The burdens of this pandemic are not borne equally. Economists Heather Boushey and Michelle Holder join the show this week to expose how the coronavirus is exacerbating the already-deep inequalities in our society.

Heather Boushey is the President & CEO and co-founder of the Washington Center for Equitable Growth. She is one of the nation’s most influential voices on economic policy and a leading economist who focuses on the intersection between economic inequality, growth, and public policy. Her latest book is Unbound: How Economic Inequality Constricts Our Economy and What We Can Do About It.

Twitter: @HBoushey

Michelle Holder is an Assistant Professor of Economics at John Jay College, City University of New York. Prior to joining the John Jay faculty, she worked professionally as an economist for over a decade in both the nonprofit and government sectors.  Her research focuses on blacks and women in the American labor market, and her economic policy reports have been covered by the New York Times, the Wall Street Journal, the New York Amsterdam News, and El Diario.  Her first book African American Men and the Labor Market during the Great Recession was released from Palgrave Macmillan in 2017.  Michelle’s educational background includes master’s and doctoral degrees in economics from the New School for Social Research in NYC, and a Bachelor’s degree in economics from Fordham University.

Twitter: @mlholder999

Further reading:

Unbound: https://www.hup.harvard.edu/catalog.php?isbn=9780674919310

The coronavirus recession and economic inequality: a roadmap to recovery and long-term structural change: https://equitablegrowth.org/the-coronavirus-recession-and-economic-inequality-a-roadmap-to-recovery-and-long-term-structural-change/

The “Double Gap” and the Bottom Line: https://rooseveltinstitute.org/wp-content/uploads/2020/03/RI_DoubleGap_Report_202003.pdf

Before COVID-19, corporate America shortchanged black women $50 billion annually: Why all women should care: https://msmagazine.com/2020/04/07/before-covid-19-corporate-america-shortchanged-black-women-50-billion-annually-why-all-women-should-care/

Inequality and poverty were destroying America well before Covid-19: https://www.thenation.com/article/society/inequality-and-poverty-were-destroying-america-well-before-covid-19/

Our uniquely American virus:

https://prospect.org/coronavirus/our-uniquely-american-virus/

Black Americans face alarming rates of coronavirus infection in some states: https://www.nytimes.com/2020/04/07/us/coronavirus-race.html

The coronavirus pandemic and the racial wealth gap: https://www.americanprogress.org/issues/race/news/2020/03/19/481962/coronavirus-pandemic-racial-wealth-gap/

Website: https://pitchforkeconomics.com/

Twitter: @PitchforkEcon

Instagram: @pitchforkeconomics

Nick’s twitter: @NickHanauer

David Goldstein:

The inequality that we’ve talked about has helped contribute to a crisis that is now making inequality worse.

Michelle Holder:

How do we improve the condition of workers in general such that a pandemic like COVID doesn’t result in disparate outcomes?

Heather Boushey:

The decisions that we as a country have made has not created the kind of resiliency that we need.

Nick Hanauer:

Coronavirus has uncovered how one of the richest economies in the world remains incredibly fragile.

Speaker 5:

From the offices of Civic Ventures in downtown Seattle, this is Pitchfork Economics with Nick Hanauer, one American capitalist’s desperate attempt to save us from ourselves.

Nick Hanauer:

I’m Nick Hanauer, founder of Civic Ventures.

David Goldstein:

I’m David Goldstein, senior fellow at Civic Ventures. So the past few episodes, Nick, we’ve been focusing on the Coronavirus pandemic, and it’s not surprising that the theme that keeps coming to the surface is inequality.

Nick Hanauer:

Yeah. The really interesting thing, of course lots of people have been thinking really carefully about the Coronavirus’ impact on our society, and I think it’s really clear that it basically magnifies the underlying vulnerabilities and conditions that made our economy and fragile and less resilient, and we’re just seeing what happens when you take jobs away from millions and millions of families that had been underpaid for 40 years and, therefore, had no savings.

Nick Hanauer:

An economy that was less unequal, where many more families had more economic resilience, we’d be in a very, very different spot. To say nothing of the other incredibly stupid things about our economy, like huge proportions of families, particularly vulnerable workers, what we’re now calling essential workers, with no sick leave, for instance. So you’ve got this absolutely absurd circumstance where essential workers are staying on the job, while sick, infecting other people because to stay home means to go into bankruptcy.

David Goldstein:

What we’re seeing here are two interrelated crises that are feeding back on each other: there is a massive health crisis in the pandemic and a massive economic crisis. One of the things that’s apparent is that this rise of inequality, this fragility that you were just talking about in the economy, with vast majority of households, actually left us more vulnerable to a pandemic because you left people who just could not afford to stay home, or who didn’t have access to health care, so that we couldn’t actually stem this pandemic in the bud when it first started.

David Goldstein:

At the same time, this economic fragility has left our entire economy more fragile and, of course, this economic fragility feeds back into a public health crisis. The inequality that we’ve talked about for the past couple years has helped contribute to a crisis that is now making inequality worse because the people who were vulnerable going into it are the ones who are being the hardest hit, both in terms of health and income.

Nick Hanauer:

And we have two fantastic guests with us. Our old friend, Heather Boushey, who is the President and CEO of the Washington Center for Equitable Growth. And Michelle Holder, who’s a Professor of Economics at John Jay College at City University of New York. And I think both of them are going to be able to shine a bright light on some of the harder to see or understand dimensions of this crisis.

Heather Boushey:

My name is Heather Boushey, I am the President and CEO of the Washington Center for Equitable Growth. I’m thrilled to be on this podcast today. I had a book come out last fall, called Unbound: How Inequality Constricts Our Economy and what We Can Do about it, and it seems rather apt for these tough economic times.

Nick Hanauer:

Golly. So, Heather, you and your group have been busy publishing. In a recent report, you wrote that the new Coronavirus has uncovered how even as one of the richest economies in the world, the United States remains incredibly fragile, and you outlined a set of key vulnerabilities we’re facing right now. Because of the massive inequality we’ve helped create, why don’t you start by running our listeners through those vulnerabilities?

Heather Boushey:

Certainly. I think it’s really quick striking, Nick. You think about where the United States was just a couple of months ago, I mean if you just looked on the surface, our economy seemed strong, it seemed like we definitely had this very low unemployment rate, we were worried that wages weren’t rising as fast as they should have, given the low unemployment, but there were a lot of folks who didn’t seem to think that there was much wrong with the economy, and yet there were millions who could see the underlying fragilities, and it is those that are now at the top-of-mind.

Heather Boushey:

We can see that, first and foremost, this is a health crisis, this is a crisis that we are living through right now that is because of a virus going through our society, and yet we are one of the few nations, in the United States, that does not provide workers paid sick time or paid leave, so you have all of these people who were vulnerable to getting sick at work and then transmitting that disease to their colleagues, to their business clients, their customers and then, of course, back home to their families. We also, of course, are one of the only countries that does not make sure that everybody has access to health care, so another fragility that was longstanding, but that this pandemic underscores how important it is to make sure that everybody can make sure that they can get health care.

Nick Hanauer:

And to be clear, for a huge proportion of families, even if they do have access to health care, it’s ruinously expensive to use the system.

Heather Boushey:

Definitely. And there were all of these stories, especially at the beginning of the crisis, of people going in to see their doctor, to ask, “Do I have this Coronavirus?” And then, even though they had health insurance, coming out with these very big expenses, a real fragility, a real vulnerability. These were specific fragilities for this crisis, but what it really underscores is that the decisions that we as a country have made on how to run our economy, on who should be making decisions about what’s good for our people and our society, has not created the kind of resiliency that we need.

Heather Boushey:

One of the things that we’ve been thinking a lot about over the past few months is how too often we’ve pushed on to private actors and the markets the work that only government can do, and that’s a longstanding fragility. And we can see it here right now that we need a federal government that can craft a coherent, consistent nationwide response, and yet we have gutted our government to such an extent that we still don’t have testing for all who need it, we still don’t have protective gear for all who need it, especially those at work.

Heather Boushey:

So those are some of the ways that we have these underlying fragilities, both in terms of the conditions on the ground and how we think about our economy and who it’s for and the role of government in our society.

David Goldstein:

So I’m curious, Heather, how much less resilient is the typical American household heading into this recession than they were the last one? In the years since, household wealth has not recovered, wages have been flat. It seems that we’re even more fragile going into this than we were in 2007.

Heather Boushey:

I’m so glad you asked that. It’s been decades of building fragility, growing fragility, decades of families in the middle-class on down who have not experienced the kind of economic security that could prepare them to be resilient in a crisis. So we know from data from the Federal Reserve that somewhere around 4 in 10 people don’t have enough money in the bank to meet a $400 expense if they had one, they couldn’t pull together $400 in cash for something unexpected. That speaks to a real lack of resiliency.

Heather Boushey:

In the Great Recession, of course, people’s home values had skyrocketed up and then a lot of people took on more debt to pay for homes or to take money out of their homes to use for other things, and while it is true that we’re not in the middle of the same kind of housing bubble and debt hasn’t skyrocketed, it is still the case that families remain highly leveraged and they have the added burdens now, of course, of student debt, alongside mortgages and all the other kinds of credit.

Heather Boushey:

But you put the nail on the head here: while those at the very, very top of the wealth distribution saw their wealth come back fairly quickly after the Great Recession, within a couple of years of it ending, for the vast majority of American families, that wasn’t the case, and too many have still never recovered the wealth that they lost and, for many, they were only just now recovering the income that they had lost, which of course didn’t allow them to build up that wealth over the past decade.

Heather Boushey:

And I just want to add one more point on that, maybe we’ll get to it, but I don’t think it’d be emphasized enough: those families and those workers and those small businesses owners who have the least to fall back on, who are going to be the first to put themselves and their families in danger of contracting this Coronavirus because they need to get back to work faster than anyone, or get back to their small business. So, I think that we’ve often thought of economic security just as an economic issue, but this is a health issue as well.

David Goldstein:

And that gets to another issue that I think has been exacerbated greatly over the past 15 years, and that is the way we’ve been shifting risk onto individuals, that’s the whole gig economy in a nutshell. It just seems like such a more precarious world to live and work in than it was just 15 years ago.

Heather Boushey:

I think that’s true. That economy where everybody is a so-called independent contractor, but really they work for a firm that sets the conditions, but then those firms don’t pay into our unemployment insurance system, don’t pay into people’s Social Security, don’t pay into the protections that provide people with that economic security for when they need it. And then, of course, they’re also not responsibility, in many cases, if that worker is hurt on the job or if they get sick and they need paid sick time-

Nick Hanauer:

Or for health care.

Heather Boushey:

Yeah, or for health care.

Nick Hanauer:

I had not considered that particular flavor of parasitism because those companies aren’t in that system, and so they don’t contribute into it, and now we bail them out.

Heather Boushey:

Exactly. And I’m glad we did-

Nick Hanauer:

Yeah, we needed to.

Heather Boushey:

But it was [inaudible 00:12:19]. You’ll find actually, if you really think about this crisis, for me, it’s been, every three days, an epiphany of like, “Wait a minute, wow, they didn’t pay for that” and “Whoa, they didn’t pay for that” into these different systems, I mean it really is a real glossary of all the ways that these inequalities are playing out across our society and across our economy where those with the most have not contributed to the common good, but yet-

Nick Hanauer:

But they’re getting bailed out.

Heather Boushey:

But they get bailed out. So it’s a heads-you-win/tails-I-lose.

David Goldstein:

Let’s talk about some of the structural changes we need to do not just to get through this recession, but to leave us in a better position more resilient after the recession.

Heather Boushey:

First, we need to make sure that we are connecting the dots between how we think about the health of this thing we call the economy and the health of the people that really are the economy. So what are we doing to ensure that people can show up healthy and ready to work? It’s everything from paid sick days, to access to health care, and making sure that people are safe on the job.

Heather Boushey:

One of the things that we’ve seen over time is there being questions around food safety and safety of products that are connected to worker health and safety on the job, and we can really see that our lack of enforcement of occupational health and safety rules and the lack of really thinking those through for the 21st Century has made us especially weak. If you eat meat and you’re watching the news now, you know that a not insignificant share of meat production is not being done right now because those workers were getting sick because nobody was thinking about how to make sure that they stayed healthy and safe. That’s one set of fragilities that we can address that are structural.

Heather Boushey:

A second, and we’ve already mentioned this one as well, we have to think about what our markets look like. Do we have industries that are competitive, where there’s room for new ideas, for entrepreneurs, for new faces, new voices? Or are industries dominated by a big monopoly or oligopoly where they are able to extract a lot out of that market, keep prices high and not allow competition? This is an issue that’s been growing over time, but one I think is only going to magnify an importance as this crisis moves on and small businesses are unable to hang on. Again, what is the role of the public sector in our economy, and where is it appropriate for us to have collective responses, government responses, versus assuming that the market can solve every problem?

Heather Boushey:

There’s two more that I want to mention. One is we need to give workers a voice at work and, for too long, they haven’t had it. I know that, Nick, I’m sure you say this, I’m sure this comes up on every podcast, but one of the unfun facts is that we have fewer people as a share of the private sector economy who are in unions today than we did before we made the right to collectively bargain legal in the 1930s, so it’s like we never even created those laws that gave people the right to organize. It’s down in the single digits. We know that unions can help protect people in the workplace; if we had more unions, we might have had less transmission of this virus. But it’s a structural feature of the economy that balance the power between entities that’s so important.

Heather Boushey:

And then, finally, we have to raise taxes, and we got to raise taxes at the top, we’re going to have to do it. The thing that gets me right now is that there’s so many people who are able to telecommute and to use Zoom for their meetings or all of these other great technical devices, get on conference calls, don’t have to put their lives on the line, and those folks are disproportionately at the higher end of the economy, and disproportionately White, yet there are so many others who are risking their lives, and we need to have a conversation about how we are taxing at the top, that’s probably going to include the very, very wealthy and probably going to talk about undoing a lot of those tax cuts we did in 2017, but also in prior years. We have to fix this.

Nick Hanauer:

Our view is that pathogens are inevitable, but pandemics are a consequence of governing incompetence and a lack of preparation. I do think that it is shocking that South Korea had its first reported case of Coronavirus on the same day as the United States of America, but, as of today, they’ve had 10,800 cases and 250 deaths, and we’ve had a million cases and closing in on 60,000 deaths; to be clear, we are a bigger country, but if you do your divided-bys, we’re still 10 times worse than them. The difference between our two societies’ capacity to address a crisis like that is something that Americans really need to reckon with. It’s just good governance versus bad governance, good leadership versus bad leadership, national solidarity versus no national solidarity. It is depressing.

Heather Boushey:

I could not agree with you more.

Nick Hanauer:

Hopefully we’ll learn the right lesson.

Heather Boushey:

100%. Let me add one wrinkle to that story that I just saw today, covered by Slate online. The South Korea story is really important and true, and then you look over to Singapore, which also originally did a really good job. I think, over the first couple months of the crisis, they had reported just a few more than 500 cases of COVID-19, but, recently, they’ve had a significant increase in cases, and one of the reasons is that about 80% of the new cases that they have now, going from about 500 to over 10,000, so a significant increase, but 8 in 10 of those can be traced to dorms where migrants live.

Heather Boushey:

The lack of thinking through, we’re all humans, everyone can get it, and just because someone is poorer, that you don’t need to protect them because we’re all at risk, we’re all in this together. And so that’s a real case study as well, that even if you just fix things just for the rich people or the people that have their own homes, you actually aren’t fixing things, so you need that whole story there.

Nick Hanauer:

Yeah. And in that sense, the virus is a really interesting metaphor for the economy. If a few people are well off and everyone else is poor, eventually the whole thing comes tumbling down and, likewise, there will be really almost no place for the wealthy to hide, either physically or economically, if most poor people get sick.

Heather Boushey:

Yeah. We’re all one economy and it’s all staffed by humans.

Nick Hanauer:

Well, Heather, we have gone a little bit over time, but this has been absolutely fabulous.

Heather Boushey:

Thanks so much. All right.

Nick Hanauer:

Okay, take care. Bye.

David Goldstein:

Bye. So, Nick, when we talk about inequality in the economy, of course, even the inequality is unequal.

Nick Hanauer:

That’s so well-said.

David Goldstein:

It’s not just broadly going, “Most people are unequal,” the impact disproportionately falls on women and people of color.

Nick Hanauer:

Yeah, Goldy, I think you put that really well. In America, even our inequality is unequal. Basically, people in our society that have the least power get taken advantage of the most. And if you are both disadvantaged by race and disadvantaged by gender too, you win the double whammy prize of exploitation.

David Goldstein:

There’s a double wage gap for women of color.

Nick Hanauer:

And, today, we get to talk to somebody who knows a lot about that.

David Goldstein:

Michelle Holder is an Assistant Professor of Economics at John Jay College, City University of New York, and recently the author of a report from the Roosevelt Institute, The “Double Gap” and the Bottom Line: African American Women’s Wage Gap and Corporate Profits.

Michelle Holder:

My name is Michelle Holder. I’m a labor economist by training, I look pretty much almost singularly at marginalized groups in the labor market, which would include women and people of color, the LGBTQ community. And I would like to plug, I just did an oped for Ms. Magazine on COVID and Black women.

David Goldstein:

Obviously, we have a broadly unequal economy, but we wanted to talk a bit about the inequality of the economic impact of this pandemic.

Michelle Holder:

As a labor economist looking at women and people of color and the American workforce, I already know the broad strokes that women are paid less than men, that Blacks are, on average, paid less than Whites, and the intersection of the two, Black women, it’s actually among the lowest paid demographic group, if we just put aside for a second the fact that Latinas and Native American women are also underpaid. So I wanted to get a sense of what that meant, economy-wide, meaning I knew, on an individual level, that there are these impacts of wage disparities for women and, of course, for their families and, obviously, if they’re single mothers, it affects their children.

Michelle Holder:

But I really wanted to wrap my head around what these wage disparities meant at an aggregate level, and so that led me to the work that I did for the Roosevelt Institute, where I looked at what I coined the “double gap”. So, what’s the aggregate impact in the economy of these gender and racial wage disparities for Black women? And so what I found is that, and mind you, this is a conservative estimate, number one, given my methodologies and, number two, I’m only looking at compensation in the form of wages and salaries, I’m not looking at benefits, I’m not looking at time off, I’m not looking at other non-pecuniary benefits that employees can receive.

Michelle Holder:

And I use as my reference group White, non-Hispanic men because according to the economic literate and lots of other literature, they, as a demographic, possess or appear to possess the best bargaining power with employers, and so they were the benchmark by which I measure how Black women were faring. And so what I found was that, on an annual basis, or at least in 2017, the aggregate impact of the loss in wages to Black women, meaning what they would have earned given the skillsets they possess, given their educational attainment, given their work experience, what they would have earned had they been White, non-Hispanic men. In the aggregate, the loss was $50 billion.

David Goldstein:

Can I ask a question just for a point of clarity: how much of this wage disparity is between people performing the same type of job or due to wage disparities between categories of jobs that Black women and women in general tend to do as opposed to men and White men?

Michelle Holder:

Right. I’m so happy you asked that question. Very little of it. What I do in my analysis is try to compare apples to apples, aside from the gender and racial differences. So I’m comparing Black women with the same amount of education, the same amount of training, the same amount of work experience, working in the same jobs, or very similar jobs as White, non-Hispanic men. So let me give you a perfect example because I’m getting into economic wonk talk, so let me step back.

David Goldstein:

We love that, that’s okay. We’re a wonky show.

Michelle Holder:

Okay. So one of the occupations that I found a huge disparity was in sales, so there’s a big wage gap between Black women and White men. Now, in that particular occupation, we can absolutely ascribe a significant chunk of the difference due to the fact that, in that occupation, Black women tend to be in retail sales, whereas White men tend to be in sales occupations where they actually earn commission.

Michelle Holder:

So, that’s a situation where I was looking at the same occupation, but Black women were in lower-paying suboccupations and White men were in higher-paying suboccupations. So that is a case where it’s a similar job, both workers have similar training, similar amounts of experience in terms of length of working, similar education, but one group is channeled into a higher-paying occupation and the other group is channeled into a lower-paying occupation. I try to get as close to apples-to-apples as I can, putting aside the race and gender differences.

David Goldstein:

It’s interesting to keep in mind, especially at this moment of crisis where you have people having lost their jobs and heading into this with very few savings, not able to pay the rent. There is a report out today that a third of renters didn’t pay rent in April, 40% of Americans not able to cover a $400 emergency expense. At that higher wage, at that higher income, how much more resilient all Americans would be, but certainly the most vulnerable who have really gotten the least out of the economy over the past 40 years.

Michelle Holder:

We want to think of these wage disparities as anecdotal, it’s like family-by-family, and so, okay, yeah, one family has maybe 10 or $20,000 less than another family, given these wage disparities. But that makes a difference when we are talking about instances where you need what economists call “income smoothing” so that you need to rely on what you were able to amass, if you’re able to amass anything, when there are these times where you’re laid off, where you lose your job. And so if you’re talking about a community that is losing out on $50 billion per year, that’s money that could be used for income smoothing, it could be used for childcare, it could be used for paying off debt, it could be used for these student loans. Absolutely, the problem with these gender gaps and these wage gaps is it just makes these groups less likely to be able to survive when things like COVID-19 and the Coronavirus wreck and ravage our economy.

David Goldstein:

And so now on top of this double gap, we have a pandemic economy that is disproportionately hurting low-wage workers, the same people who are suffering under the double gap are the ones that are most likely to be losing hours or losing their jobs right now.

Michelle Holder:

So I live in New York City, and we’re the epicenter of the epicenter. Here, the African American community is fairly proportional to … actually, we’re more than proportional, African Americans are about 13% of the U.S. population. Here in New York City, we’re over 20%, so we’re more than proportional, but Black women tend to be employed in those occupations. For example, here in New York City, personal care occupations have been completely shut down: hair care, salons, barbershops, lots and lots of lower-wage Black men and women working those occupations.

Michelle Holder:

I know with our restaurants, that industry, it’s definitely impacted the Latinx community in New York City and, to a lesser degree, the African American. But, yeah, Black women are in these occupations which are vulnerable to economic downturns. But I will say that there are some industries where it does feel like there is a little bit of protection for Black women. For example, Black women tend to be overrepresented in the government sector, and right now, thank goodness, there hasn’t seemed to have been any scale-backs in government employment in New York City; in fact, we need all of our government workers right now.

Michelle Holder:

Black women also tend to be employed in occupations like as cashiers, and so all of our grocery stores and supermarkets and pharmacies, all of that has to remain open right now, so there are some industries that, given the nature of this virus, there seems to be a little bit of protection in terms of job loss, but that is not the overwhelming story and the overwhelming narrative.

Nick Hanauer:

One of the themes that we’ve been exploring on the podcast these last days is, of course, we’ve been arguing for a long time that neoliberalism, at the end of the day, is not going to work out.

Michelle Holder:

Right.

Nick Hanauer:

What the Coronavirus pandemic does is make all of this stuff more vivid. I’m wondering if you could just help us understand the ways in which the Coronavirus is making the stuff that you work on more vivid?

Michelle Holder:

You guys being some savvy guys and chicks over there, I know you know that claims for unemployment insurance are just astronomical, so, again, I’m just at the beginning of looking at what the labor market implications are for women and people of color. But one thing I want to highlight, because I can’t imagine that I’m the only person this has occurred to, but recall when Katrina happened and we saw all of these poor African Americans on rooftops begging for help, and after that catastrophe, it was very clear the group that really got the brunt of that tragedy, it wasn’t just Black people, it was poor Black people.

Michelle Holder:

And so with COVID, what we’re seeing in New York City is the folks who are dying from the disease are similar to what happened in Katrina, it’s poor Black people, it’s poor Latinx people. And so aside from the economics of it all, I’m also looking as another human being at the human toll and thinking, “This shouldn’t happen.” Something like Katrina should not happen again in the U.S., where it is poorer Brown and Black communities that are dying from this disease.

David Goldstein:

And happening at a national scale. This is Katrina at a national scale, and you’re seeing these patterns reproduce throughout the country, you’re seeing it in Michigan. You look in a city like St. Louis, where 100% of the COVID deaths have been African Americans. You look at cities in Michigan and in Wisconsin, where African Americans, and in New York really, where they’re dying at twice the rate of their representation in the population. It’s everywhere, and it’s not that the virus itself is racist, it’s that our economy is, and poverty largely tracks color in this country and has forever.

Michelle Holder:

So what you’re going to see, and I’m glad you pointed that out, is as this virus moves westward even more so, they’re going to be poor White rural folks, poor White folks, rural or not, who will also succumb because it’s both poverty … Here, in New York City, poverty does crosshatch with race. But, in other parts of the country where that may not-

David Goldstein:

[crosstalk 00:34:46].

Michelle Holder:

Yeah, it’s going to happen there.

Nick Hanauer:

For sure. Talk to us a little bit about … be the … what do we call it, Goldy? The benevolent dictator.

David Goldstein:

Yeah, benevolent dictator question.

Nick Hanauer:

If you had to rewind the clock, what do you wish the economy was a little bit more like? And, going forward, what should we do?

Michelle Holder:

Oh my gosh, rewind the clock? Do you know how far back that clock would have to be rewound?

David Goldstein:

Okay. Let’s make this an easier question.

Michelle Holder:

Okay, thank you.

David Goldstein:

I’m going to make this an easier question for you. Just, going forward, forget about all the mistakes and evil we’ve done in the past, we want to prevent another pandemic from happening in the future, and we want to prevent it from impacting American families so unequally, what would you do to prepare us and prevent another disaster like this?

Michelle Holder:

All right. Of course, I can’t speak to really managing a pandemic, but what I can speak to is improving the economy, and I think that’s what you’re asking. How do we improve the economy, how do we improve the condition of workers in general such that a pandemic like COVID doesn’t result in disparate outcomes based on race, ethnicity, gender, that type of thing? So one of the things that I write about in my paper … Bottom line, what I’m talking about is lost resources to the Black community because women are not paid as much as men and Black women are definitely not paid as much as men.

Michelle Holder:

So, for me, just grounded within the research I’m conducting, what I would like to see is that American corporations begin to grapple with the still existing gender wage gap. If corporate America can acknowledge, writ large, number one, there is a gender wage gap, and I’m not even talking about Black women at this point, I’m just talking about all women, if corporate America grapples with the issue that women, writ large, in the U.S. are underpaid and take steps to chip away at this.

Michelle Holder:

One step, one thing that corporate America could undertake is something I call a “pay parity audit”. Now this would be voluntary, but what I’m essentially suggesting is that someone with the expertise come in, look at the employment and wage structure in a company and determine whether or not there appears to be pay disparity issues based on gender, based on race.

Nick Hanauer:

You know what? I think that is a terrific idea. I think it’s a terrific idea. And, by the way, there’s the infrastructure to do it.

Michelle Holder:

There is absolutely the infrastructure to do it. And economists train the way I’m trained, and I’m not advocating that I do it, but I’m just suggesting someone like me could easily, along with some assistance of course, go into a corporation, if they opened up their employment and wage data, we are quantitatively trained to be able to determine there is a disparity based on a particular characteristic here.

Nick Hanauer:

Michelle, is there any questions that we haven’t asked that you wished we had?

Michelle Holder:

This is going to be a biggie, so perk your ears up. My report is not a policy one, it’s an economic one, so I don’t really get into policy recommendations, but one thing I did say at the end of the report, besides my idea about these pay parity audits, the other thing I say is: look, as women, and as Black women, we can take some action too. Not that it is our responsibility to close this humongous gender and racial wage gap, or the double gap, it’s not our responsibility, but there is something we can do, and my recommendation is this: I suggest that Black women …

Michelle Holder:

Actually, I suggest all women need to, when they are in the position, once our economy improves, whenever that’s going to happen, where they are negotiating their salaries, their wages, or negotiating a promotion, women should routinely get into the habit of asking for at least 10% more than either they think they’re worth, they are told they’re worth, or that they’ve research they’re worth. And the reason I landed on this 10% figure is because research shows that when women try to negotiate as aggressively as men, that there’s a backlash, there can be a backlash.

Michelle Holder:

We know, from the data, that the gender wage gap is 20 cents on the dollar, women make 80 cents for every dollar men make; we know, for Black women, it’s much larger. But what I don’t suggest is that we then go in and try to ask for 20% more, 30% more because we may encounter this backlash. But we need to routinely get into the habit of, once we’ve decided this is what we think is fair, ask for more, not a lot more, just more, 5% more, 10% more, just more.

David Goldstein:

Yeah, don’t negotiate like the Democrats in Congress, by negotiating [crosstalk 00:40:42]. Nick, what’s your tagline, “Employers don’t pay you what you’re worth”?

Nick Hanauer:

We pay you what you have the power to negotiate.

Michelle Holder:

There you go.

Nick Hanauer:

Well thank you so much for joining us, Michelle, it was really nice to meet you.

Michelle Holder:

Same here. It was a great discussion, thanks guys.

Nick Hanauer:

Cool. Thank you.

David Goldstein:

Great. Thank you.

Nick Hanauer:

As I reflect on these conversations, again, I think that the thing that really just pops out for me is that this pandemic just has magnified the existing pathologies in the economy, that a crisis like this reveals all the cracks, all the weaknesses and amplifies them, makes them worse. I think that the long-term impact of this crisis is going to be big and bad for a lot of folks, although out of that wreckage, ideally, will come a new consensus about the role of government, the nature of the kind of labor standards that we want to embrace in this country, and the kind of democracy we want. Because all of the pathologies that exist in our economy, all of the inequality, all the radical inequality in any case, all these things were policy choices that we made and that we can now undo if we choose to. And, hopefully, Americans draw the right lessons from this crisis and [inaudible 00:42:25] force their political leaders to enact a new set of policies that generate a new set of outcomes.

David Goldstein:

Right. And I think it’s really important also, going forward, to redefine what we mean by prosperity, and that is not just raw economic growth or how many dollars you can hoard in your bank account, but economic resiliency. So, going forward, a lot of our policies have to be based on not necessarily preventing an economic downturn from ever happening again, but making us more resilient to the unforeseen events, the black swans, the pandemics that we know will come in the future, and especially with the climate warming, we know there’s going to be greater ecological disasters in the future. So, I don’t know, I hope we learn lessons from this recession because we certainly didn’t seem to learn any from the last one.

Nick Hanauer:

In the next episode of Pitchfork Economics, we get to speak with the noted economist and Nobel Prize winner, Joseph Stiglitz, about his thoughts about the economy and the Coronavirus. Super looking forward to talk to Joe, he’s a remarkable man.

Speaker 5:

Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to subscribe, rate, and review us wherever you get your podcasts. Find us on Twitter and Facebook @CivicAction and Nick Hanauer. Follow our writing on medium @CivicSkunkWorks, and peek behind the podcast scenes on Instagram @PitchforkEconomics. As always, from our team at Civic Ventures, thanks for listening. See you next week.