The Disparate Impact of the Downturn

While it is a deeply-held American belief that we’re all in this together, there has long been a truism that when the economy gets a cold, the poor get pneumonia. It’s a glib way of noting that any downturn in the economy has a disparate impact on those least prepared to handle it.

On February 20, 2010, the New York Times published an article on the “new poor,” millions of Americans struggling with long-term unemployment. As the Times notes, changes in the economy have stripped away some of the jobs that traditionally offered a path to the middle class for those with less education. “Some labor experts say the basic functioning of the American economy has changed in ways that make jobs scarce.” … “Factory work and even white-collar jobs have moved in recent years to low-cost countries in Asia and Latin America. Automation has helped manufacturing cut 5.6 million jobs since 2000 — the sort of jobs that once provided lower-skilled workers with middle-class paychecks.”

These stark facts support the argument that our economic recovery must be carefully crafted to ensure an equitable recovery for all. Although American social safety nets over the past two decades have been designed with an eye toward self-sufficiency, it’s clear that underlying principle doesn’t apply in current economic circumstances. The Times article quotes Timothy M. Smeeding, the director of the Institute for Research on Poverty at the University of Wisconsin, Madison, “We have a work-based safety net without any work.”

Mr. Smeeding notes that the expected recovery is not anticipated to be quite as robust for some sectors of American society. “People with more education and skills will probably figure something out once the economy picks up. It’s the ones with less education and skills: that’s the new poor.” However, rather than accept a lessening of opportunity for those who have already experienced disadvantages, we must craft a recovery that, indeed, lifts all boats with the rising tide.

Read more at The Opportunity Agenda website.

Tags: Opportunity, economic justice, equal opportunity, equality, jobs (all tags)

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