What do you think? Leave a respectful comment.

The economics behind racial coronavirus disparities

African Americans face immense disparities across a broad range of categories, including economic. That history of disadvantage is making the current problems of COVID-19 even worse. Economics correspondent Paul Solman reports.

Read the Full Transcript

  • Amna Nawaz:

    Now we continue our Race Matters coverage about inequality, racial justice and specific challenges for black Americans, the first, a story on major economic gaps in wealth and income, the second on Hollywood's need for better representation on and off the screen.

    Economics correspondent Paul Solman starts with a report on the historic disparities African-Americans face, and how that history is making the current problems of COVID even worse.

    It's part of his regular reporting for our series Making Sense.

  • Lydia Chamton:

    When the rest of the country catches a cold, a place like the Black Belt catches the flu.

  • Paul Solman:

    Or, these days, something worse.

  • Woman:

    COVID hit us hard.

  • Paul Solman:

    The pandemic has delivered a knockout blow to black Americans physically. They're dying at twice or more the rate of whites.

  • Man:

    Good afternoon.

  • Paul Solman:

    But they are also hit much harder economically. Why?

  • Lisa Cook:

    African-Americans are concentrated in the areas of the economy that have been hardest hit by COVID-19.

  • Paul Solman:

    Economics Professor Lisa Cook.

  • Lisa Cook:

    Let's just look at unemployment statistics. There's 14 percent unemployment rate among black women, 16.3 percent among black men.

  • Paul Solman:

    Compared to 10.1 percent for whites. Now, it so happens a black-white unemployment gap, widening when times are bad, is, sadly, par for the course, in the Great Depression, in the Great Recession, as economist William Rogers told me in 2009.

  • William Rogers:

    When we entered the recession, African-Americans started with a higher unemployment rate. And, as we have gone through these last 16 months, the gap has widened.

  • Paul Solman:

    Pre-pandemic, black unemployment had hit a record low of 5.8 percent, a fact President Trump often touted.

  • President Donald Trump:

    We have the best numbers we have ever had.

  • Paul Solman:

    But Cook says black workers, stuck in low-wage service jobs, embody the old adage last hired, first fired.

  • Lisa Cook:

    The last hired means that there is not the ability to accumulate income. That makes African-Americans less able to weather such a storm.

  • Paul Solman:

    In Alabama's so-called Black Belt, the jobless rate is at 20 percent.

    Lydia Chatmon of the Selma Center for Nonviolence.

  • Lydia Chatmon:

    So, where other people are able to still survive, work from home, we don't have a whole lot of businesses and industries that allow for that. So, the financial impact has been great.

  • David Leohhardt:

    The black-white wage gap among men is as large as it was in 1950.

  • Paul Solman:

    That's New York Times writer David Leonhardt.

  • David Leohhardt:

    We see that black men make only 51 cents on the dollar, relative to white men.

  • Paul Solman:

    Therefore, says economist Trevon Logan:

  • Trevon Logan:

    Much less of a cushion to cushion the blow. Much more likely, then, of course, to need to be employed in the places where they are essential workers.

  • Lisa Cook:

    So, yes, there would be desperation with respect to trying to find another job.

  • Derrick Palmer:

    You guys need to provide us with masks. You need to provide us with gloves.

  • Paul Solman:

    Starting in March, Amazon warehouse workers, disproportionately people of color, staged protests around the country over what they said were unsafe working conditions.

  • Gerald Bryson:

    They was talking about, we're going by CDC standards. But when we call the CDC, they are not.

  • Paul Solman:

    Amazon fired several of the activists, though the company has since rolled out safety measures. But good protection still isn't available to many of America's essential workers.

  • Jason Hargrove:

    This coronavirus (EXPLETIVE DELETED) is for real. And we out here as public workers doing our job trying to make an honest living to take care of our families.

  • Paul Solman:

    Detroit bus driver Jason Hargrove on March 21, in a Facebook video complaining about a passenger.

  • Jason Hargrove:

    That woman that was on this bus that stood up behind the line, where they are not supposed to be, and coughed four or five times, and didn't cover up her mouth.

  • Paul Solman:

    Eleven days later, Hargrove, a 50-year-old father of six, died of COVID-19.

    African-Americans like Hargrove make up only 13 percent or so of the U.S. population, but nearly double that percentage of transportation, warehouse and delivery workers.

    Just imagine what happens to a family's finances when that worker is incapacitated, or worse. And the problem is, African-American finances have been deteriorating for years, says economist Logan.

  • Trevon Logan:

    Wealth actually has receded for African-Americans since the last Great Recession. And, in fact, the wealth disparities are larger than they were 20 years ago.

  • David Leonhardt :

    The typical white family has a net worth 41 times the typical black family, which is just remarkable.

  • Paul Solman:

    And, adds David Leonhardt, to a large extent, the wealth gap is a function of policy.

  • David Leonhardt:

    The U.S. government in the decades after World War II subsidized families to buy houses, which is a key way that people build wealth.

    But the way the policy was written, they essentially said, to get these low-interest loans, you have to live in a predominantly white neighborhood. The government justified this by saying that white neighborhoods were essentially better housing investments.

  • Trevon Logan:

    And then I looked at the map of Columbus, my home, right in that giant red box.

  • Paul Solman:

    Black neighborhoods were literally redlined on maps for decades, off-limits to the housing investment which builds wealth.

  • Trevon Logan:

    I can show you every city in the United States. It's the same in Indianapolis. It's the same in Cleveland. It's the same in Detroit. It's the same in Philadelphia.

  • Paul Solman:

    And during the crash of 2008, those neighborhoods became hotbeds of sleazy subprime loans and often, as a result, foreclosure, less wealth, and thus less access to capital for buying a home, for building a business.

  • Alphonzo Cross:

    Having operating capital is everything. We are not afforded the same kinds of opportunities, because we're looked at as a risk. And we're looked at as a risk because we don't have access to the capital in order for there not to be a risk.

  • Paul Solman:

    Alphonzo Cross owns Parlor, a craft cocktail lounge in Atlanta. It's in a building his family owns in a less fashionable part of town.

  • Alphonzo Cross:

    As a black business owner, there are still places that you cannot get a lease, no matter what.

  • Paul Solman:

    But they don't say to you, we're not leasing to you because you're black?'

  • Alphonzo Cross:

    Well, this isn't 1952. Of course they're not saying that.

    (LAUGHTER)

  • Paul Solman:

    But being locked out of high-traffic areas means less revenue, even during the good times.

  • Alphonzo Cross:

    Throw a pandemic into the mix, and you now need access to more capital to get through this dumpster fire of a year.

  • Marc Morial:

    African-American businesses come to the pandemic smaller.

  • Paul Solman:

    Marc Morial is president and CEO of the National Urban League.

  • Marc Morial:

    Less of a reserve in cash and money, and, therefore, harder to weather the storm.

    Paul Solman What's so infuriating to African-Americans is that this is a legacy of an intentional past, slavery and Jim Crow, most notably segregation.

  • David Wiliams:

    Segregation is the secret sauce that creates racial inequality in the United States.

  • Paul Solman:

    Harvard sociologist David Williams in a 2017 TED Talk.

  • David Wiliams:

    If you could eliminate statistically residential segregation, you would completely erase black-white differences in income, education and unemployment.

  • Paul Solman:

    And, Williams might have added, perhaps the differences leading to a very different COVID-19 death rate. It's the reasons behind that death rate that we will explore in our next Making Sense report.

Listen to this Segment

The Latest