The U.S. Has 2 Economies: How Much Longer Will The Losing Side Stand For That? Wash Post
'The U.S. has two economies. How much longer will the losing side stand for that?' Opinion by Catherine Rampell, The Washington Post, Aug. 20, 2020. - Excerpts, Ed.:
There are two American economies right now: a buoyant recovery resting atop a possible depression.
There’s the economy of higher-income, mostly college-educated white-collar workers: people who can still work from home (as I can), who can order delivery for nearly every need or desire, and whose finances have been barely dented by the recession, if at all. For these households, the recession is largely over. In fact, by late June, high-wage employment had already fully recovered all the ground lost since the pandemic began, as my colleague Heather Long recently pointed out, citing data from Brown University economics professor and Opportunity Insights co-director John Friedman.
Then there’s the other economy.
That’s the economy of lower-wage, predominantly non-college-degreed, blue- (or pink-) collar workers. These are people once employed in restaurants, bars, hotels, salons, gyms and retail stores, who generally must show up in person, but whose customers are now afraid to do so. Their employers have been knocked out of business, many permanently. Only about half of jobs in the lowest-paying quartile that were lost in the spring had been recovered as of late June, according to Friedman’s calculations. Using more limited data available so far, Friedman projects that more than a third of these jobs were still “missing” as of mid-August. (SEE Graph).
In that first economy, U.S. home-builder confidence just matched its highest level ever, as ultralow interest rates encourage Americans who are still employed to trade up to newer and more spacious houses. In that second economy, home mortgage delinquencies just hit their highest rate since the housing bubble burst a decade ago. Delinquencies for FHA-backed loans- commonly used by lower-income & first-time home buyers- reached their highest level since at least 1979. There’s the segment of the economy where retirement accounts are flush. Stock markets recently hit record highs, thanks to loose monetary policy, optimism about a future covid-19 vaccine..Then there’s the large segment of the economy that owns no stocks, has little to nothing saved for retirement & isn’t sharing in this wealth creation.
How much longer 2 economies can continue diverging, before the depressed economy begins to weigh down the buoyant one- esp. with recent expiration of the federal $600 weekly jobless benefit, a lifeline that had enabled those in the “bad” economy to continue spending (food, keeping a roof) as if they were “good” economy members. States & cities are in fiscal crisis, another wave of public-sector layoffs would probably slash not only white-collar govt. jobs, but also critical services that higher-wage private sector workers rely on.. Overall unemployment remains higher than it ever was during the Great Recession. New jobless claims tick upward. Layoffs once hopefully “temporary” are being officially recategorized as “permanent.” With lockdown orders partly lifted but infections not yet contained, the virus is still in charge- & still disproportionately inflicting pain upon the bodies & the finances of the working class...
More,
https://www.washingtonpost.com/opinions/2020/08/20/us-has-two-economies-how-much-longer-will-losing-side-stand-that/
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Read More: 'Rise of the Suburbs, July Homes Sales Shoot to 14 Yr High: US Cities Seeing Their Fortunes Change'
https://democraticunderground.com/1016266623
Read More:' Mortgage Delinquencies of At least 90 Days Rise To Highest Level In 10 Years'
https://democraticunderground.com/10142566518
- Aug. 15, 2020. People line up to buy homes at a development in Ontario, California.
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A lot of college educated folks working in the lower paying jobs, too.
Everything now is a gig, not a job with benefits, it seems.
