Who does the economy serve?
At Fourth Economy, we have been trying to understand the scale and scope of the economic disruption that has been generated by the COVID-19 pandemic. It is hard to find comparable events that can serve as a guide for what will happen, let alone when and how to respond. The economy, at least large parts of it are literally on pause, but when it is clear to hit the “play” button should it resume its familiar tune?
Fourth Economy’s vision is “a world where people are empowered to be co-creators of a sustainable economy and community.” Recent events have demonstrated the fragility of the U.S. economy, even while there are a few promising signs and some distressing signs of the resilience of our community bonds. Previous epidemics, like the Ebola epidemic in 2014-2015 taught us that community trust is critical to getting these diseases under control. We need to be doing all we can to strengthen and build community bonds so that we can get the immediate health crisis under control, but also so that we can manage the difficult decisions required to restore both our economic and social activity. A critical element in building trust is that these efforts be inclusive.
Fourth Economy has also stated that our purpose is “to ensure that the economy serves the people.” Lately, I have really been thinking about what that means. How well our economy served the people before this crisis is critical to whether we should be aiming to simply restore what was or seek a more fundamental renaissance. The U.S. economy has NOT served people well.
Source: Employment Projections program, U.S. Bureau of Labor Statistics
From 2018 to 2028, the occupations that are projected to add the most jobs are overwhelmingly in the lowest-paying occupations. With U.S. Median Household Income of about $60,000 ($60,336 to be exact) the occupations that pay less than 50 percent ($30K or less) outnumber the jobs that pay 150 percent by 5:1. There will be 2.9 million jobs, where even if both adults are employed in these jobs, they will still earn less than half of all U.S. households. Even worse, many of these occupations are in health care and food services, occupations that also face higher health risks during the current crisis.
Even before this crisis began, we faced severe shortages of affordable housing. We also face a severe deficit of public support for affordable housing. This was true before the current crisis, but it doesn’t seem like the crisis has in fact brought down enough of the walls that divide us. A recent article in the Star Tribune about how the pandemic will depress the production of affordable housing yielded little sympathy in the comments from readers:
Work hard, increase your income and *voila* you can afford it now. If you're a single person making minimum wage with 5 kids, then I say it's your life choices that are the problem, not the cost of housing.
You are in full charge of your income and your expenses - including where you live and what you live in along with all associated expenses - your lifestyle. If you are able bodied, it is not up to your neighbors to subsidize your housing.
I sincerely believe that we can and need to rebuild a more resilient economy, and that means one that is both equitable and inclusive. A key first step will be to reject the false choice between public health and economic vitality (see part 4 ). I don’t expect it to be easy, but perhaps as everyone begins to take stock of what really matters in their lives and they see the efforts of front line responders and the other workers putting themselves at risk and then realize that many of these same workers are the ones who need affordable housing, then maybe we can all be co-creators of a sustainable economy and community.