Tracking the pandemic's unequal impact
The pandemic was bound to hit the most economically vulnerable among us the hardest. New polling data from Morning Consult, out this morning, shows the degree to which those difficulties were more concentrated among people of color.
Catch up quick: The Morning Consult/Axios Inequality Index has tracked the economic experience of adults in three wage groups since May 2020. We began publishing the findings in May of this year, and six months in, we’re slicing the data a little differently — and looking at inequality between ethnicities.
Why it matters: This look-back illuminates the unequal effects of the pandemic on the American population — as well as how important the government's policy responses have been in blunting the impact.
How it works: The index measures whether economic inequality is rising or declining — as opposed to providing a snapshot of the distribution of income or wealth. A higher reading means more inequality.
- It does so by tracking sentiment in four categories: whether or not respondents expect to experience a reduction in income, or a job loss, whether they can cover basic expenses for a month with their savings, and overall consumer confidence.
Details: Inequality increased the most over the course of the fall and winter of 2020 when COVID cases were rising and government support was winding down.
- The index shows inequality contracted over the first half of this year when vaccinations were on the rise, expanded unemployment benefits were extended, and another round of stimulus checks hit bank accounts.
- But since July, as the Delta variant began spreading and large swaths of government support wound down, inequality has started to creep back up again.
“As captured by the index, minority groups are generally more likely than white adults to experience pay losses, harbor fears of pay losses and lack savings to cover basic expenses,” Morning Consult economic analyst Jesse Wheeler tells Axios.
- For example, 17% of Black and 24% of Hispanic Americans on average over the last 12 months feared a loss of income, compared to 15% of white adults.
The big picture: This is consistent with what the government jobs data shows — that Black and Hispanic unemployment remains higher than unemployment for white Americans — with implications for how quickly the Federal Reserve moves to tighten monetary policy.
- The Fed’s view of full employment — something it would like to see before raising interest rates — specifically targets an inclusive recovery.
What we're watching: Assuming that pandemic-era direct fiscal stimulus payments are over, “my default assumption would be that inequality in this index are going to increase over time,” John Leer, Morning Consult chief economist, tells Axios.
Go deeper: Coronavirus has inflamed global inequality