BUSINESS US COVID economy sees the great divergence

BUSINESS

US COVID economy sees the great divergence

Shenzhen Daily

07:20, November 02, 2020


Photo: Agencies

WHEN the temperature dipped near freezing in Columbus, Ohio in mid-October, the children had no heat. The gas had been shut off in their apartment for nonpayment. DaMir Coleman, 8, and his brother, KyMir, 4, warmed themselves in front of the electric oven.

The power, too, was set to be disconnected. Soon there might be no oven, no lights and no Internet for online schooling. The boys’ mother, Shanell McGee, already had her cell phone switched off and feared she could soon face eviction from their US$840-a-month apartment. The rundown unit consumes nearly half her wages from her job as a medical assistant at a clinic, where she works full-time but gets no health benefits.

Just not far from McGee’s neighborhood, Kiki Kullman is having one of the best years of her life.

The real estate business she runs with her family just sold the highest-priced house in its history: a 13,000-square-foot estate, listed for US$4.5 million, that came with an elevator and a classic-car showroom. And in late October, Kullman closed on a home of her own — a US$645,000 three-story Colonial, painted a stately white with a front door flanked by columns, a pleasant place for her 2-year-old twin boys to grow up.

Columbus exemplifies the economic split animating America’s coronavirus crisis.

Professionals like Kullman are thriving, thanks in part to pandemic-induced policies by the U.S. Federal Reserve that have buoyed the stock market and fueled industries such as real estate with record-low interest rates.

For many lower-wage workers, meanwhile, the crisis has delivered a cruel shove, toppling families like the McGees who were already living on the financial edge. Nationwide, millions of people including hotel workers, retail clerks, waiters, bartenders, airline employees and other service workers have lost jobs as COVID-19 fears crushed consumer demand.

Economists call this phenomenon a “K-shaped” recovery, in which those on the top continue to climb upward while those on the bottom see their prospects worsen.

Ned Hill, professor of economic development at Ohio State University, called that downward slope of the K “fat and broad and long and ugly looking.” He said there’s little hope for a return to normal as long as coronavirus continues to spread unabated in the United States. In Ohio, COVID-19 cases are soaring and hit a record of 3,590 new cases Oct. 29. In Columbus alone, at least 643 people have died.

“People’s jobs and incomes have disappeared, and they aren’t coming back until people’s threat of dying from the virus dissipates,” Hill said. “That’s it.”

Located in the center of Ohio, about halfway between Pittsburgh and Indianapolis, Columbus is a city of some 900,000 people. Home to Ohio State University and the state’s capital, its employment is rooted in sectors like hospitality, education and health, government, and professional and business services.

That mix has allowed it to fare better during the crisis than some other Rust Belt cities that are more heavily dependent on manufacturing.

Related Stories

Terms of Service & Privacy Policy

We have updated our privacy policy to comply with the latest laws and regulations. The updated policy explains the mechanism of how we collect and treat your personal data. You can learn more about the rights you have by reading our terms of service. Please read them carefully. By clicking AGREE, you indicate that you have read and agreed to our privacy policies

Agree and continue