Tens of millions of Americans struggle to pay rent as unemployment benefits and eviction moratorium near expiration
As the expiration of the federal moratorium on evictions looms at the end of the year, millions of working class Americans have fallen significantly behind on rent and utility payments.
According to Moody’s Analytics, 12 million renters will owe an average of $5,850 in back rent and utility payments by January 1.
A survey by the Federal Reserve Bank of Philadelphia found that 7.5 million renter households (23.5 percent) that had at least one person working in February of this year have experienced unemployment at some point between March and August. They warn that evictions will increase 50 percent next year as millions struggle to pay back months of rent and utilities at once.
So far, more than 60 million workers have filed for unemployment this year, with 11.1 million currently collecting state benefits.
With these considerable disruptions to the labor market, the International Labor Organization estimates that North American workers have lost 15.3 percent of their work hours. In the United States, two-thirds of this cut in working hours came from job losses, with half of that coming from unemployment.
The Bureau of Labor Statistics recorded 159 million workers in November 2019, with an average hourly wage of $28.3 an hour. The Organization for Economic Cooperation and Development (OECD) estimates that the American working class averages 1,779 hours worked a year per worker.
Using these figures, it can be estimated that American workers worked a total of 282.86 billion hours this year and lost approximately 42.4 billion hours during the pandemic, worth an estimated value of $1.2 trillion, or $10,000 per household.
With such substantial monetary losses for the working class, with the poorest and most disadvantaged certainly bearing the greatest cost, it is no wonder that so many families are struggling to pay their bills and a testament to the failure of the capitalist system to support them.
The Cares Act was signed into law on March 27, providing $300 billion in direct cash payments and $260 billion in supplemental unemployment insurance benefits. The enhanced unemployment benefits lasted for four months, after which rates returned to normal but with a 13-week extension to the maximum number of weeks allowed by each state.
According to data from the Department of Labor, the average weekly unemployment benefits for the second quarter—April, May and June—were just $318, even with the funding for extended benefits.
Four weeks of this sum is not even enough to cover rent alone in many cities. A review by Clever Real Estate found that workers could survive on unemployment insurance in just 12 out of 109 metro areas.
Now, with millions of Americans suffering from the pandemic, the Democrats and Republicans negotiate over pennies, taking turns rejecting deals that do not even come close to alleviating the crisis.
The Republicans, true to form, have offered nothing for housing and utility assistance. The Democrats proposed $50 billion for low-income renters. Ultimately, a $25 billion compromise was reached as part of the $908 billion stimulus package currently being discussed in congress.
Twenty-five billion dollars is a grossly insufficient amount. Mark Zandi, chief economist for Moody’s Analytics, estimates that there will be $70 billion in unpaid debt by January.
The political parties of the ruling class have demonstrated their complete indifference to the plight of the working class.
In 2019, US renters paid $512 billion for housing. With millions out of work and hundreds of billions of dollars in wages lost, it is impossible to expect workers to somehow conjure their debt payments from thin air by January.
To the extent that the US government offers anything, it is only to prop up the profits of the capitalist system, funneling trillions into the stock market and providing millions to big business through the Paycheck Protection Program, while small businesses owners and workers are left with nothing.
Even with the meager assistance that the federal government is offering, it will be extremely difficult for workers to pay off their debts.
Between 2001 and 2018, the median wage of a renter rose just 0.5 percent while median rent rose 13 percent. More than 8 million renter households pay more than half of their income toward rent, affecting 23 million people.
The Census Bureau’s most recent Household Pulse survey found that 83 million adults reported struggling to pay for essentials such as food, housing, transportation and medical care. Now, 66 percent of people receiving unemployment benefits will lose them on December 26 and face eviction at the end of the month.
All evictions must be halted, workers must be given full income support, essential workers must be granted substantial hazard pay and adequate utilities must be provided to all people without charge.
This is what is required to fight the pandemic and ensure that no person is forced from their home. Neither the Republican nor Democratic party can be trusted to provide workers with relief. Only an independent movement of the working class based on a socialist program demanding financial assistance and an end to evictions can save lives and bring the pandemic under control.
The Pandemic Has Benefited One Group Of People: Billionaires
Food prices, waste rise as food insecurity affects tens of millions in the US
The COVID-19 pandemic has caused significant disruption to the food supply chain in the United States. Farmers who lost their markets have been forced to let millions of pounds of food waste even as tens of millions of workers suffer from food insecurity.
In 2019, 35 million Americans suffered from food insecurity. Two-thirds were able to obtain enough food to eat through food assistance programs or altered eating patterns, while one-third suffered from a reduction in food intake.
Researchers from Northwestern University believe that the number of food insecure households has more than doubled this year, affecting 23 percent of all American households. Households with children have seen this rise to 29.5 percent.
This immense food crisis for the working class has been caused by sudden job loss, the refusal of the United States government to provide sufficient financial aid during the pandemic and a significant increase in food prices.
The United States Department of Agriculture (USDA) has reported an average inflation of four percent for food items in 2020, double the 20-year average.
Throughout the year, food prices were incredibly volatile. The consumer price index (CPI) for food rose by 2.7 percent in April alone—the largest one month jump since February 1974—and the cost of groceries rose by 5.6 percent between June and July according to Food Business News.
The cost of dairy products collapsed by 17.4 percent from January to May before soaring back up by 24.5 percent in June. The collapse in price was accompanied by millions of gallons of milk being dumped every day by dairy farmers who could not find markets, all while millions went hungry.
The USDA expects 2020 to close with a price increase for fresh vegetables between two and three percent, while the price increase for meat products will average between seven and eight percent.
The rise in food prices places an incredible burden upon working class families who were already suffering before the pandemic.
The bottom 20 percent on American households spent an average of $4,400 on food in 2019, totaling 36 percent of their income. With the Congressional Research Service finding that more than half of households making less than $75,000 a year experienced some loss of income this year, these price increases in food will have a considerable impact.
However, while prices for consumers rose considerably, the prices that farmers received did not.
The futures prices for important farm products like corn, wheat and livestock have fallen by five to nine percent. In August, the retail price for beef was around five percent higher, while the farm price was twenty percent lower.
USDA chief economist Robert Johansson expects cash receipts for farmers to decline by $31 billion this year compared to predicted figures from before the pandemic.
A significant portion of this loss has been offset by government farm assistance programs that have provided tens of billions of dollars to farms hurt by the pandemic. In total, government farm assistance payments amounted to $46.5 billion for fiscal year 2020, 52 percent more than in 2019.
This funding could help save many US farmers from financial ruin, but which farms received this money is a different matter.
Little information is available about who received how much of the funding, but data on farm income provides an insight into how wealthy farmers may have benefited the most from these programs.
The average net cash income of farms grossing over $1 million dollars in sales—3.9 percent of all farms—is expected to be $858,000 in 2020, a 21 percent increase from the previous year and a 19 percent increase over the USDA’s forecasts from February 2020.
Increases in retail prices cannot explain this phenomenon alone, especially considering the overall loss in expected income that has occurred.
Meanwhile, 80 percent of farms sell under $100,000 worth of products and are expected to average just $8,000 in income this year. This is an increase from the prediction in February that small farmers would lose $2,600, but it is clear that large farms benefited the most.
The volatile and unpredictable economic situation that farmers have faced has also resulted in the loss or destruction of millions of pounds of food throughout the pandemic.
In May and June, the Dairy Farmers of America was reporting that farmers were dumping 14 million liters of milk every day as demand for milk products imploded.
After meat processing plants temporarily slowed production, farmers with nowhere to sell livestock euthanized hundreds of thousands of pigs.
The Washington Potato Commission estimates $1 billion in losses for Washington State’s gross domestic product. Farmers lost $29 million from the 2019 harvest and the lack of demand going into the 2020 pandemic.
As a result, farmers cut production for 2020 by 13 percent, or 729,120 tons, with the potential to see farmers lose a further $300 million.
A study on agricultural production losses during the pandemic in the United States published this October by William Ridley and Stephen Devadoss found extensive financial losses in vegetable and fruit production.
They estimate upwards of $48 million dollars in total losses this year for major produce such as apples ($5 million), lettuce ($16 million) and grapes ($4.5 million). While these losses are measured in dollar value, they are related to disruptions in the labor force and the ability to harvest and sell agricultural products.
The total amount of food lost during the year is unknown, but these figures provide an insight into the scale at which the food supply chain in the United States has been disrupted and the immense losses that American farmers and workers have suffered as result of the ruling elite’s criminal response to the pandemic.
Consumer Credit Unexpectedly Hits the Skids As Pandemic Surges
The pace of U.S. consumer borrowing fell steeply in October, reflecting a steep drop-off in the use of credit cards as the pandemic and efforts to stem its resurgence cut into consumer spending.
Total credit rose by $7.2 billion in October from the month prior, falling far short of the $17 billion expected by analysts surveyed by Econoday. The figure was just half of the bottom of the range of forecasts.
September’s figure was revised to show a $15 billion expansion, down from the initial estimate of $16.2 billion.
Total consumer credit for the month rose an annualized 2.1 percent after growing at a 4.4 percent pace in September. Consumer credit contracted an annualized 5.6 percent in the second quarter as major parts of the economy were shuttered to fight the virus.
Outstanding credit card debt fell $5.5 billion as retail sales stalled and consumers pulled back from some of the big spending that had gone on over the summer. Revolving credit fell 6.7 percent for the month, from $985.1 billion to $979.6 billion, the seventh decline in eight months.
Drops in revolving credit usage, mostly in the form of credit card spending, can indicate waning consumer confidence. As well, restrictions on restaurants and other venues may be holding back spending and the use of credit cards.
It may be some American households are keeping credit cards tucking in wallets and instead spending down savings accumulated during the year, largely because many ordinary channels of spending—such as dining out, travel, movies, sporting events, and concerts—have been canceled or curtailed.
The revival of lockdowns and government restrictions on a variety of activities are likely to put further pressure on consumer spending and credit use, according to most analysts. The surge of Covid cases and deaths could hold back spending by many Americans wary of becoming infected, particularly among older Americans who ordinarily spend more than they earn and serve as net income contributors to the rest of the economy.
Progress in the labor market has stalled. Jobless claims, a proxy for layoffs, are rising and the Labor Department’s jobs report on Friday revealed the economy generated far less employment growth than expected. The extraordinary government support for the unemployed has run dry, leaving millions of jobless Americans to rely on state jobless benefits that typically pay only half the income earned by workers. That leaves those workers with far less to spend and can even induce employed people to pull back on their spending in order to save to cushion possible future job losses.
Non-revolving debt, which includes auto and school loans, rose by $12.7 billion. Federal government lending increased by $4.5 billion, likely due to student loan lending and student loan forebearance.
The Fed’s measure of consumer credit does not include mortgage debt.
The Pandemic Has Benefited One Group Of People: Billionaires
Restaurants and Bars Slashed Jobs in November
Restaurants and bars are downsizing again.
The sector the Department of Labor describes as “food service and drinking establishments” was one of the hardest hit by the lockdowns in March and April. Even after recovering for the last five month, bars and restaurants now only employ around 10.1 million workers, more than 2 million fewer than it did last October.
Revived lockdowns and curtailed business hours have put a stop to the employment growth. The sector shed 93,000 jobs in November before seasonal adjustments.
A fresh wave of mass layoffs in the industry could be even more economically damaging than the first. Congress has not passed an extension of the Paycheck Protection Program, which encouraged employers to keep workers on the payroll by supplying them with cheap, forgivable loans. And newly jobless workers no longer have access to the super-sized unemployment benefits they did over the spring and summer.
Roughly 3 out of 4 American billionaires have seen a rise in their net worths. Elon Musk alone has tripled his net worth during the pandemic.
ILLUSTRATION: REBECCA ZISSER/HUFFPOST; PHOTOS: GETTY
Other than Netflix, Andrew Cuomo and the virus itself, no one has benefited from the COVID-19 pandemic more than American billionaires.
Over the last six months, roughly 3 out of 4 members of America’s 10-digit-wealth club have seen a rise in their net worths. Sixteen American billionaires are worth at least twice as much now as they were in March. And Jeff Bezos, who was already worth $113 billion at the start of 2020, is heading into the year’s final stretch $73 billion richer.
Michael Bloomberg and Charles Koch are both up by $7 billion, and Mark Zuckerberg has added another $46 billion to his already staggering $54 billion in wealth. Elon Musk found time between COVID truther tweets and CPAP machine donations to take his fortune from $25 billion to $92 billion.
Some billionaires have gotten richer as a direct result of the pandemic. Amazon, for example, was one of the few companies in the United States to expand as consumers locked down at home and avoided brick-and-mortar retail. Facebook, Google, Tesla and Microsoft have also boomed in the past six months, adding to the fortunes of their respective billionaire founders.
See how much Jeff Bezos has made during the pandemic in 3D. On desktop, use your mouse to zoom and rotate the object in 3D; on mobile, place the object in your space, use your fingers to resize and rotate in augmented reality.
Most billionaires, however, have grown their wealth not as business leaders but as investors. One of the ongoing mysteries of the COVID-19 recession is why it has — so far at least — barely touched the stock market. After falling roughly 35% in February, both the Dow Jones and the S&P 500 returned to pre-pandemic levels in just 126 trading days, a turnaround that may be the fastest ever recorded.
Others benefited directly from government relief funds, a significant portion of which went to large companies. Musk is among the billionaires who have increased their wealth by attracting investors who are betting that their companies will come out of the recession stronger than when they went in.
There are also larger forces at play. The pandemic wealth gap is a culmination of America’s decadeslong trend of increasing inequality. Since 1980, taxes on billionaires have fallen 79%. Unions, which help workers negotiate for a larger share of profits, represented roughly 1 in 4 workers in 1979, but now represent only 1 in 10.
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