The pandemic has turned the spotlight on economic inequalities leaving the vulnerable communities to face the economic brunt of the crisis. Read to know more.
The COVID-19 outbreak has posed a great challenge for U.S. policymakers to consider and respond urgently to the underlying inequalities that are so clearly visible.
While the virus infects people regardless of race and wealth, the poor seem to be the most affected due to segregation by income, reduced economic mobility, and the high cost of medical care. The inability to afford the basic needs has pushed the low-income communities even further down the line and is more likely to be exposed to the virus, with higher mortality rates, and suffer economically.
In times of economic crisis, marginal groups are at the risk of succumbing to the pressure of a downward economic trend.
Economic Inequality: The Real Culprit
In the US, economic inequality is by far the closest link to a racial divide in income and wealth. According to a research report, poverty is most acute among Blacks and Latinos with 21 percent of Black people and 18 percent of Hispanic people living under the poverty line, compared to white people which are 8 percent. To supplement this data past recessions have affected Black and Latino families, partly because they have very little wealth to fall back on.
The gap is so wide that the lack of resources to stay protected against coronavirus has forced the poor with more chances of contracting it and subsequently spreading the virus.
The Health Scare
Low-income jobs like hospitality, transport, retail, and the gig economy cannot be done remotely, and in the U.S. the majority do not offer paid sick leave or health insurance. Less salaried people are often associated with a higher risk of chronic health conditions such as heart disease and diabetes, factors that mainly increase vulnerability to COVID-19. Most of the 40.6 million people living in poverty in the U.S. have no savings whatsoever to weather a lack of income, and even stock up on food.
While income support by the government in the form of unemployment benefits and stimulus is important it is not a solution but a temporary relief, long-term and targeted support becomes more important. One-time income support will not prevent families from facing eviction or foreclosure. People who lost jobs but are non-eligible for unemployment benefits will find it difficult to survive the pandemic and aftermath. Cheques issued by the government will not reach the eight million unauthorized workers, who generally earn low wages in hotels, restaurants, and on farms.
The government should make sure that all low-income workers and people who have lost wages must be supported. Direct payments should give assurances and promise child benefits and disability and social security benefits in the event of sickness, unemployment, or other lack of livelihood in situations beyond their control.
The Plight Of Taxi Drivers
Covid-19 has to be the nail in the coffin for the taxi industry based on the horrific number of suicides by taxi drivers in New York City in a year back before the pandemic due to the overwhelming debt and financial plight of medallion owners due to increasing competition.
According to an investigation, it was found that for over more than a decade, the powerful industry leaders channeled thousands of taxi drivers into reckless loans and extracted millions of dollars before the market collapsed.
In the process, these greedy business practices generated huge profits for brokers, bankers, investors, lawyers, fleet owners, and debt collectors. The leaders and Medallion brokers became multimillionaires as if the assets that they already possessed were insufficient.
The most affected were immigrant families whose life savings were gone forever leaving them shattered. Drivers were under debt as they could not repay and threatened an industry that has long defined the city of New York. The taxi drivers who are yet to come out of the backstabbing are now reeling under the pandemic crisis.
The taxi driver fiasco is just a tiny segment of the sufferings of the worker class. While the state and federal governments are working on solutions for coping with the economic meltdown, many Americans are helpless with a tough financial and very personal decision: do you keep housekeepers, caregivers, dog walkers, gardeners, and other workers on the payroll if their services are not needed or if they are unable to come to work right now?
Bottom LineThe concerns point to one common problem: how do we keep the income steady when the economy is showing the door for just the poor? The government initiatives are a huge step that might not be able to connect at an individual level. The show must go on and it is for those sitting at the top. Many will be exploited but the choice rests with the decision that you make. A low income can still be a better alternative than being jobless because using an emergency fund can help you do away with the regular expenses and focus on your savings either for the future or survive the pandemic.
By Karthik V.