According to Tomas J Philipson, chairman of the White House Council of Economic Advisers, the economic impact of the coronavirus has taken a heavy toll on low-income workers.
In an exclusive interview with the BBC prior to his reported departure, he said: “There is a kind of unique impact of this shock in that it is very regressive, affecting the low-wage part of the economy. Low-wage workers take a bigger hit. than the highest salary. ”
The virus has derailed any progress the United States was making to raise the living standards of those with low wages, Professor Philipson said in an interview for Coronavirus: The Economic Shock, in which some of the world’s leading economists and business leaders They look at how the economic downturn in almost a hundred years can change the way we live and work.
“We had tremendous success in raising lower wages before the pandemic occurred, so this has had a very regressive effect on the economy,” he argues.
This has political implications for the upcoming November elections, as President Trump enjoys far greater support among non-college-educated voters, often used as a proxy for low and high-wage earners than among those with University degrees.
President Trump enjoys wide support among non-college-educated voters
Professor Philipson also minimizes the chances of a rapid economic recovery. “I’m not saying we’re going to have a V-shaped recovery, in fact, the data shows a kind of gradual response.”
However, it also defends the United States’ response to the pandemic and places some of the responsibility for Covid-19 in the United States at the gates of state governors.
“We were the first country to introduce travel bans from China and were criticized for that. Many state governments led by Democratic governors did not act before the federal government, even though they were free to do so.”
He does not agree that an increase in the economic nationalism of the United States has been detrimental to the world economy. “I think China was justifiably demonized in the sense that we treated them much better by selling things here than they treated us by selling things there. I think the president has done a lot to balance that.”
Professor Niall Ferguson says that the United States and China are now in a cold war.
Niall Ferguson, a history professor at Stanford University, says the virus has seen economic tensions between the world’s two largest economies become more than just a trade dispute. “It seems pretty clear to me that we are now on ‘Cold War Two.’
“It will be different from the ‘Cold War’, especially since the United States and the Soviet Union have never been as economically interdependent as the United States and China have been in the past 20 years.
“It is difficult to think of a better illustration of the disadvantages of globalization than the extreme vulnerability it exposed to a virus that originated in China.” This has, according to him, enormous economic implications for the entire interconnectedness of the world economy, and therefore the size and health of the global economy.
Ursula Burns: companies are allies in the fight against inequality
Globalization is credited with lifting hundreds of millions of people out of poverty, but it has also been blamed for deepening inequality within countries. The virus has functioned as an x-ray in the global economic body and its weaknesses and imbalances revealed throughout economic, gender and ethnic failures.
Ursula Burns was the first African-American woman to be on the board of a Fortune 500 company and now sits on the boards of Nestlé, Uber, and ExxonMobil. She says business is emerging as an unlikely and welcome ally in the fight against inequality that she says the pandemic has exposed.
“Surprisingly, companies are beginning to be at the centre of that conversation. At the centre, because governments around the world are not articulate, responsive, or informed enough to contribute positively to this conversation. So, out of the blue, companies begin to change the discourse in the world “.