America is a Tale of Fractured Economic Realities and That’s Stopping Us From Fixing this Crisis

The congressional impasse over more stimulus to a COVID-stricken country continues to deepen. Senate Republicans attempted to pass a small supplementary package and failed, leaving serious doubts as to whether anything will be done before the end of the year. Given how much economic damage the pandemic continues to cause, it seems astonishing that Washington has been unable to muster any action since the spring.

Partisan dysfunctional politics have a huge role here, that is not the only reason. A deeper cause is that we do not all live in the same economy. According to Trump, the United States under his watch has built the strongest economy ever; according to Biden, Trump has abandoned working-class America and cares only about the stock market.

That alone is a tale of two economies, but the picture is far murkier. There is no “the economy.” There are dozens, and nowhere is that more apparent than in the roiling, halting recovery of the job market in the aftermath of the pandemic-and-shutdown induced coma of the spring. The wide disparities make any one story incomplete, and leave millions reacting to any sweeping generalization proffered by experts, politicians or corporate leaders with puzzlement and anger. We like to tell ourselves one story, but the only true story is that there isn’t one economy; there are multitudes.

The most recent jobs report released on September 4 showed that employment continues to climb out of its crevasse, with an additional 1.4 million jobs being added back and the nation unemployment rate falling to 8.4%. For years now, we have used the monthly jobs report as a barometer of “the economy,” and the plunge in employment rolls in March and April was one reason for the swift and aggressive action by Congress and the Federal Reserve to inject trillions of additional dollars into the system to forestall even more collapse. But like all national numbers, the report released monthly by the Bureau of Labor Statistics is a broad snapshot that even in good times can elide massive disparities by region, age, race and gender, not to mention the fact that the report itself makes no differentiation between a job that pays so little that the annual wage is below the poverty level versus one that comes with health insurance, retirement benefits and enough income to support a family.

Now, in the distorted pandemic economy, the variation in how one region is doing versus another is vaster than ever, and helps explain why so many people find that the story being told by one party or the other seem to describe a completely different world than the one they inhabit. Take Kentucky, home state of Senate majority leader Mitch McConnell. Its unemployment rate was 5.9% as of early August. Delaware, home state of Joe Biden? 10.4%. New York, home state of Donald Trump and solidly blue? 15.9% Florida, the ultimate swing state? 11.3%.

There have always been regional variations. Even at the worst of the 2008-2009 recession, for instance, Nebraska’s unemployment rate never went above 5% even as many parts of the country exceeded 10% because agriculture remained strong even as manufacturing and housing collapsed. Before the pandemic hit, however, almost every part of the country was seeing very low unemployment, so that the spread between California and Tennessee was minimal. Since the spring, the way that the pandemic has hit some industries disproportionately has directly impacted how it has affected different parts of the country, which in turn helps explain the notably lack of urgency on the part of the Republicans to accede to major new spending to offset the economic downturn: the parts of the country suffering the most substantial job losses are almost entirely in those parts of the country dominated by the Democratic Party.

In fact, the recent spate of economic numbers simply makes starkly apparent what was already true pre-pandemic: the economies of red state America and blue state are not the same. The economic devastation of the pandemic has hit cities hardest, and especially cities that depend of services and experiences. New York, Las Vegas, Miami have all suffered mightily form the collapse of tourism, the shuttering of entertainment venues such as theaters, casinos and restaurants, and fewer people in offices at work. New York has an unemployment rate of 19.8%; Las Vegas is more than 16%; Miami is 14%. By contrast, Louisville, one of Kentucky biggest urban centers, has an unemployment rate of 6.4%. Louisville was never much of a tourist center, the Muhammad Ali museum and the Louisville Slugger store notwithstanding, nor was its labor force all that well paid compared to formerly thriving metropoli such as New York. When you haven’t ascended too high, you don’t have as far to fall.

In fact, the hardest hit areas of the United States in pandemic land are the ones that were thriving the most pre-pandemic. That then helps explain some of the deep resentment and unwillingness of many parts of the country to lend financial support to those parts of the country hurting the most. Said Rep. John Curtis (R- Utah), “Not only are massive bailouts for cities an unnecessary expense, but they are also a poor policy response that rewards bad behavior and punishes responsibility. Call it a form of red state schadenfreude, a chuckling pleasure that the high and mighty have now been brought low.

The flip side is that the continual challenges in much of the country by race and region have been chronically ignored or insufficiently attended to by those parts of the country that were doing so well until March. COVID-19 is lethal, but so were the wave of tens of thousands opioid deaths in swaths of white-working class parts of the country such as West Virginia and Ohio. Not a few people in those regions felt abandoned to death and decline before the pandemic and seem to have little empathy for parts of the country now asking for economic help.

We do not, as these numbers show, live in one economy. We are a tale of too many economies. There are no one-size fits all solutions, though several trillion dollars more of spending surely will benefit everyone. No part of the country is unaffected by the past months, but some parts are devastated and others merely dented. A sense that we are actually all in this together would dictate that we only thrive when most of us thrive, but that sense was not prevalent enough before this crisis for it to be demonstrable during. Instead, our many economies are making collective stories impossible and added to the sense of fracture that the presidential election and pandemic are magnifying.

A start, of course, would be a greater willingness to look more under the hood, to recognize and accept our differences economically just as we are attempting to recognize them racially. A start would be doing for pandemic harms what we still do for natural disasters: accept that sometimes we spend more on specific areas of the country that are hard hit even when other areas are unscathed. A start would also be to stop with the sweeping generalizations about “the economy” that do none of us much good and arguably do all of us some harm. We may all live in one nation, but we do not all inhabit the same economy.