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U.S. Household Wealth Rose Before the Pandemic, but Inequality Persisted

Families were making gains in income and net worth in the three years leading up to the pandemic, according to Federal Reserve data released on Monday, but wealth inequality remained stubbornly high.

Median household net worth climbed by 18 percent between 2016 and 2019, the Fed’s Survey of Consumer Finances showed, as median income increased by 5 percent. The survey, which began in 1989, is released every three years and is the gold standard in data about the financial circumstances of U.S. households. It offers the most up-to-date and comprehensive snapshot of everything from savings to stock ownership across demographic groups.

The figures tell a story of improving personal finances fueled by income gains, the legacy of the longest economic expansion on record that had pushed the unemployment rate to a half-century low and bolstered wages for those earning the least. Yet despite the progress, massive gaps persisted — the share of wealth owned by the top 1 percent of households was still near a three-decade high.

Nearly all of the data in the 2019 survey were collected before the onset of the coronavirus. Economists worry that progress for disadvantaged workers has probably reversed in recent months as the pandemic-related shutdowns threw millions of people out of work. The crisis has especially cost minority and less-educated employees, who are more likely to work in high-interaction jobs at restaurants, hotels and entertainment venues. Many economists expect the crisis to worsen inequality as lower earners fare the worst.

“The economic downturn has not fallen equally on all Americans and those least able to shoulder the burden have been hardest hit,” Jerome H. Powell, the Fed chair, said at a news conference earlier this month. “In particular, the high level of joblessness has been especially severe for lower wage workers in the services sector, for women and for African-Americans and Hispanics.”

The newly released 2019 data suggest that families with lower pretax incomes were catching up to their richer counterparts between 2016 and 2019. Families with high wealth, college educations, and those who identified as white and non-Hispanic — who all have higher incomes — enjoyed comparatively smaller earnings growth over the period, the Fed said.

Even so, inequality in both income and wealth remained high.

Since the survey started, families in the top 1 percent of the income distribution have gradually taken home a bigger share of the nations’ income while the share of the lower 90 percent of earners has gradually fallen. The bottom 90 percent’s income share increased slightly in 2019 — reversing a decade-long decline — but a Fed report on the data noted that the rebound happened from record lows and only took the group back to roughly its share from 2010 to 2013 share.

Affluent families have held a growing share of the nation’s wealth over recent decades, and they retained that advantage as of 2019. In 1989, the top 1 percent of wealth holders held about 30 percent of the nation’s net worth, but that had jumped to nearly 40 percent in 2016 and was little changed in the latest survey, Fed economists said.

Families in the bottom half of the wealth distribution held just 2 percent of the nation’s wealth in 2019, the Fed data and a related report showed.

The wealth measure does not include defined benefit pension plans and Social Security benefits, which are hard to value. An augmented measure that incorporates pension plans still shows that wealth at the top has still risen, but by less, according to a Fed report.

The concern now is that inequality — especially in income, which derives heavily from wages — could increase again as workers at the bottom lose jobs.

The unemployment rate was 8.4 percent in August, according to the Labor Department, but the rate was 13 percent for Black people. Likewise, the jobless rate for those with less than a high school diploma was more than twice that for adults with a bachelor’s degree or more.

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Here’s How Moving to Work Remotely Could Affect Your Taxes

If you decided to ride out the pandemic at your out-of-state vacation house or with your parents in the suburbs, you may be in for an unpleasant reality: a hefty tax bill.

Given the complexity of state tax laws, accountants are advising their clients to track the number of days they spend working out of state. Some states impose income tax on people who work there for as little as a single day.

Even before the pandemic, conflicting state tax rules were creating issues for the increasing number of people who were working remotely, said Edward Zelinsky, a tax professor at Yeshiva University’s Cardozo School of Law.

“In the last six months, this has gone from a big problem to a humongous problem,” Mr. Zelinsky said. He knows from personal experience: He lives in Connecticut but works in New York and has paid tax on his New York-based salary to both states.

You might, depending on the state and how long you have been there.

The state where you have your primary residence typically can tax your worldwide income, and any state where you earn income also has the right to tax you on the income you earn in that state, said Kirk Stark, a professor of tax law at the University of California, Los Angeles.

“That immediately creates a possibility of two separate states taxing the same income,” Mr. Stark said.

Many states offer credits for taxes paid to other states, and that may ease the burden. But if the state where you have relocated does not have a reciprocity agreement with the state of your primary residence, you could be subject to double state-income taxation.

You have less to worry about if you have relocated to one of these 13 states, which have agreed not to tax workers who have moved there temporarily because of the pandemic: Alabama, Georgia, Illinois, Indiana, Massachusetts, Maryland, Minnesota, Mississippi, Nebraska, New Jersey, Pennsylvania, Rhode Island and South Carolina, according to the Association of International Certified Professional Accountants.

Unfortunately not, unless you are prepared to move there permanently.

Navneet Garodia, 35, a financial services professional, has an apartment in Jersey City, N.J., but moved in July to his in-laws’ house in Florida so that he and his family could have more space. He plans to reduce his New Jersey tax payments to account for the days he has worked from Florida, a state that does not impose income tax on residents.

“I shouldn’t be paying the amount of taxes I am in New Jersey, and Florida has no taxes,” he said. He has taken steps to show tax authorities that he is, in fact, in Florida, such as forwarding his mail to his address there.

But Mark S. Klein, the chairman of the law firm Hodgson Russ, says it is not that simple, as long as taxpayers still have a primary residence in the state where they had been working and intend to return there. The same applies for people who have moved to the Hamptons for the last few months — they will not be exempt from New York City tax if they return to the city once the pandemic is over.

“The rule with changing your domicile is you have to leave New York City, land in a new location and stick the landing,” Mr. Klein said.

Yes. Mr. Klein said more than 50 of his clients had moved to Florida, Texas, Nevada or Wyoming since March.

“It’s not a coincidence that these are no-tax states,” he said. The other states with no income tax are Alaska, South Dakota and Washington. Many of his clients have kept their residences in California or New York, he said, but will plan to spend the majority of the year in their homes in lower-tax or no-tax states.

Kent and Ruby Santin, who had lived in Long Island City, Queens, said they were looking to buy in New York when the pandemic hit. Instead, seeking better access to the outdoors, they changed course and bought a house on Lake Tahoe in Nevada.

The lack of income tax there was also a big plus. “That was part of the decision, to be totally honest,” Mr. Santin, 30, a management consultant said.

“Federalism,” Mr. Zelinsky said. Under the U.S. Constitution, states are permitted to create their own tax rules.

“What we’ve learned in the last six months are the benefits and the disadvantages of federalism,” he said. The benefits include governors who acted responsibly in managing the pandemic who “can make up for deficiencies of the federal government,” he said.

“The disadvantages are that states are going to have 50 different tax rules.”

Auditors are persistent, especially in New York. They will want to know how many days you have been in a state and will check your phone records, your credit card receipts, your voter registration, your travel records and details indicating how permanent your second residence is, including where your children are enrolled in school.

Even the nurses who came to New York to treat coronavirus patients will be subject to New York income tax if they worked in the state for more than 14 days, Gov. Andrew M. Cuomo said in May.

“We’re not in a position to provide any more subsidies right now because we have a $13 billion deficit,” Mr. Cuomo said at a news conference.

Nishant Mittal, the general manager of Topia Compass, which offers an app to help people keep track of their whereabouts for tax purposes, said he saw a 513 percent rise in subscribers in June, compared with June last year.

He said most of his clients did not envision a situation in which they would be working from the office as much as they did before the pandemic. “At this point, it’s no secret that this is going to be a big headache,” he said.

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America’s Retirement Race Gap, and Ideas for Closing It

The protest movement across the United States this summer has prompted a national conversation about ways to correct the acute economic inequities facing Black and other Americans of color. Those inequities don’t end when people retire.

Racial gaps in retirement security were large before the coronavirus struck, and the economic disruptions caused by the pandemic could worsen the problem.

Solutions will depend, in part, on addressing the structural racism in American society — but policymakers also have proposed ideas for shrinking the gap more quickly.

Since the pandemic hit, unemployment rates for older Black and Latino workers have been much higher than for their white counterparts, and evidence is mounting that millions of older workers will retire prematurely. That will mean sharp reductions in Social Security income, savings and costly disruptions in employer-provided health care that will hit nonwhite workers especially hard.

But the gaps in resources for retirement were large before the pandemic. In 2016, the typical Black household approaching retirement had 46 percent of the retirement wealth of the typical white household, while the typical Hispanic household had 49 percent, according to a study by the Center for Retirement Research at Boston College.

The result: At a time when many seniors struggle to make ends meet, Black and Latino retirees are especially likely to lack sufficient resources. Two-thirds of single Black retirees — and three-quarters of single Latinos — have incomes below the Elder Index, a data set from the University of Massachusetts Boston that aims to measure the capacity of older people to cover basic living expenses. By contrast, half of white seniors have resources below the index.


Credit…The Urban Institute

The disparities stem from racism in the labor market, says Kilolo Kijakazi, a fellow at the Urban Institute who has written extensively on income, wealth and race. “We have a history of discrimination in hiring, pay, promotions and benefits. Discrimination in hiring also contributes to occupational segregation,” she said.

Labor inequities began with the enslavement of Black people, she adds. “White people dealt in human trafficking of people of African descent in order to create wealth for white people, but Black people did not benefit from the wealth of their labor. After Emancipation, we had laws and regulations designed to maintain that effect and even strip Black people of wealth they were able to create for themselves in the face of these odds.”

Policies served as barriers to wealth accumulation by Black people. The Jim Crow-era Black Codes restricted opportunity in many Southern states; racially restrictive covenants barred them from buying homes in white neighborhoods; and redlining practices made mortgages hard or impossible to obtain. The inequities have compounded over time, as families were unable to transfer wealth to subsequent generations.

“The way that wealth is generally created for most Americans is, wealth begets more wealth,” says Darrick Hamilton, an economist and executive director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University. “Having access to a capital foundation that puts you into assets that will passively appreciate over your life — that’s how most Americans generate wealth.”

Credit…Ty Wright for The New York Times

Social Security helps to level racial inequity in retirement. That’s due in part to the program’s progressive benefit formula — it returns a higher percentage of pre-retirement income to lower-income than higher-income workers. And unlike private pensions and homeownership, nearly all Americans participate in Social Security.

“The universal nature of Social Security is a big factor,” says Geoffrey Sanzenbacher, a research fellow at the Center for Retirement Research and co-author of the study.

The center measured all retirement wealth, including income from Social Security, employer-sponsored retirement plans, other financial assets and home equity. When Social Security is excluded, Black Americans have just 14 percent the wealth of whites, and Latinos have just 20 percent.

Several ideas have surfaced for changing Social Security that could close the gap further — but the most important might fall into the category of “do no harm.”

Some policymakers have pushed to raise Social Security’s full retirement age — when you can receive 100 percent of your earned benefit — as part of the solution to the program’s long-term financial shortfall. But workers of color earn less, have lower life expectancy and tend to work in physically demanding occupations that become more difficult to continue at older ages. For example, 50 percent of Black workers ages 55 to 62 reported in 2014 that they have jobs requiring “lots of physical effort,” compared with just 32 percent of whites.

Under the current system, filing at the earliest age, 62, gets you 75 percent of your annual full benefit; every 12 months of delay past your full retirement age (currently around 66, depending on your year of birth) gets you an additional 8 percentage points until you turn 70.

Retirement ages already are rising gradually to 67 from 65 under changes enacted in 1983. The Boston College researchers note that any further increase in full retirement ages would increase retirement wealth inequity and have a disproportionate impact on minority households.

What’s more, the average longevity of Black Americans is shorter — in 2014, their average life expectancy from age 65 was 18.1 years, compared with 19.3 years for whites, according to the Centers for Disease Control and Prevention. And the expectancy for Black men was even shorter, at 16.1 years.

“When you lengthen the retirement age to get the full benefit, you’re putting a cut on the people who are going to die younger,” says William E. Spriggs, chief economist for the A.F.L.-C.I.O. and a professor at Howard University. “Instead, we should be raising the tax on the higher-income people, who are going to live longer, and stop playing with the retirement age.”

One leading progressive organization would like to do more to address that issue. The group, Social Security Works, has proposed updating the current early retirement reductions, which have not been revised since 1956.

The percent of full benefit a worker could receive at age 62 would increase to 85 percent, gradually rising to 100 percent at full retirement age.

This change could be especially helpful to people of color if early retirement accelerates because of the pandemic.

Another Social Security change that Ms. Kijakazi and other experts think could help is to establish a more effective basic minimum benefit that ensures seniors don’t live in poverty. Currently, Social Security has a special minimum benefit, but its value has evaporated relative to standard benefits because its value is pegged to consumer inflation rather than indexed to wage growth, which generally rises more quickly. Several Social Security proposals from Democrats have called for a new minimum benefit that would provide a supplement using a sliding scale starting at full retirement age.

Increasing benefits for workers who enter and leave the labor force more frequently also could help. The current Social Security benefit formula is based on a worker’s highest 35 years of earnings; reducing that to 30 or even 25 would have the effect of increasing the adequacy of benefits for people who leave the work force to provide care or because of job loss.

A caregiver credit could be created that permits workers to earn Social Security credits for time devoted to that work. The idea has been embraced by some advocates and legislators, and included in bills introduced by Representative Nita Lowey, Democrat of New York, and Senator Chris Murphy, Democrat of Connecticut.

Professor Hamilton has proposed creating a federal program of “baby bonds,” which would provide every child with a government-funded trust account at birth, starting with a $1,000 contribution; those born into lower-wealth families would receive more contributions over time, and the accounts would benefit from compound interest growth.


Credit…Kathryn Gamble for The New York Times

Baby bonds were a plank in the presidential campaign platform of Senator Cory Booker, Democrat of New Jersey. Senator Booker and Representative Ayanna Pressley, a Democrat from Massachusetts, have sponsored bills in the Senate and House that would fund accounts guaranteed to accumulate to $46,531 at age 18 for children born into the lowest-income families, according to a press officer for Mr. Booker. The accounts would be managed by the Treasury and grow with a guaranteed interest rate and inflation protection, probably invested in special Treasury securities.

Use of the funds would be restricted to what Professor Hamilton calls “asset-enhancing endeavors,” such as buying a home, receiving a debt-free education or starting a business.

“The idea here is to ensure that access to capital is not limited to those that receive a trust fund because of the family that they’re born into,” he said. “And what we do to help younger people will have a dramatic impact on how they finish.”

Professor Hamilton’s version of the baby bond also would allow account owners to convert their funds into Individual Retirement Accounts. “If they don’t want to use the money earlier, they can use it when they are ready or let it go all the way to retirement.”

The idea for baby bonds was included among policy recommendations written jointly by allies of Joseph R. Biden Jr., the former vice president, and Senator Bernie Sanders of Vermont, which were delivered to Mr. Biden last month.

Professor Hamilton said he thought of baby bonds as a bit different from reparations for slavery, since they would be paid — at some level — to all Americans and the benefit is prospective, rather than retroactive.

“But I do describe baby bonds as anti-racist,” he said. “Wealth disparity probably is the most cumulative indicator of our intergenerational racist society.”

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As $600 Unemployment Benefit Expires, Many Are in Jeopardy

For Sara Gard, the government’s safety net moved smoothly into place when the coronavirus pandemic upended her family’s lives. Jobless benefit checks began arriving a few days after she was furloughed in April from an entertainment company in Atlanta. A $600 weekly supplement, part of an emergency federal program, would cover the mortgage until her company resumed operations — probably in June.

June came and went, and the reopening was pushed to August. Now August is near, the business is still shuttered and the weekly benefit booster has run out.

“When the $600 is gone, we’re going to totally have to rethink our lives because we don’t have a way to pay the mortgage,” Ms. Gard said. Without it, her weekly benefits from the state total $300. Her mortgage is $1,700 a month.

Ms. Gard is one of roughly 30 million Americans who are getting unemployment payments — a staggering figure that reflects one of the country’s most calamitous economic events.

But the stark urgency that faces families perilously close to losing their homes, skipping medical treatments or missing meals because they can’t afford food has not extended to Washington. More than two months after House Democrats approved another round of emergency relief, Senate Republicans and the White House put forward a proposal this week with far different priorities. Rather than restoring the $600 supplement, they would replace it with a $200 payment, saying the larger sum discourages looking for work.

The Gards recognize that they and their two children are luckier than many families. Already nearly 11 percent of Americans say they live in households where there is not enough to eat, according to a recent survey by the Census Bureau. More than a quarter have missed a rent or mortgage payment and doubt they will make the next one. Forty percent of adults have delayed getting medical care.

Ms. Gard’s husband, Matt, has kept his hospital maintenance job, and her employer of 15 years continues to pay its portion of the cost of her medical insurance.

But she has to come up with her part — $350 a month — while dealing with several other bills. “I am our family’s major breadwinner,” said Ms. Gard, 39, who had just gotten a raise that lifted her annual salary to $80,000.

They also have some savings — a comfort when more than 40 percent of American households lack cash to cover an unexpected $400 expense. That cushion was crucial last week when the Gards’ air-conditioning system suddenly died. The repair gobbled up what would have been a few months’ worth of mortgage payments.

Delaying wasn’t an option, Ms. Gard explained: “Georgia in August.”

Without further information on when she might be rehired, Ms. Gard has started updating her résumé, and reaching out to recruiters and contacts on LinkedIn.

Then her school district announced that all teaching would be online in the fall. Her mother, 71, used to pitch in to care for her children, 2 and 5, but Ms. Gard worries about the health risk, so child care is another issue.

“I have the month of August to figure out where September’s mortgage payment and everything else will come from,” she said.

As the economy falters, pain is everywhere. Assistance, though, is more uneven.

Normally, individual states run their own unemployment programs, setting different benefit levels and eligibility rules. On average, benefits replace about 45 percent of a worker’s weekly paycheck. Freelance, self-employed and part-time workers, who didn’t qualify for state benefits but received funds through the federal Pandemic Unemployment Assistance program, tended to get a much smaller fraction of their previous earnings.

That is where the extra $600 a week came in. It was meant to make up for lost income and ensure recipients had enough money to buy food, pay rent, keep the lights on, afford medical prescriptions or make car payments. Lawmakers settled on a lump sum as the quickest and easiest way to deliver assistance — given the limited capabilities of already overwhelmed state unemployment networks.

The money was crucial in supplying the economy with fuel to keep the engine going, economists say. Like any one-size-fits-all measure, however, the $600 supplement fell outside the target zone in many instances. Roughly two-thirds of workers ended up with more income than they would have earned had they not lost their jobs. The windfalls angered critics who warned of ballooning government expenditures and disincentives to work — despite a severe shortage of available jobs.

Some recipients said they could manage without the bonus. Kimberly Zaiger, for example, lost her job as a convention services manager at a hotel in San Antonio, Texas, in March. The extra money “was helpful,” she said, enabling her to offer some financial help to her grown children, but “not crucial.”

Ms. Zaiger, 52, will still get $521 a week in regular state jobless benefits in addition to a share of her ex-husband’s military pension. She also has savings and a fiancé who is working and splits some bills.

“I’ve been crunching the numbers and prioritizing and I’ll be fine,” she said.

But for others, the weekly $600 made the difference between staying afloat and ruin.

Rebecca Mallery, 46, was cobbling together a living from three jobs when the coronavirus shut the economy. She lost them all on the same day: March 15.

Her earnings had averaged less than $250 a week — compared with the $600 in supplemental pandemic unemployment assistance that arrived with her unemployment insurance.

But without any supplement, she faces bankruptcy.

Credit…Joe Buglewicz for The New York Times

She qualifies for unemployment benefits for only one of her jobs, a part-time gig conducting surveys for the Las Vegas Convention and Visitors Authority. That comes to $96 a week. With that and a small monthly disability check, she has enough to cover her $815 in monthly rent, but not much else.

A single mother with a 9-year-old son, Ms. Mallery lives just across the Nevada border in Arizona and has been looking for work. But with the tourism industry struggling, there isn’t much available.

“There’s just nothing left out there right now,” she said. Even if there were, she wonders how she would manage if schools don’t fully reopen and she has to look after her son during the day. “How do you go to work?” she said. “When you’re a single parent, that leaves you with nothing, there are no options.”

She worries that a job that involves contact with the public puts her at higher risk of exposing her mother, who has cancer, to the virus.

When the Lowe’s near her reopened, though, she quickly applied. “I was out in the garden center, shuffling around cactuses in 100-degree heat, but it was great,” she said. “I was glad to be working.” But she picked up only a couple of shifts.

With the extra unemployment benefits running out and little hope of finding steady work, Ms. Mallery is applying for subsidized housing, even though she hates to leave her townhouse, which has three bedrooms and a yard where her son can play.

“I can’t use any of my credit cards anymore — they’re all maxed out,” she said. “I’m going to have to declare bankruptcy.”

Congressional Democrats have pushed for another $3 trillion relief package that would preserve the $600 weekly supplements through January. Senate Republicans and the administration have countered with a $1 trillion proposal that would reduce the extra benefit to $200.

That smaller sum would more than replace what Ms. Mallery earned from her three jobs before the pandemic. Other workers, though, would be left without enough to cover the essentials.

In Chicago, more than 1,700 miles away from Ms. Mallery’s home, Grey Parker has been trying to map out a budget for the next few months.

Before the pandemic, he had snagged his dream job, a quality control engineer at Production Resource Group, one of the largest live-entertainment production companies in the world.

As coronavirus lockdowns shut down one live event after another, Mr. Parker was furloughed. His wife’s part-time work cleaning houses dried up as well.

His package of jobless benefits, including the supplement, replaced about half of their $80,000 to $90,000 annual income.

Money was tight, said Mr. Parker, who has a 6-year-old daughter, but “we weren’t worried about food, and we weren’t worried about rent.”

Without the extra weekly benefits, Mr. Parker will receive $350 a week. He contacted his utility company to set up a deferred payment plan and arranged to start receiving food from local food banks.

But he can’t figure out how to keep paying the $1,800 rent for his house beyond September.

“We are now facing potential ruin within a couple of months,” he said.

He also worries about his health. Mr. Parker, 50, has a vascular disease called thrombosis, a blood-clotting disorder that puts him in a high-risk group for complications if he were to contract Covid-19. Even with the $600 supplement, he didn’t have enough money for the $240 monthly cost of continuing his health insurance.

Without insurance, though, the cost of the daily medication he takes to prevent blood clots rose from $10 a month to $500 — far more than he could afford. In the first few weeks of his furlough, he rationed his medication, taking only half the amount he needed, which gave him a frightening series of symptoms: bruising, dizziness and an increased risk of stroke. He recently qualified for emergency assistance from the pharmaceutical company Bristol Myers Squibb, which will provide a 90-day supply. After that, Mr. Parker is unsure of what to do — maybe ask for donations through GoFundMe.

This week, just after the final jobless benefit supplements were sent out, Mr. Parker learned that his company was extending the furlough through September. He hopes to return to work, but doubts that the live-event industry will be back in the fall. Even if it is, he said, his medical condition will make him think twice about returning to work before a vaccine is available.

The weekly $600 premium was a life preserver. “It gave us our one sense of security,” he said. “Now that’s gone.”

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Job or Health? Restarting the Economy Threatens to Worsen Economic Inequality

WASHINGTON — Efforts to quickly restart economic activity risk further dividing Americans into two major groups along socioeconomic lines: one that has the power to control its exposure to the coronavirus outbreak and another that is forced to choose between potential sickness or financial devastation.

It is a pick-your-poison fact of the crisis: The pandemic recession has knocked millions of the most economically vulnerable Americans out of work. Rushing to reopen their employers could offer them a financial lifeline, but at a potentially steep cost to their health.

State and federal officials have nowhere near the testing capacity that experts say is needed to track and limit the spread of the virus, and there is no vaccine yet. But states are already reopening, urged on by President Trump, who is eager to restart the United States economy.

That push is likely to exacerbate longstanding inequalities, with workers who are college educated, relatively affluent and primarily white able to continue working from home and minimizing outdoor excursions to reduce the risk of contracting the virus.

Those who are lower paid, less educated and employed in jobs where teleworking is not an option would face a bleak choice if states lift restrictive orders and employers order them back to work: expose themselves to the pandemic or lose their jobs.

That disempowered group is heavily black and Latino, though it includes lower-income white workers as well.

“It’s sad and scary,” said Tina Watson of Holly Hill, S.C., who has seen her hours cut in half at the Wendy’s where she works. Though her income has dropped from that cutback, she is worried about having to interact with customers when the state relaxes limits that have forced the restaurant to operate as drive-through only in recent weeks. “I’m feeling like my life is at risk if they open up our dining,” Ms. Watson said.

A growing share of workers is increasingly stuck with that choice.

The governors of Georgia and South Carolina have begun allowing some businesses to reopen, even though both states continue to see new infections and what the Centers for Disease Control and Prevention call “widespread” community spread of the virus.

On Friday, Gov. Brian Kemp of Georgia allowed gyms, nail and hair salons, and bowling alleys to begin operating, with restaurants and movie theaters allowed to open on Monday. Colorado, Minnesota, Mississippi and Ohio are also allowing some businesses to start operating again.

Not all businesses will decide to reopen even if they are allowed to; many will choose to stay closed, fearing too few customers to make it worth the cost. That was the situation in parts of Georgia on Friday, as many establishments kept their doors shut. But furloughed workers whose employers recall them to their jobs would in most circumstances lose their unemployment benefits, even if their pay might not return to the levels they were earning before the crisis.

That is particularly difficult for manicurists or wait staff who rely on tips from customers who might not show up. They would also lose out on both regular unemployment benefits and an additional $600 a week from the federal government.

Rashad Robinson, the president of the racial justice advocacy group Color of Change, said Georgia’s governor “has targeted a whole set of businesses where black people both work and patronize.” For those workers and customers, he said, “it is an absolute death sentence.”

“The inequality we’re seeing isn’t unfortunate like a car accident,” Mr. Robinson said. “It’s unjust. It’s being manufactured through a whole set of choices.”

Even though they face higher risks from reopening, a small but meaningful share of financially hurt workers is clamoring to return to work. One in 11 Americans, according to national polling data by the digital research firm Civis Analytics, has lost a job, hours or income — or knows a family member who has — during the pandemic but opposes mandatory lockdowns.

Americans who earn $50,000 a year or less are more than twice as likely to say they or a family member have lost jobs amid the crisis as those who earn more than $150,000, the polling found. Higher earners and whites are far more likely to say they can work from home during the pandemic than lower earners and black and Latino Americans, according to an April poll for The New York Times by the online research firm SurveyMonkey.

The University of Chicago economists Simon Mongey and Alex Weinberg released a study last month on the Americans who work in jobs that require people to be in close physical proximity (like nail salon workers) or allow little chance to work from home (like fast-food or maintenance workers). They found those workers were disproportionately nonwhite, low income, born outside the United States and not college graduates.

“If it’s a fast reopening,” Mr. Mongey said, “they’re going to be in closer proximity and face higher health consequences.”

Black and Latino Americans have less ability to withstand a prolonged job loss than whites, because they entered the crisis with lower incomes and less wealth. The median black household had just under $18,000 in wealth in 2016, Federal Reserve statistics show, while the median Hispanic household had just under $21,000. The median white household had nearly 10 times more: $171,000.

In 2018, the typical Hispanic household earned three-quarters of what a typical white household earned, according to census data. The typical black household earned three-fifths of what the typical white household earned, and their household income had yet to return to pre-financial-crisis highs.

The virus has only exacerbated that inequality, with minorities suffering both higher death rates and more financial harm.

In New York City and across the country, black and Latino Americans are dying at higher rates from the virus than whites. Economic polling data shows they are also losing their jobs and income to an outsize degree. In Minnesota, the share of black workers filing for unemployment over the last month is nearly 50 percent higher than the share of white workers.

The Civis Analytics polling over the last several weeks found that black and Latino Americans were far more likely than whites to report that they had lost a job or income from the virus, or that it had caused them to miss a rent or mortgage payment or face eviction.

Calculations by the Center for Economic and Policy Research found that black and Latino Americans were overrepresented in many “essential” jobs of the pandemic, like grocery store clerks and delivery drivers. In New York City, three-quarters of front-line workers in the pandemic were Americans of color. Nationwide, about one in five black workers were in the health care industry last year, compared with about one in eight white workers, Bureau of Labor Statistics data shows.

The risks and damage from the virus are “disproportionately landing on the black and brown workers that are disproportionately in minimum-wage services jobs,” said Mary Kay Henry, the president of the Service Employees International Union.

Researchers from the JPMorgan Chase Institute warned this month in a report that the coronavirus recession would hit black and Hispanic families harder in terms of lost income, forcing them to cut back their spending to a greater degree than whites, because black and Hispanic families have fewer savings to fall back on.

“There could be immense and devastating income effects that could be involved with this evolving depression,” said William A. Darity Jr., an economist at the Sanford School of Public Policy at Duke University, who is a leading scholar of economic discrimination in the United States. Inequality, he said, “has been horrendous in recent years, and I can only imagine those disparities would get worse.”

Avik Roy, a former adviser to the Republican presidential campaigns of Rick Perry and Marco Rubio, is now the president of a center-right think tank called the Foundation for Research on Equal Opportunity, which this month released a plan to quickly restart much of the economy. It includes reopening schools while carrying out an aggressive system of tracing the contacts of Americans who are infected with the virus and quarantining vulnerable groups and people potentially exposed to the virus.

Mr. Roy said in an interview that the plan was motivated in part by research suggesting that prolonged school closures disproportionately hurt nonwhite and low-income children, who are less likely to have access to educational materials at home that allow them to keep up with more affluent peers.

“The last thing we need at a time of rising inequality is to widen that inequality for our children,” Mr. Roy said. “Upper-income parents are the ones most able to improve educational opportunities for their children. Lower-income parents are not.”

But many economists warn that hasty moves to restart the economy will simply increase the risks for vulnerable workers without generating significant growth. There is widespread concern that consumers will not travel and spend as freely as they had before the pandemic until therapeutic treatments or a vaccine are developed or testing has ramped up to a degree that gives people confidence that they can resume normal activities without risking infection and death.

“If restrictions on social distancing are lifted without adequate supports — testing, tracking and protective gear — in place, many people will choose to stay home if their circumstances will allow them to,” said Heather Boushey, the president of the Washington Center for Equitable Growth, a liberal think tank focused on inequality. “In other words, we will see small-business, low-wage and hourly workers who are most desperate to get back to work as the first to go back, putting themselves and their families in danger.”

Workers who have no choice but to report for duty say they are already confronting those choices every day. Ms. Watson, the Wendy’s worker, said she feared potentially bringing the virus home to her 11-year-old son, Xzaibayan.

Kim Thomas, a home health aide in the Myrtle Beach, S.C., area, has begun delivering groceries for an online service to make up for hours she lost because of the outbreak.

In the grocery stores where she shops, Ms. Thomas said in a phone interview, “not everyone is practicing safe distancing. They’re not.”

She said she was concerned for her livelihood in an area that depended heavily on tourism to keep its economy running. But she also feared for her health.

“I’m definitely worried about catching Covid-19,” Ms. Thomas said. “I worry about it every day.”

Ben Casselman contributed reporting.

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Coronavirus Crisis Underlines Weak Spots in U.S. Economic System

An indelible image from the Great Depression features a well-dressed family seated with their dog in a comfy car, smiling down from an oversize billboard on weary souls standing in line at a relief agency. “World’s highest standard of living,” the billboard boasts, followed by a tagline: “There’s no way like the American Way.”

The economic shutdown caused by the coronavirus pandemic has suddenly hurled the country back to that dislocating moment captured in 1937 by the photographer Margaret Bourke-White. In the updated 2020 version, lines of cars stretch for miles to pick up groceries from a food pantry; jobless workers spend days trying to file for unemployment benefits; renters and homeowners plead with landlords and mortgage bankers for extensions; and outside hospitals, ill patients line up overnight to wait for virus testing.

In an economy that has been hailed for its record-shattering successes, the most basic necessities — food, shelter and medical care — are all suddenly at risk.

The latest crisis has played out in sobering economic data and bleak headlines — most recently on Thursday, when the Labor Department said 5.2 million workers filed last week for unemployment benefits.

That brought the four-week total to 22 million, roughly the net number of jobs created in a nine-and-a-half-year stretch that ended with the pandemic’s arrival.

Certainly, the outbreak and attempts to curb it have created new hardships. But perhaps more significantly, the crisis has revealed profound, longstanding vulnerabilities in the economic system.

“We built an economy with no shock absorbers,” said Joseph Stiglitz, a Nobel-winning economist. “We made a system that looked like it was maximizing profits but had higher risks and lower resiliency.”

Well before the coronavirus established a foothold, the American economy had been playing out on a split screen.

On one were impressive achievements: the lowest jobless rate in half a century, a soaring stock market and the longest expansion on record.

On the other, a very different story of stinging economic weaknesses unfolded. Years of limp wage growth left workers struggling to afford essentials. Irregular work schedules caused weekly paychecks to surge and dip unpredictably. Job-based benefits were threadbare or nonexistent. In this economy, four of 10 adults don’t have the resources on hand to cover an unplanned $400 expense.

Even middle-class Americans, once snugly secure, have become increasingly anxious in recent decades about their own fragile finances and their children’s prospects.

Since the recession’s end, the economy has pumped out enormous wealth. Workers, though, have gotten a smaller slice of those rewards. Companies prioritized short-term gains and stockholder returns at the same time that employee bargaining power was eroding.

In less than two decades, the share of income paid out in wages and benefits in the private sector shrank by 5.4 percentage points, a McKinsey Global Institute study found last year, reducing compensation on average by $3,000 a year, adjusted for inflation.

The result is that a job — once the guarantor of income security — no longer reliably plays that role.

“For many working families, wage growth has not been strong enough to allow them to meet their basic needs on their own,” the Federal Reserve Bank of Boston concluded in a report last year.

Work is available — but it is often unsteady and poorly paid.

Roughly seven of 10 people enrolled in public health care in New England were employed, the bank study found. So were nearly half of those who qualified for temporary cash assistance from the government.

Employers who pay low wages and don’t offer benefits have in effect been subsidized through programs providing publicly funded medical insurance, rent money and food stamps to their workers.

Now individual employees with few resources — rather than companies or partners — are compelled to absorb some of the routine risks and uncertainties of running a business. Scheduling software that constantly changes a worker’s daily shifts to match an unexpected slowdown or rush improves a business’s bottom line but can ruin a household’s by causing wages to fluctuate widely from one week to the next. Such shifting not only scrambles family life, but also makes it more difficult to schedule other paid work.

At large companies, employees have seen their spending on health care — because of higher deductibles, premiums and co-payments — increase twice as fast as their wages over the past decade, according to the Peterson-Kaiser Health System Tracker.

At the same time, the cost of other necessities like housing has shot up. Millions of renters spend more than half their incomes on housing. Middle-income households, too, have been hit by escalating housing costs. Since 2000, a steadily growing share of this group has spent more than a third of earnings on rent.

For years, households have strained to navigate this cut-to-the bone economy with varying success. The coronavirus shock has made the economic precariousness — usually seen in scattershot fashion — evident everywhere at once.

“A lot of the people in the economy are living at the edge, and you have an event like this that pushes them over,” Mr. Stiglitz said. “And we are unique in the advanced world in having people at the edge without a safety net below them.”

Powerful forces like advancing technology and globalization are partly to blame for workers’ economic instability. But Mr. Stiglitz also criticized the short-term mind-set prevalent in corporate America. Airlines — now being propped up with emergency government aid — used billions of dollars in profits to buy back their stock, he said, instead of investing in employees and productive capacity or building up reserves to withstand a downturn.

In 2018 alone, companies in the S&P 500 — flush from windfalls resulting from steep cuts in corporate taxes — spent $806 billion repurchasing their own shares at boom-time prices in search of quick profits.

When the outbreak began to shutter the economy, many of these companies laid off millions of workers, ending their health insurance.

“Employer-based health insurance is a wrecking ball,” the Princeton University economists Anne Case and Angus Deaton wrote this week in The New York Times. The couple, the authors of “Deaths of Despair and the Future of Capitalism,” argue that over time this system has “destroyed the labor market for less educated workers.”

The patched social service network that runs through individual states is now struggling to handle the millions of unemployment claims that have poured in as well as a flood of new applicants trying to tap existing programs. But assistance doesn’t necessarily arrive quickly. In Louisiana, for example, the backlog of applications for food stamps filed since businesses were closed in mid-March already exceeds 87,000.

In the meantime, nongovernmental organizations are trying to meet the demand. Fulfill, a food bank that operates in Monmouth and Ocean Counties in New Jersey, has served an additional 364,000 meals in the last three weeks, a 40 percent spike.

“We went from 0 to 60 in five seconds,” said Kim Guadagno, Fulfill’s chief executive and president. Hurricane Sandy in 2012 was devastating, she said, but this is worse because “the need is widespread, with no end in sight.”

Last year, before the pandemic, Feeding America, the nation’s largest network of food banks, fed 40 million individuals, many of them children, said Claire Babineaux-Fontenot, the chief executive. “It does underscore the fact that so many people in our country live on a precipice,” she said.

Housing also feels less secure. A recent survey by SurveyMonkey and Apartment List, an online rental marketplace based in San Francisco, showed that a quarter of renters paid only part or none of their rent this month.

“These numbers are extremely worrying,” said Igor Popov, the chief economist at Apartment List. “In a typical economic downturn, when incomes take a hit, many families can downsize or move in together to minimize their rent payments. At a time when we’re sheltering in place, even moves to downgrade housing are difficult.”

Those who have been squeezed the most can expect to be squeezed even more.

Before the coronavirus outbreak, Destination: Home, a Silicon Valley nonprofit that works to prevent homelessness, was on track to give $7 million in financial assistance to about 1,000 families. In March, the organization raised an additional $11 million for coronavirus relief, but was overwhelmed with demand — 4,500 requests in three days — and stopped accepting applications. The waiting list has close to 10,000 people and is growing each day.

“I thought there was nothing that I haven’t been involved in when it comes to homelessness, said Jennifer Loving, chief executive of Destination: Home, “but this is incomprehensibly catastrophic.”

In a report on the economic impact of the coronavirus, the Federal Reserve Bank of Richmond warns that the largest burdens will fall on people who are already the most vulnerable — people in low-paying, insecure jobs.

That is also a group with an outsize share of minorities and immigrants.

As a McKinsey report released this week noted, the “unfolding public-health and economic disaster” resulting from the pandemic “will disproportionately impact black Americans.”

It is another echo of Bourke-White’s “American Way” photo, where the contented family in the car is white and the grim faces waiting for aid are black and brown.

Conor Dougherty and Nelson D. Schwartz contributed reporting.

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