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Divergent recoveries—pandemic edition

from David Ruccio

The existing alphabet soup of possible recoveries—V, U, W, and so on (which I discussed back in April)—is clearly inadequate to describe what has been taking place in the United States in recent months.

That’s because there’s no single path of recovery for everyone. For some, the recovery from the pandemic crisis has been just fine, while for many others there has been no recovery at all. Instead, things are going from bad to worse. In other words, there’s a growing gap between the haves and have-nots—or, as Peter Atwater has put it, “there have been two vastly divergent experiences.”

That’s why Atwater invented the idea of a K-shaped recovery.

I think he’s right, although I don’t divide the world up in quite the same way.

The stem of the K illustrates the quick and deep crash that almost everyone experienced as the pandemic spread and large parts of the U.S. economy were shut down. Then, as time went on, with massive federal bailouts and businesses reopening, the arm and leg of the K have moved in very different directions.

For the small group at the top—including large corporations and wealthy individuals—there has in fact been a real recovery from the pandemic crisis. The downturn has turned out to be nothing more than a bump in the road. Businesses that were declared essential were able to purchase the labor power of workers and continue their operations, while others have been free to get rid of whatever workers they deemed unnecessary to making profits. And, in both cases, corporations on both Main Street and Wall Street were showered with support from an extraordinary array of government programs—from low interest-rates and Fed purchases of private bonds to forgivable loans and tax breaks—with little accountability or oversight.

stocks

The best illustration of their path to recovery is the rebound in the stock market, which by any measure (such as the Standard & Poor’s 500 or Dow Jones Industrial Average indices, in the chart above) has regained most of the ground lost in the crash earlier this year. The S&P, which stood at 3368.68 in mid-February, and fell to 2405.55 in mid-March, ended yesterday at 3251.52. Similarly, the DJIA, fell from a peak of 28996.11 to a low of 20117.20 and yesterday reached 26680.87. This rebounds both signals that investors are betting on a continued recovery in corporate profits and represents a growing claim on the surplus produced by workers.

The small group at the top of the U.S. economy is quickly climbing the arm of the K-shaped recovery.

Meanwhile, everyone else is headed in the opposite direction. They’re the “essential” workers who have been forced to have the freedom to continue to sell their ability to work to their employers and to either labor at home with little control over their working conditions or with the threat of spreading infections in their existing workplaces, or the tens of millions of other workers who have been laid off, had their hours shortened, or suffered pay cuts. We know how different their own experience has been from those at the top because initial claims for unemployment benefits are now more than 50 millionhunger and food insecurity are spreading, and they’re having difficulty paying their rent and mortgages.

employment income

The extent of the economic and social disaster for those at the bottom is perhaps best represented by the loss of employment income for households making up to $100 thousand a year (and therefore about half of American households). According to data assembled in the the Census Bureau’s weekly Household Pulse Survey, the share of households in those income groups has grown from just under 50 percent (for 23 April to 5 May, the first week when the survey was conducted) to 53.44 percent (for the latest week, 2 to 7 July).

The situation of American workers is clearly the leg at the bottom of the K, which represents no recovery at all.

The fact that the United States is currently undergoing a K-shaped recovery from the pandemic crisis should come as no surprise, and not just because the administration of Donald Trump and his allies in Congress have promoted and adopted policies that have both worsened the pandemic and shifted the burdens of the economic crisis to those who can least afford it. It’s also because the American economy and society were already characterized by grotesque levels of inequality stretching back at least four decades, which were in turn reinforced by the uneven recovery from the Second Great Depression under the previous administration. Trump and the “hacks and grifters” around him have only nudged things along in the same direction, creating even more powerlessness and hopelessness for the majority of the population.

The problem is, the majority of Americans at the bottom haven’t been heard for too many years, from long before the pandemic started to ravage the country. In the late 1960s, shortly before he was assassinated, Martin Luther King Jr. called their protests “the language of the unheard.”

Even earlier, the late John Lewis wrote (but was never allowed to deliver) a frank description of the situation in the United States that is eerily prescient of the current predicament:

This nation is still a place of cheap political leaders who build their careers on immoral compromises and ally themselves with open forms of political, economic and social exploitation.

That’s why, he wanted to tell those who participated in the 1963 March on Washington, “if any radical social, political and economic changes are to take place in our society, the people, the masses, must bring them about.”

The K-shaped form of the current recovery is both a testament to the compromises of the latest generation of “cheap political leaders” and a reminder that the “the people, the masses” are the ones who must bring about the necessary changes in American society to create a more equal social, political, and economic recovery.

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  1. Ken Zimmerman
    August 9, 2020 at 4:43 pm

    These are some of the most important—and challenging—issues involved in the study of social policy. How we view the conditions and consequences of social policies depends very heavily on how we understand the society in which such policies are formulated and implemented. At the center of this problem is the question of how we make sense of patterns of difference between individuals and groups in society. We might ask several questions about this issue of difference:

    ■ What sorts of differences are visible in our society?
    ■ What sorts of differences have consequences in our society?
    ■ What do we do about such differences?
    ■ Where do these differences come from?

    These questions lead to different tasks for social scientists. The first involves a measure of ‘mapping’ the society to identify what patterns of difference exist (for the social sciences are concerned with patterns rather than individual idiosyncrasies or random occurrences). The second of these questions also involves this sense of ‘mapping’ the society, but this time it involves searching for evidence of the consequences of these patterned differences. Do differences mean that people are treated differently? Do the differences result in unequal opportunities or outcomes for people? Do the differences influence people’s life chances: their educational, occupational, financial, familial or health prospects? Some differences, in other words, make a difference.

    The third question has historically been the primary focus of social policy as an area of academic enquiry. It has been concerned with the possibilities, policies and consequences of social action intended to remedy, control, or improve identified social conditions. For example, the earliest objectives of social policies in the UK, outlined in the Poor Law were addressed to concerns such as what to do with those who could not support themselves—the impoverished, elderly or disabled people who were unable to make a living. The difference addressed was the difference between the normal, able-bodied, employable population and those who, for one reason or another, could not or would not earn their livelihood.

    If we look back over this description of the concerns of the Poor Law, it is possible to see why the fourth question is so important to the study of social policy. What sorts of differences were being addressed in the Poor Law, and how are those differences understood or explained? When terms like the ‘normal, able-bodied and employable’ are juxtaposed to ‘the impoverished, elderly or disabled’ we are dealing with the consequences of processes of social construction. These divisions are not natural, inevitable, or intrinsic to the people being so described. They are the result of ways of thinking about, defining, and interpreting the social world. ‘Employability’ (or the lack of it) is a social characteristic rather than a personal attribute. It sums up a variety of social judgements about what sorts of people make desirable employees, and these judgements change over time and between societies. These issues form the core of social policy considerations. The construction of difference is a necessary starting-point for the study of social policy because how differences are constructed—the way they are made to mean something—is the basis from which decisions about social policies flow. How we define or interpret a pattern of difference has profound consequences for how it is acted upon. For example, if we view unemployment as a consequence of personal failings, we will react to it in a different way than if we see it as the result of economic mismanagement on a national or international scale.

    In considering social policy there are several kinds of social constructions of differences. First, and the kind most familiar to people are constructions that speak of the ‘natural’ basis of the differences in question. A whole range of differences in America and other societies are represented as being the result of natural, biological, or body-based distinctions. Thus, the different social roles, opportunities, and inequalities between men and women have long been accounted for by reference to the divergent biological capacities of men and women. The American Civil War was fought in large part as an effort to change the existing social construction of the differences between African Americans and Whites. This ‘naturalizing’ process of social construction must be examined in relation to other patterns of difference. What they have in common is that the construction of a basis in nature explains away social processes and affects the way social policies address these differences.

    This leads to such research foci as these:
    • implications for studying social problems and social policy.
    • How particular patterns of difference have been constructed.
    • The ways in which some differences are ‘naturalized’ and, second, the existence of competing or conflicting constructions of social differences. There is rarely one unchallenged construction of such patterns of difference.

    I have enclosed certain words and phrases in quotation marks. For example, ‘impoverished, elderly or disabled.’ This is a simple short-hand way of indicating that the words bracketed in this way are themselves social constructions rather than naturally occurring patterns or characteristics. So, ‘disabled’ here abbreviates a phrase that if written out in full would read ‘the group of people that our society currently conventionally categorizes as disabled and therefore treats as different from the norm of being able-bodied’. This use of quotation marks sometimes irritates readers, but I hope that indicating how long the sentences might get if authors did not adopt this convention will make its advantages clear.

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