Next week’s primary in a key battleground state, held in the middle of a pandemic, can’t help but shine a light on an issue that has made this health crisis so hard to contain: the state’s high levels of racial and economic inequality.
The pandemic has had a greater impact on groups disadvantaged by income disparity. Communities of color, the working class and the working poor have all been disproportionately impacted by COVID-19.
A May 29 report released by the Pennsylvania Department of Health revealed that African-Americans, who make up 12% of the state’s residents, accounted for 20% of COVID-19 deaths.
In Philadelphia, which has the state’s highest concentration of COVID-19 cases, African Americans make up 41% of the population but, as of May 29, account for 47% of cases where racial data is known. By contrast, whites account for 35% of the city’s population but only 16.2% of COVID-19 cases.
Low-income workers have been hardest hit by layoffs caused by the shutdown. In April, Philadelphia’s leisure and hospitality industry, which employed nearly one-tenth of the city’s workers, lost 55% of its workforce. The industry’s two subsectors – arts, entertainment and recreation, and accommodation and food services – are two of the three lowest paying in the city, with workers’ median wages falling below $22,000 a year, according to a report by The Pew Charitable Trusts.
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Before COVID-19 devastated the economy, Pennsylvania had enjoyed just over a decade of continuous economic growth. The state’s progress mirrored the nation’s following the Great Recession.
But much of that growth has gone straight to the top 5% of income earners. A stagnant minimum wage has kept Pennsylvania’s working and middle classes financially insecure. The pandemic has only aggravated that disparity.
- Between 2009 and 2018, the top 5% of households saw their incomes grow 12.6% while the bottom 20 percent – those who averaged $13,453 a year – saw their incomes decline by 1.7 percent, according to an analysis of U.S. Census data by the Economic Policy Institute.
- The top 5% earned, on average, 28 times more than the bottom fifth of households, a disparity that does not account for the even greater gaps in household wealth.
- The Keystone State has retained the same $7.25 minimum wage since 2009, part of the reason its low-income workers can’t get a leg up.
“Lower-wage Pennsylvania workers are already at a disadvantage. They tend to be paid a bit less than in the surrounding states and their wages have gone up less,” said Stephen Herzenberg, executive director of the Keystone Research Center.
Between 2013 and 2017, the bottom 10 percent of wage earners in the six states surrounding Pennsylvania and the District of Columbia saw their pay rise by an average of $1.02 an hour. The gains came out to an extra $2,014 a year for a full-time worker, the Keystone Research Center found. In the same period, the lowest-paid workers in Pennsylvania saw wages increase by just 33 cents per hour. Had Pennsylvanians benefitted from the same gains as neighboring states, workers would’ve brought home an extra $1,435 a year.
Workers didn’t experience wage growth across the board until 2018, when earners from the bottom to the top of the wage distribution saw a 3.1% wage increase on average, the first such broadly shared gain since 2001.
The state’s 4.1% unemployment rate from September 2018 to April 2019 – a low not reached since 2000 – is largely responsible for the increase. With fewer employees looking for work, employers had a smaller supply to draw on, giving workers the leverage to demand better pay.
“The only time you get broadly shared prosperity is towards the end of a very long expansion,” said Herzenberg. “One or two years out of 10, If you’re really lucky, workers get to share in the benefits of economic growth, but that eight or nine years they don’t.”
Layoffs from the COVID-19 lockdown have turned that supply-demand dynamic on its head. The economy will reopen with a deluge of workers looking for jobs, many of whom will be hard-pressed to hold onto 2019 raises.
“The COVID crash is going to undo – probably a good deal more than undo – the economic progress workers have made in the last couple of years,” said Herzenberg.
Philadelphia’s low-income workers are in perhaps the worst position of any in Pennsylvania. The Philadelphia Metropolitan Area suffered the highest rate of income inequality in the state pre-COVID-19.
- Montgomery County, which sits directly north of Philadelphia, is the most unequal. Top earners took in 31.2 times more than the rest of the county’s workers in 2015. In the same year, Philadelphia and surrounding counties Chester, Delaware and Bucks ranked within the top nine.
- In 2018, a Bloomberg analysis ranked Philadelphia the third most unequal city in the country, after it jumped 17 spaces in a year, the biggest move among the top 10 worst cities.
African-Americans in Philadelphia feel the brunt of that disparity.
- The majority of workers earning the minimum wage are nonwhite; 45% are black.
- Black Philadelphians are twice as likely than whites to be working poor, a 2016 Philadelphia Works study found.
- In 2018 the unemployment rate for black Philadelphians was 13.8%, while the rate for white city residents was 3.8%, the U.S. Census American Community Survey found.
A decade of economic growth wasn’t enough to help the city’s low-income workers. In 2017, 25.7% of the city lived below the poverty line, compared with 23.8% in 2007, before the start of the Great Recession.
The city’s low-wage workers, many of whom are concentrated in the service industry, also struggle to get enough hours. Only 17% work full-time, [Carmel inserted comma] and nearly three-fourths of part-time workers say they’d need full-time hours to “make ends meet.”
In response to COVID-19, Pennsylvania pushed its primary back to June 2, a move initially hailed as helping create a second Super Tuesday after 11 other states rescheduled for the same date. That changed after Sen. Bernie Sanders suspended his campaign in early April, ending the contested election for the Democratic presidential nomination. Pennsylvania’s single statewide contested slot is the Democratic nomination for state auditor general.
So far, Democrats have dominated requests for mail-in ballots, accounting for nearly 70% of the 1,178,475 applications, Reuters reported last week.
Though Pennsylvania is slowly reopening, with plans to lift the stay-at-home order in Philadelphia and the surrounding counties by June 5, it’s likely mail-in votes will still play a role in the November election, especially if social distancing orders or a second wave of cases restrict in-person voting.
Photo: The George Washington Monument in Philadelphia, PA. Photo by Hisham Ibrahim.
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