‘K-Shaped’ COVID-19 Recovery Deepens Economic Disparity
While the onset of the novel coronavirus pandemic has had drastic ramifications for the United States’ economy, its toll has been unevenly harsh for the country’s poorest citizens.
Following a recession, a “K-shaped recovery” occurs when different segments of the economy recuperate at different rates, times, or immensities, according to Investopedia. Typically, following a recession, one can expect to see a V-shaped or U-shaped recovery signaling the trajectory of “economy-wide” variables, like total employment or Gross Domestic Product.
This is not the case in a K-shaped recovery. In this scenario, the trajectory of “disaggregated economic variables” splinters off from one another, depicting uneven paths of economic recovery.
Certain industry sectors — such as transportation, food service and entertainment — have been more deeply impacted by the COVID-19 pandemic. Although parts of the economy are stabilizing roughly one year after restrictions were put in the place, low-wage workers and people of color are statistically being affected at higher rates.
Since March 2020, 53% of American households report experiencing some form of income loss, according to polling analysis from the Associated Press-NORC Center for Public Affairs Research. The reasons for this loss of income stem from lay-offs, wage reductions, unpaid leave or having hours cut due to pandemic restrictions.
The AP-NORC poll was conducted among 1,434 Americans aged 18 or older from Feb. 25 to March 1 utilizing samples drawn from NORC’s probability-based AmeriSpeak Panel. This sampling was designed to be representative of the total U.S. population with a margin of error of plus or minus 3.4 percentage points.
Roughly 60% of Hispanic Americans and 51% of Black Americans indicated their household has experienced employment changes, according to the poll. Forty-two percent of White Americans reported employment changes because of the pandemic, a significantly smaller margin.
Employment changes within their households have caused “major impacts” on the financial situations of 45% of Black and Hispanic households, respectively. About 27% of White Americans, however, reported similar impacts on their financial situations following employment changes.
This contrast in experiences is seen within a multitude of other metrics, with 42% of Hispanic Americans and 40% of Black Americans reporting they have been unable to pay some bills in the past month. Only 17% of White Americans reported experiencing the same difficulties.
In the last year, 38% of Hispanic Americans and 29% of Black Americans reported experiencing a layoff in their household at some point in the last year. As with employment changes, White Americans have fared comparatively better in this metric with 21% reporting a layoff in their household this past year.
Since the beginning of March 2020, 15% of Americans have started a new job and 12% have undertaken an entirely new profession. Consequently, 17% received unemployment benefits in the last month.
Sixty-seven percent of respondents indicated their recent financial situation was “poor,” while 32% indicated it was “good.” Before COVID-19 was declared a national pandemic, 69% of surveyed respondents indicated their financial situation was good.
Although vaccine campaigns have slowly allowed pandemic restrictions to be lifted and caused some businesses to bounce back, others are still relying on initiatives like the Paycheck Protection Program or federal unemployment benefits to make ends meet.
As roughly 18 million Americans remain on the unemployment rolls, another 745,000 filed for unemployment benefits during the week of Feb. 22, according to Department of Labor statistics.
Reasons for cautious optimism persist despite the country’s overall weak job market, according to CNN’s “Back-to-Normal” index. Eighty-three percent of the economy is back to operating as it was prior to the pandemic, with all 50 states improving last week under the index.
While the month of March marks the one-year anniversary of a wave of economic woes due to the pandemic, it may also prove to be the turning point in the nation’s return to normalcy.
In The News
WASHINGTON — With the nation’s debt standing at a record $29 million, a growing number of Americans are growing increasingly... Read More
WASHINGTON — With the nation’s debt standing at a record $29 million, a growing number of Americans are growing increasingly concerned that unsustainable federal spending will upend the economy and ultimately, their personal well-being, finds a new analysis from the nonpartisan Peter G. Peterson Foundation. According... Read More
WEST LAFAYETTE, Ind. — A monthly measure of farmer sentiment rose last month, something it had only managed to do... Read More
WEST LAFAYETTE, Ind. — A monthly measure of farmer sentiment rose last month, something it had only managed to do once before in all of 2021, according to Purdue University's Center for Commercial Agriculture and the CME Group. The two entities said Tuesday their Ag Economy... Read More
WASHINGTON — Americans routinely tell pollsters they don’t like much of what goes on in the nation’s capital, but evidently... Read More
WASHINGTON — Americans routinely tell pollsters they don’t like much of what goes on in the nation’s capital, but evidently they do like one leader a lot – Chief Justice John Roberts. According to a poll conducted by the Gallup organization Dec. 1-16, he’s got the... Read More
WASHINGTON — A new, groundbreaking study suggests not only is there strong bipartisan support for corporate efforts to address environmental,... Read More
WASHINGTON — A new, groundbreaking study suggests not only is there strong bipartisan support for corporate efforts to address environmental, social and governance challenges, but that the bipartisan appeal of these initiatives dramatically increases among Americans under the age of 45. The study, “Unlocking the Bipartisan... Read More
WASHINGTON – Americans’ trust in the news media continues to plummet, dropping four percentage points from last year’s already low... Read More
WASHINGTON – Americans’ trust in the news media continues to plummet, dropping four percentage points from last year’s already low 36%, a new Gallup poll has found. The poll, which was released last week also found the media continues to be a decidedly politically polarizing issue... Read More
Most voters in the district represented by Rep. Marilyn Strickland support fiscal responsibility and want Congress to take a bipartisan... Read More
Most voters in the district represented by Rep. Marilyn Strickland support fiscal responsibility and want Congress to take a bipartisan approach. Fifty-seven percent believe members of Congress need to work across the aisle to deliver results for their constituents versus 37% who believe it is more... Read More