How The COVID-19 Pandemic Is Deepening Economic Inequality In The U.S
LULU GARCIA-NAVARRO, HOST:
Talks are stalled over additional aid to help people, businesses, cities and states get through this pandemic, and no new negotiations are scheduled. The break in the $600 assistance payments is keeping markets on edge, and the Commerce Department says it's responsible for weak retail sales growth. And as Heather Boushey says, the shock of the pandemic and the government's halting response to it are deepening pre-existing problems in the American economy. She's the president and CEO of the Washington Center for Equitable Growth, and she joins us now.
HEATHER BOUSHEY: Thank you. It's a real pleasure to be here with you.
GARCIA-NAVARRO: You write that economic inequality has left the United States particularly vulnerable to shocks such as health, climate and economic crises. How so? How can inequality make an economy more vulnerable to an already dangerous shock?
BOUSHEY: So sometimes, we say the word inequality, we just think that it just means something about money, right, or it just means people in poverty. But really, what it means is that there are these fragilities that have been created across our economy and across our society.
You know, when you think back to February, just as COVID-19 was coming onto - into our country, and in so many workplaces across the country, people didn't even have the right to a paid sick day. They maybe didn't have access to affordable health care if they fear that they were sick. Those kinds of fragilities that are created by unequal access to good jobs are the kind of fragilities that made our society much more vulnerable to this crisis than our economic competitors.
GARCIA-NAVARRO: So what needs to happen, then, in your view?
BOUSHEY: One of the first places we need to look is to make our society more resilient to shocks in the future, is we need to make workers and their families more resilient. So that starts with a bucket of policies such as paid leave, making sure that people have access to safe and affordable child care, making sure that people have access to safe and affordable high-quality health care.
But then we also need to fix some of the big distortions in our economy caused by this massive inequality. The United States is an economy where firms have become increasingly concentrated over time, where in more and more industries, there's fewer and fewer big firms that are doing the most business, sort of squeezing out the little guy. This crisis is only going to exacerbate that.
Finally, we need to make sure that we have a tax system that provides the revenue the government needs to be prepared for crises as well as to do the day in and day out work of government. We gave these massive tax cuts in 2017 to those at the top of the income distribution, starving government of its capacity to act. We need to rethink that.
GARCIA-NAVARRO: You understand, of course, that you're wading into very political waters here. There are very different visions about what is important and essential in an economy like the United States. And this administration argues that they created one of the best economies that anyone has seen in recent history. When we consider when the pandemic struck, unemployment was at a historic low.
BOUSHEY: And indeed, given the very low level of unemployment that we saw in 2019 and 2018, economists would have predicted that wages would have risen much faster, especially for workers at the lower end of the wage spectrum. So while the economy was growing, it also had these underlying fragilities. And because of those tax cuts, we were unprepared for a crisis that experts had warned the government could happen.
Now we know the challenges due to climate change are right around the corner. The organization responsible for predicting hurricanes for this year has predicted so many that they're going to run out of letters of the alphabet. And yet the administration right now is saying, well, why don't we take money from the Federal Emergency Management system that helps with hurricanes and give that money to help unemployed people - sort of robbing Peter to pay Paul?
And so we can have arguments about how strong you want economic growth to be. But the proof is in the pudding. What we see is an economy that was incredibly fragile because it'd been terribly mismanaged.
GARCIA-NAVARRO: Heather Boushey is the president and CEO of the Washington Center for Equitable Growth.
Thank you very much.
BOUSHEY: Thank you. It's been a real pleasure. Transcript provided by NPR, Copyright NPR.