Raj Chetty hasn’t eaten at a restaurant in months. In fact, he’s barely left his home near Harvard, where he’s an economics professor. The MacArthur genius grant recipient has been getting his haircuts from a stem cell biologist—his wife.
If you want to understand what’s really wrong with the economy, this is a telling symptom: Chetty used to travel widely sharing insights from his work, which mines data to paint a vividly detailed picture of inequality in the U.S. Now he, like millions of other affluent Americans, is at home. That might seem harmless—Chetty and his wife enjoy cooking together and spending time with their 5-year-old daughter—until you confront the effects on the already-precarious livelihoods of the people who fed, clothed, and pampered this professional class.
When Covid-19 hit, Chetty and his team of about 40 researchers and policy specialists dropped everything—including work on inequality in housing, higher education, and longevity—to document the pandemic’s lopsided impact. The result is a data tracker that gives a day-by-day, state-by-state, and even neighborhood-by-neighborhood view of the coronavirus economy. First uploaded in May and frequently expanded since, it relies on nonpublic, proprietary data supplied by some of America’s largest corporations to give a level of detail, in real time, that traditional economic indicators can’t match.
Last month, a couple days after former Vice President Joe Biden selected California Senator Kamala Harris as his running mate, Chetty briefed the pair over video, presenting data that demonstrated lower-income workers were bearing the brunt of the Covid recession. His chart showed that by April, the bottom quarter of wage earners, those making less than $27,000 a year, had lost almost 11 million jobs, more than three times the number lost by the top quarter, which earn more than $60,000 annually.
By late June the gap had widened further, even though many businesses had reopened. In fact, the segment of Americans who are paid best had recovered almost all the jobs lost since the start of the pandemic. “The recession has essentially ended for high-income individuals,” Chetty told Biden and Harris. Meanwhile, the bottom half of American workers represented almost 80% of the jobs still missing.
Even as the better-off watched employment rebound and the stock market surge, the virus’s economic devastation was all around them, in shuttered restaurants, hair salons, and gyms. It was no longer possible to ignore the economic chasms that separated people who used to live and work alongside one another. “That creates this very local feel to the recession,” Chetty says.
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Chetty and his team have been talking about their newest project to any politician who will listen. On video calls with dozens of Democrats and Republicans in Congress, as well as Treasury officials and state and local policymakers, his message has been consistent: Get the virus under control at all costs—a task the U.S. has so far failed at pitifully. No matter how many businesses are allowed to reopen, normal economic life will not resume until their customers feel they’re no longer at risk of contagion. In the meantime, he tells them, target assistance to the people, businesses, and places that need it. There’s no use sending stimulus checks to people making $150,000 a year or cutting their payroll taxes. They have plenty of money; what they lack is places to safely spend it.
