Not Simply a “Natural Disaster”

Part 1 of a new joint series in Labor Notes and Dollars & Sense:
“Coronavirus, Capitalism, and the Workers’ Movement”

By Alejandro Reuss | May/June 2020

This article is from Dollars & Sense: Real World Economics, available at http://www.dollarsandsense.org


This article is from the (forthcoming) May/June 2020 issue.

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How many people or which particular people will fall ill or die during a pandemic are results not only of the characteristics of the infection itself—but also of policies and institutions that are characteristic of that particular society.

The economist and philosopher Amartya Sen, a preeminent scholar on hunger in the modern world, argued that the mainstream understanding of famines—as the result of natural disasters that caused overall food availability to collapse—was fundamentally wrong. Droughts or floods might be natural phenomena, and famines might follow such events, Sen argued, but that did not make the famines themselves natural disasters. Most famines, he noted, did not involve large declines in average (per capita) food availability, relative to non-famine years just before or just after.

The origin of famines was not a decline in the overall amount of food available, or of the average available per person, but particular social groups’ loss of access to food (usually due to a collapse in their incomes). It was well within the powers of governments, Sen argued, to provide affected groups with enough income so they could buy enough food, or to provide access to food in other ways—if they were motivated to do so. If they did not, a famine could ensue, but that famine should be understood fundamentally as having social and political causes.

It would be a mistake, likewise, to see the human toll of the coronavirus pandemic as the inevitable fallout of a natural disaster. The pandemic originated with a highly infectious and deadly virus jumping the “species barrier” to human beings. The human impacts depend, however, not just on the characteristics of the virus or the infection it causes, but also on the particular political and economic arrangements in a given society. In the United States, the impacts of this novel virus lay bare grave failings of economic policy and institutions—indeed, of the capitalist system itself—that are not at all new.

Unequal Access to Health Care

What Difference Does
Free Health Care Make?

Public health officials in Germany argue that the country’s low death toll from the coronavirus, compared to other countries, is in part due to the availability of testing and care. People received testing early. Those who tested positive for the virus were quarantined. Their close contacts received testing as well. People who needed in-hospital treatment received it early, and so were less likely to die. Fewer got to the most severe phase of the illness, so fewer needed respirators and other kinds of limited-capacity treatments. Free testing has certainly played a role in how widespread testing has been, compared to other countries. Public-health experts in Germany, however, have also noted how free care in general plays a role in promoting testing during an epidemic. The New York Times quotes Professor Hendrik Streeck, an epidemiologist at the University of Bonn: “A young person with no health insurance and an itchy throat is unlikely to go to the doctor and therefore risks infecting more people.”

If access to medical care is determined by personal ability to pay or access to insurance—and such access is not universal—it is likely that some people who need care urgently will go without, even as people in less urgent need do receive attention. For example, as soon as the coronavirus epidemic erupted, reports emerged of the wealthy and influential getting tested for the virus while others could not. In the United States, nearly 28 million people (over 10% of the nonelderly population) do not have health insurance. About a third of those who do have insurance still report that they have problems paying out-of-pocket costs, sometimes forgoing needed care or medication. People may delay or forgo treatment when faced with out-of-pocket costs, and barriers to treatment can result in a greater overall spread of an infectious disease. People with mild initial symptoms may not seek medical attention, not get tested, and unwittingly spread the infection to others. They may also suffer worse health effects themselves, from lack of timely attention. Those who do get treatment, meanwhile, could face dire economic consequences. A recent report from the nonprofit organization FAIR Health estimated that, in the United States, the average total bill for an uninsured patient requiring a six-day hospital stay due to a coronavirus infection would top $70,000.

Employers’ Power Over Workers

As the crisis has unfolded, media coverage has included cases of employers requiring workers to continue coming in to work. The video game retailer GameStop, for example, came under fire for keeping stores open even after shutdown orders for nonessential businesses. The company’s management claimed it was entitled to remain open because it was “essential retail” that sold items people needed to work from home. Employees and others saw this, instead, as the company profiting from the surging demand for gaming products, at the risk of workers’ health. (GameStop relented, in the face of worker and public outcry, in late March.) Workers at “essential” businesses that are remaining open, meanwhile, have protested that they are required to work under unsafe conditions. Workers at Amazon, Whole Foods, and Instacart, for example, have engaged in walkouts or other forms of collective action around the lack of adequate safety equipment or practices.

Mapping Social Inequality

The ways that people have adapted to the coronavirus pandemic—in particular, who can adapt easily and who cannot—traces out a map of social inequality in the United States. Using cell phone data, New York Times reporters tracked the degrees to which different people reduced their public movements as the crisis unfolded. They used differences in average neighborhood incomes to determine how the patterns differed between high-income and low-income groups. While people at all income levels have dramatically decreased their movements, the data showed that high-income people generally began staying at home earlier than low-income people, and that low-income people’s degree of public movement has persistently stayed above that for high-income people. The only times that the two come really close is—you guessed it—on Saturdays and Sundays.

No matter how you slice it, the ability to work remotely, as opposed to having to work on location, is greater the higher the person is on the social pyramid. We can see that in the data by income. A recent Bureau of Labor Statistics report shows similar patterns along occupational, educational, and racial/ethnic lines. (Reporters at the Washington Post deserve credit for going back and reporting on the findings, in light of the current crisis.) People with at least a college degree were 13 times as likely to say they could work remotely than people without a high school diploma. People in “management, business, and financial” occupations were six times as likely to say so than workers in production, construction, maintenance, transportation, or retail. White people were about one-and-a-half to two times as likely as African American or Latinx individuals.

Employers cannot, of course, literally force workers to come to work. Workers have the formal right to refuse, but the formal right to do something is very different from the substantive power to do it. In the United States, people in the bottom half of the income distribution get, on average, 90-95% of their income from work; people in the next two-fifths above them, an average of 80-85%. The dependence on wage employment is even greater in this country than in other capitalist countries, since the social welfare state is less extensive. Most U.S. workers, for example, get their health insurance through their employer: About 60% of those with health insurance have an employment-based plan; excluding those covered by Medicare, about 75% of the insured have an employment-based plan. (In many other high-income countries, workers get health coverage through a public insurance system or directly get care through a public health service.) For most U.S. workers, losing their job means losing their income and their health coverage. That creates an enormous power differential between most workers and their employers. People may go to work, at their employer’s insistence, even if that puts them and their close contacts at risk—just because they cannot afford to lose their jobs.

The Scourge of Unemployment

The coronavirus has detonated a severe economic crisis in the United States and other affected countries. The number of initial unemployment insurance claims in the United States, for the week ending on March 21, topped 3.3 million—more than four times the highest level previously recorded (based on a consistent data series going back over half a century). For the week ending on March 28, over 6.8 million claims were filed. For the week ending April 4, another 6.6. million. The latest Bureau of Labor Statistics jobs report only shows a modest increase in the “headline” unemployment rate, to 4.5%, probably because the data were collected early last month, before the majority of the bloodletting. Economist Justin Wolfers, however, estimated after the first of these reports that the actual unemployment rate was more than 13%, the highest point since the Great Depression. Others have since revised that figure, using the same procedure, to as high as 17%.

The most direct and obvious effect of job loss is the worker’s loss of income and employer-provided benefits. Social scientists, however, have also found large negative psychological effects, resulting from social isolation, loss of identity and self-worth, etc. The overall negative health effects of unemployment—both psychological and physical—are enormous. Researchers at Drexel University and the University of Michigan found that the increase in mortality risk from being unemployed is about 70%. By comparison, the increase in mortality risk from one additional year of age is about 7%. So being unemployed has about the same effect as aging a person 10 years.

In other words, many people will die during the current crisis, not because they have contracted a deadly infection, but because they have lost their jobs.

In short, while the strain of the coronavirus that causes COVID-19 is new, the underlying social conditions that shape COVID-19’s impacts are not at all new. The lack of a universal social guarantee to the most basic goods. The enormous power differential between employers and workers. The reliance on wage employment and vulnerability to unemployment. These are everyday scourges of life in capitalist America. They did not begin with the coronavirus, and they did not begin being problems because of the coronavirus. The current crisis has just illuminated these realities in an especially stark way.

is an economist and historian and former co-editor of Dollars & Sense.

Amartya Sen, Poverty and Famines: An Essay on Entitlement and Deprivation (Oxford University Press, 1981); Graham Readfearn, “How did coronavirus start and where did it come from? Was it really Wuhan's animal market?” The Guardian, April 8, 2020; Jennifer Schaffer, “Why are the rich and famous getting coronavirus tests while we aren’t?” The Guardian, March 21, 2020; Adam Harris, “It Pays to Be Rich During a Pandemic,” The Atlantic, March 15, 2020; Jennifer Tolbert, Kendal Orgera, Natalie Singer, and Anthony Damico, “Key Facts about the Uninsured Population,” Kaiser Family Foundation, December 13, 2019; Ashley Kirzinger, Cailey Muñana, Bryan Wu, and Mollyann Brodie, “Data Note: Americans’ Challenges with Health Care Costs, Kaiser Family Foundation, Jun 11, 2019 (kff.org); Katrin Bennhold, “A German Exception: Why the Country’s Coronavirus Death Rate Is Low,” New York Times, April 4, 2020; Hillary Hoffower, "If you're hospitalized with COVID-19 and don't have insurance ...," Business Insider, Mar 27, 2020; “COVID-19: The Projected Economic Impact of the COVID-19 Pandemic on the US Healthcare System,” A FAIR Health Brief, March 25, 2020 (fairhealth.org); Jason Schreier, “GameStop: We Can Stay Open During Lockdowns Because We’re ‘Essential Retai’,” Kotaku, March 19, 2020 (kotaku.com); Paul Tassi, “What GameStop Is Doing In The Coronavirus Pandemic Is Inexcusable,” Forbes, March 20, 2020; Shannon Liao, “GameStop closes all stores,” CNN Business, March 22, 2020; Noam Schreiber and Kate Conger, “Strikes at Instacart and Amazon Over Coronavirus Health Concerns,” New York Times, March 30, 2020; Thomas Piketty, Emmanuel Saez, Gabriel Zucman, Distributional National Accounts Data, Appendix tables II: distributional series (gabriel-zucman.eu/usdina/); Edward R. Berchick, Jessica C. Barnett, and Rachel D. Upton, "Health Insurance Coverage in the United States: 2018," Current Population Reports, U.S. Census Bureau, Issued November 2019; Unemployment Insurance Weekly Claims, News Release, United States Department of Labor, Employment & Training Administration, April 2, 2020 and April 9, 2020 (oui.doleta.gov); Justin Wolfers, “The Unemployment Rate is Probably Around 13 Percent,” New York Times, April 3, 2020; Neil Paine, More Than 16 Million Americans Have Lost Their Jobs In The Past Three Weeks, FiveThirtyEight, April 9, 2020 (fivethirtyeight.com); Alex McKechnie, “How Is It Possible that Joblessness Could Kill You, But Recessions Could Be Good For Your Health?” DrexelNOW, July 24, 2014 (drexel.edu/now/; José A. Tapia Granados, James S. House, Edward L. Ionides, Sarah Burgard, and Robert S. Schoeni, “Individual Joblessness, Contextual Unemployment, and Mortality Risk,” American Journal of Epidemiology, July 3, 2014; Katrin Bennhold, “A German Exception: Why the Country’s Coronavirus Death Rate Is Low,” New York Times, April 4, 2020; Jennifer Valentino-DeVries, Denise Lu, and Gabriel J.X. Dance, “Location Data Says It All: Staying at Home During Coronavirus is a Luxury,” New York Times, April 4, 2020; Christian Davenport, Aaron Gregg and Craig Timberg, “Working from home reveals another fault line in America’s racial and educational divide,” Washington Post, March 22, 2020.

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