Home National News Exposed during coronavirus pandemic, weakness of U.S. economy connected to healthcare, manufacturing...

Exposed during coronavirus pandemic, weakness of U.S. economy connected to healthcare, manufacturing lost overseas

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Judith and Jose Ramirez of Honolulu are pictured in their home April 29, 2020. They were both temporarily laid off from their jobs at the Sheraton Waikiki Hotel due to the business downturn caused by the coronavirus pandemic. (CNS photo/Marco Garcia, Reuters)

WASHINGTON — Regardless of who wins November’s presidential election, the winner will have his hands full repairing and revamping an economy whose weaknesses many say were exposed during the coronavirus pandemic.

There also is a healthy share of long-standing economic issues that needed addressing but have been pushed to the back burner by the pandemic.

“COVID has really connected health care to the economic well-being of the nation,” said Nicole Smith, chief economist at Georgetown University’s Center on Education and the Workforce.

The pandemic, Smith added, “really shined a light on the flaws that we have, really been drug under the rug for the last 20 to 30 years. One of those things has been the movement of trade overseas. Whether that’s because initially NAFTA and other types of trading agreements and arrangements which the U.S. relied on to improve trading relationships with free-trade areas — what this has really meant in real terms is that the manufacturing process has been shipped overseas.”

The exodus of manufacturing jobs as the U.S. economy has shifted to a service-delivery model might not necessarily be a bad thing, argued Stan Veuger, a resident scholar at the American Enterprise Institute.

“People want the stuff they want,” Veuger said. “I also don’t think we should design our economy based on a once-in-a-century pandemic.”

Service-economy workers, typically earning less than their manufacturing counterparts, have been hit hardest in the pandemic, according to a Washington Post study of job losses. But “the work is often much safer than the work that was in mass-scale manufacturing or mining settings,” Veuger told Catholic News Service.

“Goods-producing industries are very labor intensive,” he added, pointing to the meatpacking industry, where mass outbreaks of COVID-19 shut down plants in the early weeks of the pandemic. “If we were as labor intensive (as that), I don’t think we would have been able to produce goods looking like that, people standing next to each other. Automaton has made those industries much more resistant to infectious diseases.”

For those looking askance at mergers and buyouts in the tech and media sectors, there also has been “greater consolidation and concentration in agricultural markets, and when outbreaks started in meatpacking in particular, it became clear when 50 plants account for 98% of the meat supply in the U.S. for processing capacity,” said Michael Stranz, vice president for advocacy for the National Farmers Union.

“When shutdowns began, we started to feel the impact both on the farmer’s ability to market and also on the consumer’s supply chain. Prices went down for farmers at the farm gate, but up for consumers at the retail outlet. Also, the consolidation made conditions unfair for workers,” Stranz said.

In dairy, “some of the changes were going to be difficult no matter what, the pandemic has made things worse, he added. “School milk is not really a thing anymore — or greatly reduced — and the restaurant industry is greatly upended,” Stranz said. “It’s difficult for farmers to switch over to cheese production.”

“The safety net was pretty weak going in for a lot of vulnerable populations,” said Chad Stone, chief economist at the Center for Budget and Policy Priorities.

“When there was a major contraction in economic activity, the job losses were concentrated in businesses and industries that (have a) disproportionate number of workers without a college degree — and those are disproportionately people of Hispanic origin, Black workers, women workers,” Stone said.

Far more of these jobs were lost “when the economy crashed,” he said, “and the unemployment insurance system was not really prepared to deal with those job losses and provide adequate relief.”

Republican President Donald Trump has touted his economic policies of tax cuts and deregulation for bringing Hispanic and Black unemployment rates down to historic lows. He and his supporters say the U.S. economy was soaring before the pandemic hit.

But obscured amid the pandemic have been “problems of hunger and homelessness that have been there, are still there, not addressed,” according to Stone.

Public housing programs are an entitlement, he added, “but it’s not a program like Social Security, where everybody who qualifies gets it. There’s only a limited amount of housing assistance … and it’s been that way for a long time.”

The eviction moratoriums, “while they were in effect, helped forestall homelessness,” Stone said, “but we still have the problem of housing affordability.”

Georgetown’s Smith said the pandemic has exposed other weaknesses, those in U.S. manufacturing capacity. At one point, she noted, as much as 40% of all U.S. jobs were in the manufacturing sector. Now, that figure is more like 10%.

“In the middle of the pandemic, we had our hands in the air, we had limited access to PPE — personal protective equipment — we had limited access to masks,” she said. Yet in Southeast Asia, “their domestic governments decided, ‘we have trade obligations to you and contractual obligations, but we’re going to keep these lifesaving things that we created for our own people.'”

In a milieu where Lysol is “more precious than gold,” Smith added, “you don’t want to be in a type of situation where we don’t have masks — N95 masks — for health care workers.”

Faced with criticism over shortages of PPE, the federal government did begin to send out equipment from the nation’s Strategic National Stockpile in the spring, but state officials said the response was too slow.

For the farmers union’s Stranz, the presidential victor’s “big challenge will be that we don’t forget the lessons the pandemic is teaching us and is making things very clear.”

The current dip in COVID-19 cases and deaths, he said, “doesn’t mean stand down, it means fix things so it doesn’t happen again.”

Stranz, too, saw international trade getting short shrift. “There’s been damage to our export markets in the disputes with China and lack of a recovery from it needs to be addressed,” he said. “We have to do something about the long-term price swings that are so hurtful to farmers.”

“I never thought that this administration’s (trade) strategy was particularly coherent,” said AEI’s Veuger. “Oh, there’s this huge geopolitical threat. They act against (Chinese president) Xi Jinping. The actual on-the-ground objective seems to be ‘we’re going to try and sell more soybeans.'”

Meanwhile, “a lot of state and local governments are pretty fragged out. They have to start cutting programs and services, which is not ideal,” Veuger said. “The federal government has to think better about how it can serve as a backstop.”

“There’s all of the hardship that the Pulse data (from the Census Bureau) will continue to be revealing,” said Stone, of the Center for Budget and Policy Priorities. “I don’t see much in the cards that’s going to lead to substantial relief for those who are in a life of hardship. There’s going to be lots and lots of families that will really be struggling to get by” with CARES Act unemployment subsidies having expired.

Another round of stimulus checks to help struggling Americans may be in the offing. Late Oct. 1, the House passed a new coronavirus stimulus package: a revised HEROES Act — Health and Economic Recovery Omnibus Emergency Solutions Act. The $2.2 trillion bill is $1.2 trillion less than a measure the House passed in May and has to be taken up by the Senate.

Were Democrat Joe Biden to defeat Trump, a Republican, Stone said he would expect to see “substantial proposals to fix — or least meliorate — a lot of these issues.”

“That’s the political fate: Assume a trifecta with the Democrats at least controlling the Senate — although control is not assured,” he added.

If he wins, Trump said he plans to continue to reduce taxes, rolling back taxes for both individuals and businesses, to stimulate economic growth and create more jobs. Biden has pledged to eliminate Trump’s tax cuts, raise taxes on the wealthy and corporations and use the revenue to create more jobs.

Stone sees only two surefire remedies: “Getting money into people’s hands is good for the recovery. … Getting the vaccine is good for the recovery.”