In conversation with Trevon Logan

Overview

“Equitable Growth in Conversation” is a recurring series where we talk with economists and other academics to help us better understand whether and how economic inequality affects economic growth and stability.

In this installment, Equitable Growth Senior Policy Advisor Liz Hipple talks with Trevon Logan, the Hazel C. Youngberg Trustees Distinguished Professor of economics at The Ohio State University and a research associate at the National Bureau of Economic Research. Logan specializes in economic history, economic demography, and applied microeconomics. He also does work that intersects with health economics, applied econometrics, applied microeconomics, and sociology. His current work investigates the intersection of intergenerational economic mobility, race, and segregation.

In an in-depth conversation about his research and its implications for public policymaking, Hipple, who leads Equitable Growth’s work on economic mobility, and Logan discuss:

  • The reasons for the disparate health impacts of the coronavirus among black Americans
  • The historical legacies of structural inequalities in the United States
  • The economic inequalities faced by African Americans in the coronavirus recession
  • Policy recommendations to deal with the immediacy of the coronavirus recession
  • Policy recommendations to deal with historical structural inequalities to power a more equitable economic recovery
  • The historical legacy of intergenerational mobility, race, and segregation

The reasons for the disparate health impacts of the coronavirus among black Americans

Liz Hipple: Trevon, I want to start off by asking you about the attention to the reality that nonwhite communities, especially and particularly black American communities, are disproportionately getting infected by the new coronavirus and dying from COVID-19 [the disease spread by the new coronavirus]. Could you start by giving readers an overview of these trends and some reasons why you think we’re seeing these disparate health impacts of coronavirus and COVID-19?

Trevon Logan: I think there are two trends that both have a high degree of racial disproportionality. The first is that African Americans as a percent of those infected with the coronavirus and a percent of those who, conditional on being infected, have died from COVID-19 are both highly disproportionate. And so just in the basic racial accounting, we see a high rate of disproportionality by race. Another layer to that, which I think needs to be discussed more, is that we have several explosions and hot spots of COVID-19 among the incarcerated, who are also disproportionately African American. So, in both of those dimensions, we’re seeing racial disproportionality in contracting and dying from COVID-19.

There are obviously two different explanations for both of those trends. Starting with those who are incarcerated, if you take the examples from Ohio’s prisons, in which more than three-quarters of some of these facilities have inmates who are infected, it is because these prisons are far over capacity. Some of them are literally housing twice as many incarcerated individuals as they are approved to do. And in those tight living quarters, you’re going to have high rates of spread of the coronavirus.

When you think about the population that is not institutionalized, we have a number of people, who are disproportionately African American, who are still on the front lines, unable to work from home. They’re essential employees in their organizations. And when they are exposed to the coronavirus at work, they then bring that virus and that exposure home to their other relatives and those who they are living with. So, those two factors are both driving this racial disproportionality in COVID-19.

The historical legacies of structural inequalities in the United States

Hipple: What do you think some of the causes of those underlying reasons are? In particular, I’m interested if you can tell us a little bit about what you think it says about structural inequalities in the United States. In particular, as an economic historian, I know you look at how trends in the past continue to affect us today, so do you see a connection between historical racial inequalities and policies in the past and the fact that now, COVID-19 is so disproportionately negatively impacting African American communities?

Logan: Yes. There are certainly some long-run historical factors that play a part in this. If you think about where African Americans are living, what types of occupations they are disproportionately employed in, and their living standards, in terms of factors that would relate to the severity of a COVID-19 infection, all of these are actually long-run processes. So, why African Americans are disproportionately represented in these essential and low-paying occupations that are exposing them to the coronavirus is a long-term outcome of racial discrimination and lack of wealth in the African American community.

Then, you factor on top of that, why is it that African Americans have such a high death rate? It is because many of the underlying conditions that make one more susceptible to the disease and the severity of the disease should they become infected are related to factors such as environmental racism, housing segregation, and substandard housing, which, once again, are all long-term historical factors. Then, if you take in the incarcerated population, you have a long-term historical factor of mass incarceration of African Americans and in particular, African American men.

All of these dimensions that are leading to this racial disproportionality in infections and deaths today are simply highlighting historical, long-run processes that are structural in terms of disadvantaging the African American community.

The economic inequalities faced by African Americans in the coronavirus recession

Hipple: What are some of the economic consequences you think we’re seeing and are going to see as a result of the recession that the coronavirus has triggered? And, again, do you expect to see disparities in who is bearing that burden most? And if so, why?

Logan: Yes, I think you’ll see this when you’re thinking about putting people back to work. And as we move back to work, this will disproportionally impact African Americans who, again, are less able to work from home and will be compelled to work as some states open back up and are saying that employees who don’t show up have voluntarily quit and will not be eligible for unemployment. This will literally force, disproportionately, African Americans to risk high rates of exposure to the coronavirus.

Then, you consider African American’s higher rates of unemployment. The unemployment rate in the African American community traditionally runs twice the rate of the U.S. population overall, and if we’re experiencing historical unemployment numbers in the general population, we also have reached that in the African American community, to be sure.

Then, we want to think about other sort of aspects, long-term aspects of wealth building and other sorts of aspects that I think will be exacerbated during this recession. I expect to see further reductions in African American wealth and income, which will also highlight those racial inequalities in those economic statistics.

Policy recommendations to deal with the immediacy of the coronavirus recession

Hipple: Given the reality of how disparate both the health and the economic impacts of the coronavirus are, what are some recommendations you would have for policymakers to address these issues? In particular, what are policies they need to be thinking of that they might not be thinking of if they’re unaware of these disparities and the historical inequalities that they’re stemming from?

Logan: Well, one those policies has to be an aggressive move to do testing. Doing so is going to prevent the spread of this virus from getting worse and is going to have a positive impact on African Americans because they’re disproportionally affected. We must have aggressive testing. We must have personal protective equipment for those essential employees who are on the front lines. We must continue to enforce social distancing to prevent the spread of the disease, taking into account that many people are not able to do so in their personal spaces. And we must protect the families of workers as we’ve seen these outbreaks at manufacturing plants and at food processing plants. This is due to community spread that takes place in workplaces that become hot spots. We then have to ensure that workers are safe in their environment when they do return to work. All of these things are not necessarily racially specific, but they would help because African Americans are disproportionally impacted by policies in these areas.

Hipple: On the economic side, what are some of the economic policies that you think policymakers will need to consider? For example, they have already passed a couple of large stabilization packages aimed at boosting Unemployment Insurance and sending checks directly to Americans. Will this be enough? Will they need to do more? Are there other economic policies that they should consider to both try to stabilize the economy and then, looking long term, trying to bring it back online?

Logan: I think one of the first things you want to deal with and extend would be unemployment benefits. Workers impacted will be impacted for quite some time. The recovery from this recession will be slow and uneven. And a slow and uneven move back from and rebound from what we’re experiencing, say, in early March is going to have a disproportionate impact on African Americans. Unemployment benefit extensions and enhancement would greatly help, particularly to protect consumption.

I also would think that we would want moratoriums on some types of payments, such as mortgages and rent for those who have been impacted negatively by the coronavirus. And these moratoriums have to then extend those payments to the end of, say, a mortgage instead of having a lump sum payment after a short reprieve from these sorts of payments. Those are two really solid policies right there that would actually help.

Another policy that they should be extending is the small business lending and Paycheck Protection Program because this recession has negatively impacted a lot of the African American entrepreneurs and their very small businesses that have had difficulty accessing the availability of capital in this federal lending program. And this lending program has to be extended. We need every small business that can possibly hope to survive, say, a six-month decline in demand to be able to. And so, we need to have those lending facilities operational and actually get those payments to those businesses much faster than we currently have.

Another aspect that needs to be extended or thought about would be deferment on other sorts of debt, for example, student loan payments, which, once again, would help people to preserve their consumption and living standards as well as we could hope for in this economic collapse.

Finally, we also need support for state and local governments. One of the things that is happening is their revenues have declined considerably right now. And many of these states are providing critical social services, and they will have to make cuts in those social services right at a time when the need for those social services is probably at an all-time high. So, we have to provide fiscal support to state and local governments so that they can provide the necessary services to the public.

Policy recommendations to deal with historical structural inequalities to power a more equitable economic recovery

Hipple: Are there bigger picture, more systemic policies that you would want policymakers to consider beyond just the immediate moment to set the economy up for better, more successful, and hopefully more equitable performance in the future? And I’d also like to return to the point you made at the beginning of our conversation about how one population that we’re really seeing being impacted by coronavirus is the incarcerated population. What does that tell us about policy reforms we might need to consider in our incarceration policy?

Logan: Yes, I think that there are a number of different policies that we have to think about in terms of the health effects of having all of these prisoners in these overcrowded facilities. We need to acknowledge this is bad for us. We have to do something with criminal justice reform.

The second set of policy recommendations for long-term impact is intensive investment in job training and job retooling, alongside carefully monitoring the economy for monopsony power, which is having disturbing effects on the labor market. We have to have a more aggressive government response to the consolidation that is occurring in the corporate sector. Another factor here is corporate regulation more generally, in terms of stock buybacks and other sorts of regulation, particularly for these businesses that have taken government support over the past several weeks. We need to have some stipulations on that government support.

We see, for example, Congress enacting some teeth on stock buybacks and other sorts of things, but as these companies come to the public for support, we need to make sure that they are keeping employees on their payrolls and fulfilling their promises until those debts are paid off. We have to have active monitoring of the fiscal support that we have provided and the revenue support that we have provided to these private businesses. Those things have to be continually monitored well after the immediate crisis has passed.

The historical legacy of intergenerational mobility, race, and segregation

Hipple: Shifting gears now, away from the coronavirus to some of the other research that you’ve done. I want to take the opportunity to ask you more about the work you’ve done related to your grant from Equitable Growth on intergenerational mobility, race, and segregation. Could you tell readers a little bit about that research? And what are some of the key findings you’ve come across in it? And do those finding tell us anything about the role of policy in shaping people’s economic outcomes?

Logan: What we found in our work on intergenerational mobility and segregation, or lack of access to opportunities, is that the relationship with intergenerational inequality is itself a function of some long-term consequences and some long-term historical processes relating to segregation and relating to public investment in education, both of which have impacts for intergenerational mobility.

When we think about this process more generally, and to tie it back into, say, COVID-19 as the economy begins to recover, what we’re going to find is that places that have continual hot spots and that continue to be problems will likely be places that have structural issues that are related to intergenerational mobility, the segregation of opportunity, and lower investment in public goods.

All of these factors that lead these places to be unequal are also places that are hot spots for COVID-19 infection, so that when the next pandemic comes, when the next economic bit of turbulence hits the economy, these places will be negatively impacted again. And it is these places that have structural, long-term issues with race and with opportunity and with investment in public infrastructure and in human capital formation.

Hipple: Why is there this lack of investment in human capital in some places and what are the consequences for that over the long term? As you said, we’ll see in the future there’s going to be this overlap between pandemic hot spots and places with these structural inequalities. Can you say a little bit more about why you expect to see that overlap and what are those factors driving that really?

Logan: I think some of the factors will be racial animus. There’s some very interesting work that looks at the lack of investment in public goods in more heterogeneous places. We see lower investment in public goods when there are more different types of people to share in those public goods. We also see an increase in policing in places that received more African American migrants in the Great Migration.

These are examples of active policy responses that resulted in lower investment in what I call pro-social public goods, such as education, and then in higher levels of investment in what I call anti-social public goods, such as policing. So, these are both long-term factors that lead to many of the things, such as mass incarceration and environmental racism, which actually are exacerbated by COVID-19.

Hipple: That makes a lot of sense and is a depressing reminder of how all of these things are connected and how policy decisions in the past continue to have long-term consequences today. Thank you so much again for taking the time to have this conversation with me. I really appreciate it.

Logan: Thank you.

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