Washington | It was three weeks ago, Miguel Rodriguez had a pleasant life. Server at a restaurant in Maryland for the past 20 years, he had confidence in the future. The u.s. economy is doing well, the customers were at the rendezvous, and its revenues were relatively comfortable.
Everything changed from one day to the next day when his employer was closed on the orders of the authorities, “The Farm” to contain the coronavirus. His wife, a waitress in another restaurant, has also lost his job.
In the United States, the pandemic has thrown instantly in the precarious conditions of millions of people. It will also widen further the social inequalities in striking in the first place the low-income households and the middle class.
“This is a time of extraordinary brought to millions of Americans who were reeling from the financial crisis of 2008,” says Edward Alden, an expert at the Council on Foreign Relations.
Wages had eight years to recover from the previous recession. “And for workers in the lower paid, the revenues have increased strongly over the past two years,” he recalls.
The end of 2019, the low wages were increased at a rate unprecedented in 20 years, thanks in particular to the implementation in some States a minimum hourly rate.
The month of march, with 701 000 jobs, has brutally put an end to the continuous creations for over eight years. Unemployment rose to 4.4% when it was at its historic low in February.
Donald Trump, candidate for his own re-election, never missed an opportunity to emphasize that the unemployment of Hispanics and Blacks were also the lowest.
Behind this bright picture, the inequalities have continued to widen between the very rich (who have accumulated substantial gains to Wall Street) and the 90% at the bottom of the scale.
And the recession following the pandemic of Covid-19 “is going to exacerbate existing inequalities,” says Gregory Daco, chief economist at Oxford Economic because “the loss of jobs, sudden,, are concentrated in the sectors of services to low-income” in a country where there are few social safety nets and savings rates were extremely low, of the order of 8%.
Miguel Rodriguez, 55 years old, laments have been forced to point at the unemployment, for the first time since his arrival in the United States in 1983.
A native of el Salvador, he wondered now if the unemployment benefits, which do not take into account the tips (though the major part of his salary), will be sufficient to meet the needs of her three children, ages 10, 13 and 16 years old.
It does have “some savings” but it will not ” survive a few months “.
Another factor of inequality, 78% of those with the lowest income do not have a savings contingency to deal with unforeseen financial challenges, compared to 25% of people with highest income, details Gregory Daco.
“They are the people who need it the most who have the least,” he observes. Withstand a recession lasting turns out to be impossible.
“We need to prepare for impacts on employment and wages that are going to last at least until the beginning of 2021,” warns Bradley Hardy, a professor at the American university.
“Huge vulnerability “
“Even with the aid (of the State) generous “, the overhaul may take a long time: “the workers and companies will have to reconnect them “, he says.
It will also restore the consumer confidence, the sine qua non ” so that they can participate fully in the american economy “, he adds.
“Just as the financial crisis of 2008, has highlighted the great vulnerability of many Americans,” says Edward Alden.
And once again, the the most fragile people have been able to prepare for their retirement. The number of septuagenarians and octogenarians forced to work is not going to decrease.
According to the regional branch of Saint-Louis of the u.s. central Bank, among the population without a high school diploma, only 22% have a retirement savings plan.
“I am convinced that this recession will have negative effects on overall revenues, including some households apparently wealthy “, nods approval Bradley Hardy.
“Many middle-class households (and this is disproportionately true for the households in the black middle class) will be required to deal with debts in a context of low savings,” he said.
Miguel Rodriguez wants him, keep hope, despite the credits to be refunded: “as soon as we’ll be out of business, the economy will pick up and more beautiful, because people are going to want to get out “.