America’s Debt Problem Will Slow Our Recovery
Even after businesses reopen, a large portion of consumers may not be able to afford to shop
The Covid-19 pandemic is having a disproportionate impact on the health of low-income Americans, but even low-wage workers who avoid the disease itself are likely to suffer grave economic distress. In part, that is because workers with lower incomes have been more likely to lose their jobs than those who are better paid. The Pew Research Center reports that 32% of upper-income adults say that someone in their family has lost a job or taken a pay cut due to the outbreak. That compares with 42% of middle-income households who report lost jobs or pay cuts, and 52% of low-income households.
But pay is only part of the story. To fully understand the disparate economic impact of the pandemic, we need to look also at household wealth, or more exactly, net worth. The margin by which assets exceed household liabilities is crucial to a household’s ability to weather a job loss or a pay cut without catastrophic effects. And household net worth is not only less equally distributed than income — it is also frighteningly fragile for…
