making the situation even worse is the existing wealth disparity between African Americans and the rest of the population. Black Americans constitute about 13% of the U.S. population, but they hold less than 3% of the country's wealth.

ROSALSKY: How big is this gap in wealth inequality?

WILSON: So at the median, the median black family has about 10% of the wealth of the median white family. What that translates to in dollars - we're looking at a median net worth of about 17,000 black households compared to 171,000 for white households.

ROSALSKY: Wow, so 10 times larger, essentially.

WILSON: Absolutely, yeah.

VANEK SMITH: And that means many African Americans can't afford to stop working and also have a harder time weathering unemployment and an economic crisis, says Valerie.

WILSON: I think the impact of a recession really shows up in one's ability to weather that economic downturn.

ROSALSKY: And so that's a matter of wealth disparities. That comes down to disparities in wealth.

DARITY: It makes what was already a set of severe wounds even harsher.

ROSALSKY: That's William Darity Jr. He's an economist and professor of public policy and African American studies at Duke University. He says many people have talked about how African Americans are dying from COVID-19 at a higher rate because they're more likely than the rest of the population to have health conditions that put them at higher risk, like asthma, diabetes, hypertension and obesity. Still, he says, that is an economic issue as well.

VANEK SMITH: Yeah. In fact, a recent study from Princeton University found that black children are more likely to have asthma because of living in older buildings that are in poor conditions and living closer to busy highways, which tend to be high-pollution areas.

ROSALSKY: People who have higher incomes tend to have healthier diets and better access to clean water and things like medical services. Populations with less money struggle on all these fronts.

DARITY: Another more fundamental preexisting condition, which drives many of these health differences, is this enormous differential in access to wealth. So we argue that you should think about the wealth gap as a preexisting condition that leads to greater susceptibility to the harms of the disease.

VANEK SMITH: And William worries that the economic disparity between African Americans and the rest of the population is going to get worse. For one thing, employment - African Americans have a higher unemployment rate compared to the overall population, and African American job candidates are far less likely to get hired than white job candidates. So when there's a lot of competition for jobs, it can hit the African American community especially hard.

ROSALSKY: Also, William says, African American entrepreneurs are struggling right now. According to recent surveys, minority-owned businesses have been far less likely to get government aid from the giant CARES Act passed by Congress.

VANEK SMITH: Whereas overall, about 38% of small business owners who applied for government aid reported getting it, only 12% of black- and Latino-owned businesses reported getting the aid they asked for.

ROSALSKY: And William says part of the problem could be the way the CARES Act was structured. Having employees makes it way easier to get government loans forgiven.

DARITY: And 96% of black-owned businesses have only a single employee - the person who owns the business themself. So, you know, a host of them would not be eligible for support because they don't have payrolls.

VANEK SMITH: William worries that once economies across the country start to open back up and businesses reopen their doors, many African-American-owned businesses just won't make it through.

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VANEK SMITH: And, Greg, in this week's newsletter, you're going to be drilling down into racial and economic inequality in Minneapolis - in your newsletter this week. Is that right?

ROSALSKY: Yeah. And it turns out that Minneapolis actually ranks near the bottom of the country when it comes to statistics on racial equality. You can subscribe to the PLANET MONEY newsletter at npr.org/planetmoneynewsletter.

VANEK SMITH: This episode of THE INDICATOR was produced by Camille Petersen, fact-checked by Britney Cronin. THE INDICATOR is edited by Paddy Hirsch and is a production of NPR.

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