Don’t expect the post-COVID economic recovery tide to raise all the boats

    Oct 14, 2020

    CALGARY—What were you thankful for this Thanksgiving? If you were lucky enough to spend it with your family, complete with the illustrious feast featuring a cornucopia of traditional food items, count your blessings. There are many people who weren’t able to do so and the structural discrepancies between the haves and have-nots are growing during COVID.

    We are facing perilous economic times, characterized by a K-shaped “recovery,” rather than the V-shaped one promised by economic experts in the summer. “Canadian economic data is showing a ‘V’ shaped recovery so far,” proclaimed a July Deloitte blog entry dedicated to economic insights of the pandemic. Oh, okay. The post goes on to say that some evidence suggested “consumers were making fewer trips to stores and behaving in a more cautious way.” You’d think that would give the author pause, but instead he continued to paint a rosy picture of a quick economic rebound—hence the “V” in the shape of recovery—from a global pandemic that by that time had taken 8,857 Canadian lives. Seems like a pricy miscalculation on Deloitte’s part.

    Instead, we will more likely see a K-shaped recovery—when recovery actually occurs—which is one marked by diverging economic realities of specific sectors of the economy. In other words, as in the United States, we may be facing the most unequal economic recovery in history.

    The Canada-wide lockdown in March was necessary to stop the spread of the virus by “flattening the curve,” or reducing the second derivative (ah, calculus does have applications to real life). Many economic experts predicted that reopening the economy would encourage a rebound of business activity brought about by pent-up demand and a return to normal levels. What they didn’t factor into their propitious calculations were the consumption effects of the pandemic—fewer customers mean less revenue means less staff means higher unemployment. In other words, even a fully opened business would see a drop in revenue because consumer behaviour has changed in response to a public health crisis. As I wrote in my last column, ‘Rona “is the constraint to any rebound.”

    So, who’s winning? The stock market is performing better than ever—particularly tech, finance, and grocery stocks, to name a few. If you own stocks or own a home, you’ve benefitted financially from the economic effects of COVID-19. If not, you’re SOL. And therein lies the inequities of the economic “recovery,” whenever that is.

    “On the flip side is the situation in sectors including hotels, travel, entertainment, and restaurants, where establishments are closing (or might do so after patio season is over). Workers in those sectors are facing shortened hours or outright unemployment,” wrote economist Linda Nazareth in The Globe and Mail. These service sector workers are more likely to be racialized, with “the concentration of certain racialized groups in industries that have been disproportionately affected by the pandemic,” as concluded by the Financial PostThe August Labour Force survey from Statistics Canada emphasizes these inequities with statistical analysis that showed the unemployment rate falling 0.7 percentage points overall, while the unemployment rate for “Arab (17.9 per cent), Black (17.6 per cent), and Southeast Asian (16.6 per cent) Canadians continued to have significantly higher unemployment rates than Canadians who were not a member of a population group designated as a visible minority and who did not identify as Indigenous (9.4 per cent, not seasonally adjusted).” This is the first labour force survey that analyzed disaggregated data by race.

    Look what you find when you move the furniture to vacuum behind the couch.

    However, this discrepancy is nothing new and it’s not temporary, it’s structural. In 2011, the Canadian Centre for Policy Alternatives published a report entitled, “Canada’s Colour Coded Labour Market: The Gap for Racialized Workers,” which found that “even in the best of economic times, the pay gap between racialized and non-racialized Canadians is large: racialized Canadians earn only 81.4 cents for every dollar paid to non-racialized Canadians. The income gap stems from disparities in the distribution of good paying, more-secure jobs. The data show racialized Canadians have slightly higher levels of labour market participation, yet they continue to experience higher levels of unemployment and earn less income than non-racialized Canadians.”

    This is what Canadian multiculturalism has come to signify—racialized Canadians tryna make a dollar out of 15 cents while white Canadians enjoy access to good-paying, secure jobs in industries that haven’t missed a beat relocating their staff to the comforts of their suburban, 2000-plus-square-foot homes.

    So, the next time your off-brand uncle blabbers on at the holiday dinner table about systemic racism as a left-wing, Antifa conspiracy promulgated by liberal snowflakes, remind him that there is truth behind the numbers—if he can read.

    Erica Ifill is a co-host of the Bad+Bitchy podcast.