As the US approaches the brink of an unprecedented recession caused by the novel coronavirus and an ongoing oil price war, blue collar workers and those in the service industry are struggling especially hard. Fully 18% of working Americans have now been laid off or had their hours significantly cut as a result of the coronavirus. Millions of people in the United States are at risk of losing their jobs and wondering how they will pay rent — not to mention the millions more around the world who will be directly impacted by a major economic recession in America.
Coronavirus Class Warfare
Coronavirus is exposing many fault-lines in American society that have already been flaring up in recent years. Private healthcare that favors those with more money or high-paying careers versus those relying on Medicaid or no coverage; those working for minimum wage in grocery stores and those for whom spending $8,000 for deluxe cuisine and hors d’ouevres for coronavirus hot tub parties is no big deal. Wealth inequality in the United States has reached levels that are hard to fathom and coronavirus is intensifying and revealing the very real and very large gap between rich and poor for everyone to see: and it’s not a pretty sight.
America’s wealth gap is absolutely massive. Already by 2018 America’s wealthiest 10% had 70% of all the country’s household wealth — a staggering 60% rise from 1989. Income inequality in the US is the highest out of any G7 nation according to the Organization for Economic Cooperation and Development (OECD). Huey Long must be turning over in his grave, to say the least.
‘We Should Blow Up the Bridges’
In one potent example, local residents of the Hamptons where many Manhattanites own summer properties have reported being shocked and disgusted by wealthy urbanites who have swooped in to clear grocery shelves, frequented public places with no precautions despite having coronavirus symptoms and generally indicated their complete disdain for the local working class who keeps the holiday haven up and running.
In one particularly compelling anecdote, a local nurse reported that a rich woman from Manhattan called her small hospital in the Hamptons and said she had coronavirus. Doctors told her to stay put but the woman ignored the order to stay in the city and subsequently showed up at the hospital demanding to be let in; another Manhattanite coronavirus carrier took a private jet to East Hampton without notifying anyone. As the article details, local residents are not overly thrilled at the vain virus-carrying VIPs coming in, with Montauk resident James Katsipis decrying the “waves of people bringing this s–t in” and saying “we should blow up the bridges” and “not let them in.”
While class war certainly is not the solution to the coronavirus — if anything more solidarity is needed — the above example shows just how raw tensions have become in cases where the wealthy insist on flaunting the advantages they have always taken for granted.
An Economic Punch in the Gut
America’s working class hasn’t had an easy ride, especially in the past several decades as technological change and outsourcing has accelerated job loss. Now coronavirus is making things even worse — much worse, in fact. As Eric Morath and Rachel Feintzeig reported for the Wall Street Journal, many low-wage American workers in industries that require close personal contact like cafes, restaurants, malls, the hospitality industry, security guards, public events jobs and employment across the service industry are being laid off or having their hours massively cut down. Around one quarter of America’s active workforce is considered “vulnerable,” meaning that they are in unstable and perform low-paid work. From taxi drivers to baristas and hotel receptionists, the lack of white collar workers traveling around and availing their services is an economic punch in the gut.
Recent recoveries that had been helping out economically downtrodden demographics of the US economy with the lowest unemployment in fifty years are now right back down where they started. Service and hospitality work has grown around 30 percent since the comeback from the 2008 recession, but much of that work was still only a start, leaving many still one or two paychecks away from financial ruin and complete poverty. And now? The majority of those working for an hourly wage have no access to sick leave and minimal cushion for a financial disaster. It is also worth noting that of the millions who filed for unemployment this week, millions more are not technically unemployed but have left the rosters where they are counted or are still technically “working” but with very minimal shifts per week. The economic crisis that is likely coming is a daunting iceberg that will be very hard to bypass without disaster.
The Populist Left and the Populist Right
The populist left headed by Senator Bernie Sanders and the populist right represented by President Donald Trump both signify different forms of revolt against politics — and business — as usual. Even if Trump’s first term has thus far mainly been defined by tax cuts to the rich and massive weapons deals to Saudi Arabia his recent decision to invoke the Defense Production Act and send checks to struggling American families shows the kind of nationalist and populist tendencies that got him elected.
The current crisis also highlights the popularity of the President’s initially tough stance on China. As Senator Josh Hawley of Missouri said March 19 on Tucker Carlson Tonight, the coronavirus is a strong reminder that the political class should reassess America’s dependence on China economically. According to Hawley, today’s situation demonstrates the very real danger of selling out the United States to China and having an overly close trade relationship with them. The de-industrialization of the United States in favor of outsourcing those jobs to China also means that many remaining low-paid jobs are in the service sector: exactly what is being hit hardest in the current crisis as mentioned above.
While it is clear that sending checks to everyone, boosting food stamp amounts and Medicaid funding, increasing unemployment insurance, suspending foreclosures and getting corporations to help out in the virus response is not going to pull the US economy back from the brink, it is still a step in the right direction, as even Trump opponent and frequent target of Trump’s verbal abuse Congresswoman Ilhan Omar agreed. This crisis could also see the American left and right begin to reach a greater consensus on healthcare and workers rights: after all, the suffering and solidarity of the London Blitz is what led to post-war Britain adopting universal healthcare. At this point there is unlikely to be any sudden economic miracle unless very clear and time-specific answers on coronavirus start coming out, however, and so far that is nowhere to be seen.
Nonetheless, the truth is that the horror and chaos of the coronavirus has proven the instincts — if not the specific and varying policy proposals — of the populist left and populist right to be largely correct:
A nation which does not look out for the majority of its citizens’ interests and which puts profits and international trade deals above people is weak and unprepared for hard times.