In this miserable Covid-19 spring, it’s tempting for remote workers
to vent our frustrations with being hemmed in, forced to stare at
screens while unable to do much else other than walk around the block or
go to Costco. Yet the pain felt by the teleworking middle class is
dwarfed by that of working-class Americans.
Outside of nursing homes, the coronavirus has hit poor communities
hardest, a problem tied to living and working in close proximity with
the public. Unlike
the affluent
of Gotham, some 30 percent or more of whom, in certain neighborhoods,
were able to leave town and work remotely, few people in poor
communities have fallback options. They remain where they are, riding
public transit and enduring crowded conditions. The
far poorer Bronx has suffered
nearly twice as many deaths from Covid-19 as more prosperous, but even denser Manhattan.
Public-transit use appears to be a significant factor in infection, not only in New York but also in car-dominated cities like
Detroit,
Houston, and Los Angeles, where the poor constitute a disproportionate
share of riders. Living conditions for poorer populations represent
another factor, according to a recent study by the
Furman Institute
at New York University. In working-class communities, many residents
share homes or apartments with extended family. It’s difficult, if not
impossible, to socially distance or quarantine when you live in a
confined space containing multiple adults. This is particularly true in
Los Angeles County,
home to five of the ten most crowded zip codes—including the most
crowded—in the U.S. Living in multigenerational homes may be one reason
why the poor in areas like South Central Los Angeles or East L.A.,
according to
an L.A. County survey, have suffered virus
death rates twice those of better-off precincts.
Much the same pattern can be seen in Houston, where poor, often
immigrant families in areas like the First or Third Wards have
experienced far higher rates of infection and fatalities.
An analysis by the Houston Chronicle
revealed that seven of the ten zip codes with the highest rates of
infection were majority black and low-income communities. Some had
double or triple the average per-capita rate in the county.
Over time, the biggest impact of the pandemic, will likely be
economic. Income and capital could dry up, undermining cash-strapped
entrepreneurs and chipping away at the nonprofit safety belt that helps
poor communities endure harsh times. The
wage gains made during the first two years of the Trump administration among low-income workers could well evaporate. Almost
40 percent
of Americans making less than $40,000 a year have lost their jobs
during the pandemic. It’s not clear yet how many of those positions will
be regained as the economy reopens.
To a large extent, the public sector and those parts of the economy
that operate by keystroke—knowledge workers in fields like media,
finance, software, and accounting— have faced inconvenience but not the
threat of obliteration.
Salaried workers have been laid off at roughly half the rate of hourly workers. The
unemployment rate of those with less than a high school diploma jumped from 6.8 percent to 21.2 percent; for college graduates, it rose from 2.5 percent to 8.4 percent. The biggest
drops in hiring have
been concentrated in recreation and travel, mostly “personal contact”
jobs that employ many poor workers. Employment in this sector has
dropped 70 percent, while remaining stable in such fields as computer
networking, as well as throughout the entire public sector.
Hiring has taken place at Amazon warehouses, food-delivery systems,
and other “essential” businesses, but many workers in the inner cities
were employed in restaurants, hair salons, and across the vast
hospitality sector as hotel chambermaids, ticket sellers, shuttle-bus
drivers, and car-rental agents. These enterprises have been devastated.
In Southern California,
the largest job losses
have been in food preparation and personal care, both major sources of
employment for minorities and immigrants. “There’s a general paranoia
and people here are struggling,” observed
Rudy Espinoza,
executive director of the Leadership for Urban Renewal Network in East
L.A. “Here, this is not about convenience—it’s about putting food on the
table or paying the rent.”
Manufacturing job losses could intensify in states where lockdowns
extend over the summer. The potential relocation of Tesla’s Milpitas
plant due to the lockdown in Alameda County would not hit code-writing
Stanford graduates but largely working-class people from the far reaches
of the Bay Area and the
adjacent Central Valley.
Even in business-friendly Houston—far less affected by the
virus—things could be tough. In its most recent update, the Texas
Workforce Commission reported 286,000 unemployment benefit
claims across the Houston region, the highest number in the state. Food-service and retail workers lost 33,000 jobs, and people working largely
blue-collar jobs in oil and gas were also hit hard.
In minority and working-class neighborhoods, small businesses are
often the only local employers. They’re also, in many cases, the bulwark
of local society, supporting churches, charities, and community events.
In many Latino and Asian areas, entrepreneurship provides a way for
those with limited education and language skills to boost themselves
into the middle class. During the pandemic, many such firms have taken
on
debt that they may have trouble repaying. According to
the JP Morgan Institute, 50 percent of small businesses have 15 days or less of cash on hand. If the shutdown lasts much longer, as many
as three quarters of independent restaurants won’t survive.
Many of these small companies, notes John Hobson, executive director
of Cielo, a nonprofit in Orange County, lack the financial records or
bank relationships needed to access stimulus funds. Irinia Soto Welty,
executive director of
OC Mecca,
another nonprofit assisting businesses in poor areas, says that
business owners may be limited by their immigration status and often
have limited English skills. Many small restaurateurs also lack the
expertise and technical resources to shift their business model from
dine-in to pick-up or delivery, as well-capitalized chain restaurants
have done.
In places like Leimert Park, a predominantly African-American,
middle-class enclave, many local businesses—including popular coffee
shops, boutiques, and barber shops—remain closed, and may never reopen.
Mass unemployment, notes attorney Diane Robertson, also harms local
landlords, who, with tenants unable to pay, lack the resources to absorb
months of losses. “These small landlords have been forgotten,”
Robertson suggests. “There’s a growing sense of frustration.”
A discouraging mood is sweeping these communities, which struggle in
the best of times. “There is a lot of resentment out there now,”
Espinoza says. “People are struggling more than ever and many of them
blame the government for letting them down.”
Large cutbacks in social services from the now fiscally stressed state will likely not ease tensions.
The summer could see mounting disorder, particularly with the influx, in many cities, of
criminal elements, a result of pandemic-induced releases from jails and prisons, including in
New York.
Evidence already exists that some of the released are exercising their
new freedom by committing crime, often victimizing the poorer
communities that they came from. At a time when cities like Los Angeles
and even-crime ridden
Baltimore and
Chicago adopt “tough” policies about enforcing Covid-19 lockdowns and
arresting violators, a cohort of criminals has been put back out on the streets.
The pandemic could accelerate the exodus of middle-class residents
and employers out of disorderly areas. Extended lockdowns, in tandem
with high housing and energy prices, will hurt the communities that need
the most help in reopening and reviving their economies. The pandemic
has revealed, and widened, the enormous divide between the poor and
working class, on the one hand, and the upper-middle class, on the
other. The virus has already made an impact on American public
health—but if its economic consequences are not addressed, it could also
infect the urban social order.
Charles Blain (@cjblain10)
is the president of Urban Reform and Urban Reform Institute. A native
of New Jersey, he is based in Houston and writes on municipal finance
and other urban issues. Joel Kotkin (@joelkotkin)
is the Presidential Fellow in Urban Futures at Chapman University and
executive director of the Urban Reform Institute. His new book is The Coming of Neo-Feudalism.
https://www.city-journal.org/working-class-economic-stress
