Giving Compass' Take:
- Austin Clemens reviews data on the combined, inequitable impact of COVID-19 and the Great Recession on American households.
- How has recovery from the Great Recession contributed to the marginalization of certain communities? How can we work to distribute equitable response packages for COVID-19 and the Great Recession?
- Read more about how you can work to effectively respond to COVID-19 and the Great Recession.
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The Federal Reserve’s 2019 Survey of Consumer Finances, or SCF, released last week, shows that the wealth of many U.S. households never recovered from the shock of the Great Recession more than a decade ago.
Moreover, disaggregating the data by demographic characteristics shows that many of these households fared worse than the average. Whiter, wealthier, and more educated households fared better, although even these struggled to recover their pre-Great Recession levels of wealth, demonstrating just how broadly felt the slow recovery of wealth has been.
That so many of these households would soon enter the coronavirus recession, which began in February 2020, in worse condition than they entered the Great Recession is a dire warning. This current recession is already deeper and families have fewer resources to draw on to protect themselves from its effects. The upshot: Further aid from Congress is critical to avoid repeating the mistakes made as the United States recovered from the Great Recession.
Households that fully recovered their pre-Great Recession levels of wealth are overwhelmingly White. While White households, on average, have 15 percent more wealth in 2019 than in 2007, Black households have 14 percent less wealth, and average wealth for Hispanic households declined by 28 percent. (See Figure 1.)
The lessons learned about U.S. household wealth across a variety of measures after the Great Recession demonstrate that the relative paucity of policymaker action after the economic gains from the American Recovery and Reinvestment Act of 2009 fed into the U.S. economy led to an overall weak recovery in U.S. household wealth. Today, that leaves many Americans struggling through the coronavirus recession. And that’s why Congress should not repeat the mistakes made by past Congresses, but rather continue to act forcefully to make sure there is a robust recovery.
Read the full article about COVID-19 and the great recession by Austin Clemens at Equitable Growth.