The Stuff Revolutions Are Made Of

It was the most mediocre of times, it was the worst time since the last worst time. It was a time where sun could be seen through gathered clouds, it was a time of unyielding gale and torrential downpour. It was a time of generational wealth accumulation able to be seen in a microcosm, it was a time of systemic marginalization exacerbated by societal inequities able to be seen in the same span of months. It was a time of luck, it was a time of great misfortune. It was a time of great economic inequality, it became a time of great medical inequality.

With apologies to both Charles Dickens and you, Dear Reader, for suffering through yet another hackneyed appropriation of the introduction to A Tale of Two Cities, we are living through a story of two Americas: one affected by the coronavirus and its economic devastation, one not.

We have heard about the wealth gap in America: Those who have means to do as they see fit and those who have more boiling pots than they have lids. But what we are seeing now within months is what previously was only visible with rigorous study over the course of years and generations — the widening chasm between those who are “able” in so many facets of that word, and those who are not. And that speaks not simply to wealth and the generational transfer of it, but within the examination of 2020 alone, it is more accurately described as a survivability gap.

You see, for those who didn’t lose their incomes since March, and who didn’t have to wade into public often to expose themselves to a pernicious virus, this year has been among the best of times — an economic phenomenon. Sure, their children were home for the springtime and millions of students lost a joyous few months of their final year of either high school or college. And woe be unto the new graduate who must make his or her way in an economy that has as much wind in its sails as an asthmatic blowing through a straw. But stocks have largely rebounded, and the investor class couldn’t be more thrilled with what the Federal Reserve has done to prop up the markets. Those Fed moves have benefitted homeowners in a way as well — while interest rates are the lowest they’ve ever been, those with sterling credit have been able to refinance mortgages, pay less, and improve their incomes by having less outgo. The National Association of Realtors reports sales of existing homes were up almost 21% last month, and the Mortgage Bankers Association shared that mortgage applications were up 4% in just a week.

Meanwhile, a vast swath of America has lost incomes, homes, and life. When the virus came to town, states interpreted its importance differently — some shut down early, some reopened early, and some did both only to have the economic rekindling backfire. Through those four months of machinations, we learned “essential” employees really mean “expendable” employees — they have the greatest burdens but the fewest protections. The United States has 26% of the 16M confirmed coronavirus cases worldwide and nearly 23% of its deaths. We have an economy that went from 60 miles per hour to zero, lurched forward, and then sputtered. For the week ending July 18th, there were 1,416,000 first time unemployment claims, the 18th week in a row of more than a million people seeking protection from the loss of income. Of a concerning note, it was the second week in a row where first time unemployment claims increased.

This is among the worst of times for many, as we endure the worst levels of unemployment since World War II. One tenth of the American population claims unemployment benefits. When you adjust the denominator from total population to working age population, that unemployment claim rate goes to 14.5%. The weekend of July 25 and 26 was the last weekend where the federal increase in unemployment insurance — an extra $600 per week — was disbursed based on the CARES Act. Without extended federal benefits, the unemployed then receive only state benefits, which vary widely. And, protections for gig workers, freelancers, contractors, self-employed, those who can’t go to work because school is closed or because someone in their house is sick, and others who typically wouldn’t qualify for unemployment but enjoyed the expanded federal benefit in the form of Pandemic Unemployment Assistance — now won’t be able to claim unemployment anymore either. For millions, it’s been the difference between paying rent and eating — or not.

This breeds the potential for a homelessness crisis, as those same millions of people will have August rent due in the next week or two. According to the Census Bureau, 43.4M people either missed last month’s rent or mortgage payment, or have no confidence they’ll be able to pay next month’s rent. Eviction moratoriums are expiring federally and at municipal levels. People are starting to have to move out of housing due to unemployment and during a pandemic. Some are packing and moving boxes while fighting Covid-19 itself.

It is a poverty that in the richest country in the world, the extra UI goes away at the same time the federal moratorium on evictions expires. Eligibility for rent relief varies by municipality and state, but the extra $600 per week is the only reason many have been able to keep up with rent.

Losing the federal unemployment supplement will pull $25B per week out of the economy. That’s money people spend right away on essentials, such as housing, food, and transportation. There is an argument among some in Congress that the Federal Pandemic Unemployment Compensation (FPUC) of $600 per week amount is too generous and keeps people from looking for a new job. For those who lack empathy and may not understand, this is not exactly a climate in which getting a new job is easy — or safe.

Millions of people are still out of a job, some for the second time this year. Restaurants, gyms and other companies are closing shop once again — perhaps for good. Municipal government officials say they are bracing for a crippling blow, with the latest shutdown expected to cleave further into their still-souring finances.

Meanwhile, the US Senate puts on a broad display of its lack of urgency to serve its people. One of the ideas floated for the next stimulus is to suspend the payroll tax. Getting rid of the payroll tax, which funds social security, Medicare, and other social benefits, comes out of one’s paycheck. Since one must earn a paycheck in order to notice the tax cut, removing the payroll tax amounts to being only a stimulus for those who have a job — not the best solution for a country with 32.5M unemployed. And, if put into effect, yet another way those employed sail farther from the storm than those dealing with the tumult in it.

With a virus that has no vaccine and only behavioral measures to prevent its spread, an economy in the doldrums with half of Congress unwilling to act, and palatable racial disparities set amid systemic marginalization and racism fomenting civil unrest — all while billionaires send well-wishes from 400-foot yachts and moms link arms to stand between federal paramilitary personnel launching tear gas at protestors of police brutality — we are at the precipice of a societal revolution not seen since the Civil Rights Era. With behavioral measures adhered to haphazardly, a government tone-deaf to the financial pleading of the unfortunate, and injustices continuing unabated, the conditions are ripe for untenable medical, economic, and societal plight. Those in authority may find themselves impotent against forces too great for reversal and too late to stop — the exact conditions revolutions are made of.