MacroMonitor Market Trends Newsletter December 2020

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Two Americas

The result of the 2020 presidential election is a referendum on what the New York Times calls "three interlocking supremacies: white supremacy, male supremacy, and capital supremacy—an intersection of male excess and an economy of toxic masculinity" (23 October 2020). Race, gender, and income are the most fundamental markers that Two Americas exist; all three are systemic problems that after more than two centuries are institutionalized.

Today, these three inequalities are colored by ideology—red or blue. Although the majority of citizens fall in the middle (the gap), it's the extremes that generally garner media attention and shape national discourse. For example, in late 2019, a Pew Research survey about income inequality found that 70% of Americans say the US economic system unfairly favors the powerful. Colored red, 63% of "high-income Republicans say the economic system is generally fair." Colored blue, "94% of upper-income Democrats say the economic system unfairly favors powerful interests."

COVID's effects and lockdowns exacerbate systemic problems. Talk, not conversation, is so contentious that our country's economic recovery now depends on the progress we make toward inequality resolution. The MacroMonitor offers facts: race (Black Americans, July 2020), gender (Women's Studies, October 2020), and this month, some facts about income inequality in the Two Americas.

Since 2002 a broad question about disposable household income has been included in the survey: "How much money does your household have on average at the end of a typical month after paying all of its basic and necessary expenses such as food, clothing, shelter, utilities, and so forth (disposable income)?" The household-level response is subjective; actual measures of income and assets, intersected with race and gender (among many other data points also available) paint a revealing picture.

Trend: Disposable Monthly Income

The number of Have-Not households (27.5 million in 2018) is higher than the number in 2002. The number of Have households (15.5 million in 2018) has been steadily increasing since 2002, but at a disproportionate rate since the Great Recession started in 2008. The chart shows the number of Have households—those with $2.5K or more in disposable monthly income—and Have Nots—households with $0 or a negative amount at the end of the month. Almost all Have-Not household heads are employed (94%); for many, there's simply too much month at the end of the money. They struggle, not because they aren't working, but because they aren't earning enough money to save or invest for their future. These facts are not "new" news. Provided the data are reliable and unbiased, the actual numbers behind what we already know is sometimes startling, often enlightening in longitudinal perspective, and imminently alarming and dangerous.

Without living in a Have-Not household, it is possible for Haves to understand intellectually what the data show, but impossible to understand the vulnerability felt and the ongoing stress of these households' uncertain existence. How one interprets the facts depends on the color of the lens one looks through. Without judgment of your color, addressing the root causes of Two Americas may be deemed a moral imperative by some, but is an economic imperative for us all.

Learn more about the differences between Have and Have-Not households so that your institution can plan strategically. How can your organization help the country move toward greater equality best, and profit from doing so?