Volunteers distribute food at a drive-thru food bank event at the South Bay Pentecostal Church in Chula Vista, California in May.
▲ The pandemic upended lives
▲ Chula Vista, California
Curbside pickup outside a Gucci store on Rodeo Drive in Beverly Hills, California in May. Photographer: Patrick T. Fallon/Bloomberg
▲ The pain wasn’t equally distributed
▲ Beverly Hills, California

The pandemic upended lives

▲ Chula Vista, California

And ravaged the U.S. economy

▲ Portland, Oregon

The pain wasn’t equally distributed

▲ Beverly Hills, California

Sound is off

A Nation’s Economy Divided: Breadlines vs. Bread Makers

An economy is its people. Alongside the 19 million infected and more than 330,000 killed in the coronavirus pandemic in the U.S., there are millions more whose lives have been upended by the economic collapse that has come with it.

Hit the streets of Cleveland’s east side, log onto a Facebook group that helps the unemployed secure benefits, or pick up the phone to talk to members of the rural working class newly dependent on food aid, and you encounter an economy emerging from a crisis more unequal than it was. 

People once in the middle class are struggling to secure food, shelter and a decent income. At the same time, others are enjoying rising home prices, new models of work and the pleasures of baking bread. This is America in 2020—here are some faces and facts that tell the story.

Knocked Off Course

Donna Swangler in Bensalem, Pennsylvania.
▲ Donna Swangler in Bensalem, Pennsylvania.
Photographer: Jessica Kourkounis/Bloomberg

Donna Swangler is used to extending help to others during the holidays. This year that means administering a Facebook group with more than 19,000 self-employed contractors and gig workers, many of them trying to navigate the unemployment system. It also means she’s got her own worries about making rent and paying bills. 

Swangler began the year thinking she, husband Bryan and their three kids, ages 7 to 16, would finally be able to build up their savings and solidify their place in the American middle class. She’s ending it at home in Bensalem, Pennsylvania, waiting to find out when her unemployment benefits will start landing again and how much the family will get in food stamps. 

“There’s no savings left,” says Swangler, 42, an independent contractor whose work scanning documents from home came to an end when people stopped going to offices. “It all depends on what my husband brings in. If we can’t make rent and food, we’re going to start falling behind. I’m scared about what’s going to happen. We have nowhere to go if we can’t live here.”

Employment Near Lowest Level Since 1983

Note: Data shows share of the civilian, non-institutional population age 16 and over with a job.

Source: U.S. Bureau of Labor Statistics

In early December, as Covid-19 cases surged in Bucks County and her husband’s home-repair work dried up, she hit the 39-week limit for the $195 unemployment checks that have been keeping her afloat. A new $900 billion congressional rescue plan that President Trump held hostage over Christmas added an extra $300 a week. But even with Trump finally signing the bill the money was still weeks away from reaching Swangler. An application for food stamps was hung up because uncertainty about her husband’s income made it difficult to calculate how much the family would get. A week before Christmas the Swanglers’ caseworker still didn’t know how much to approve them for because of the debate dragging on in Congress. 

Swangler’s woes reflect not just how the U.S. recovery has stalled but also how dependent it has become on government rescue. They point to how many families and businesses are encountering a new world of diminished expectations.  

Donna Swangler family
Photographer: Jessica Kourkounis/Bloomberg

Even a better-than-expected pace of recovery in the third quarter failed to make up the ground lost to the economic collapse in 2020. The U.S. economy will end 2020 roughly 5% smaller than it would have been without a pandemic. The 57% of the population employed in November was the lowest level since May 1983, if you don’t count the even worse months before it this year. 

The question hanging over the U.S. economy at the end of 2020 is how long it will take to get back—not just to where it started, but on the same path it was on before the crisis. 

U.S. Household Net Worth

Note: Includes net worth of U.S. nonprofits, which accounted for less than 7% of the total in 2019.

Source: U.S. Federal Reserve Bank

Swangler is hopeful she’ll be working again. But she was also looking to return to full-time work as a medical assistant now that her youngest child is in first grade. A year ago she was polishing her resume. Now that’s a distant dream as her kids are laboring through mostly virtual school days that she has to supervise. “I don’t think it’s a possibility in anything like the near future,” Swangler says. 

Meanwhile, a recovery in financial markets has seen the aggregate net worth of Americans rise as the wealthy have become wealthier still. And many in the middle class who escaped the economic impact of the pandemic are embracing new ways of working as their own household wealth has grown.

A Housing Crisis Still to Come

Denise Cole in Cleveland, Ohio.
▲ Denise Cole in Cleveland, Ohio.
Photographer: Da'Shaunae Marisa/Bloomberg

For millions of Americans, the worst may be yet to come. A patchwork of unemployment benefits, eviction moratoriums, rental assistance and mortgage forbearance programs has helped many make ends meet. Some of those benefits are being extended. The rescue plan eventually signed by Trump extended a moratorium on evictions and authorized more help for renters on top of new one-time stimulus checks. But housing activists are still worried that a wave of evictions is building.

Likelihood of Eviction in the Next Two Months

Source: U.S. Census Bureau Household Pulse Survey, November 25 – December 7, 2020.

Denise Cole’s next date with the Cleveland Housing Court is Jan. 12. By the end of that month, she and her four children, ages 2 to 20, may be chased out of their home. She faces eviction even though she was able in December, with the help of several programs, to pay down more than $7,000 she owed in back rent that piled up after losing her job as a housekeeper at a Hyatt Place hotel in March.

Unemployment benefits helped, especially when Cole was receiving an extra $600-a-week federal boost on top of the $189 in state benefits. A $1,200 stimulus check she received went mostly to pay the $750 she owed for her March rent. But when those supplemental benefits disappeared, so did her hopes of catching up. 

Cole isn’t alone. According to the U.S. Census, one in six renters in the country is behind on payments with almost half of those—more than 4 million people—saying they are likely to be forced to move out of their homes in the next two months. 

Denise Cole family
Photographer: Da'Shaunae Marisa/Bloomberg

Cole says she wouldn’t mind leaving the aging house on Cleveland’s east side that her family is in now. The roof leaks, and the furnace is unreliable. A raccoon lives in the basement. There are cockroaches to deal with as well. But the blot of an eviction case on her credit score and a lack of options means that won’t be easy, even after starting a new job in December at a discount store. 

Rise in Typical-Home Value in Wealthiest U.S. Cities

Note: Typical value is for homes in the 35th to 65th percentile range; for Scarsdale, it's based on prices in ZIP code 10583.

Source: Zillow Home Value Index, Bloomberg Richest Places Index

Cole is ending the year a long way from where she planned to be at the beginning. She had hoped her hotel housekeeping job would finally bring stability and a paper trail that one day might translate into a home of her own. “I was trying to move out and be a homeowner for the first time,” Cole says. “Things were looking up for the first time.”

Cole has good reason to want to be a homeowner. Surging home prices and the ability to refinance mortgages at historic low rates mean many suburban homeowners have seen their net worth surge this year. 

Not Coming Back Soon

Craig Barnette in Jacksonville, Florida.
▲ Craig Barnette in Jacksonville, Florida.
Photographer: Malcolm Jackson/Bloomberg

The wealth disparity that has widened in 2020 is not just about the stock market or home prices. Those hit hardest by the crisis have seen incomes fall and savings depleted even as aggregate data offer a rosier view of the economy. That’s true even in places like Florida and the Sunbelt that have chosen to prioritize keeping their economies open.

Craig Barnette is back at work as a professional drummer based in Jacksonville, Florida. But he is digging out of a hole. In a typical year, he and the Southern roots band he plays with, JJ Grey & Mofro, would do 100 or more concerts a year. This year they’ve done fewer than 20, and next year hardly looks normal.

Change in Weekly Earnings of Workers in Bottom Third of Family Income

Note: Change is year over year.

Source: Economist Ernie Tedeschi's analysis of U.S. Census Bureau's Current Population Survey

U.S. Census survey data from November show that employment income has fallen this year for about half of those living in households earning less than $100,000 a year. For those earning more than $200,000 a year, the figure is less than one-third. Almost 40% of those earning less than $50,000 a year said they expect their income to drop in the coming month, the survey shows.

Evercore ISI economist Ernie Tedeschi says that’s a reflection of who has carried the burden of the crisis. In November, the bottom third of American households by income was earning 17% less than it did a year ago if you don’t count emergency government assistance such as unemployment benefits. The reason: lost jobs or reduced hours.

Craig Barnette and band
Photographer: Malcolm Jackson/Bloomberg

Barnette, 45, recovered from Covid-19 after being hospitalized over the summer. While his health insurance covered all but $2,500 of the more than $75,000 bill for his treatment, he will be dealing with the economic cost for some time. He and his wife earned roughly $55,000 before tax in 2019. This year their income fell by almost half, even with the few months of unemployment benefits he received and a $21,000 federal emergency loan he was able to secure that he will eventually have to repay. Signing up for a mortgage forbearance program helped his family survive. But he will have to start paying his mortgage again next year, while he expects his income to be lower than it was in 2019 as live music venues reopen slowly.

Total Wealth of the Richest 100 People in the U.S.

Note: Data is based on totals from Dec. 17, 2019, to Dec. 17, 2020.

Source: Bloomberg

“The optimistic side of me says things will get back to normal, possibly by the end of 2021,” Barnette says. “But more realistically it’s going to be 2022.”’

Meanwhile, America’s wealthiest have seen their fortunes soar. The 100 richest people in the U.S. added about $600 billion to their wealth in 2020, enough to send a $2,800 check to every adult in the country. One, Tesla Inc.’s Elon Musk, ended 2020 six times richer than at the beginning of the year.

Breadlines Aren’t Going Away

Jaime Torres in Lancaster, Pennsylvania.
▲ Jaime Torres in Lancaster, Pennsylvania.
Photographer: Jessica Kourkounis/Bloomberg

Some of the most haunting images of the economic crisis have been of America’s new breadlines: cars lined up for miles waiting for free food. 

Before the pandemic, about 1 in 10 people living in households that had taken a hit to income reported not always having enough to eat, according to U.S. Census data. This year that ratio has grown to 1 in 5, despite all the help available.

Food Insecurity Is Growing

Note: The people in this story live in these counties.

Source: Feeding America

The crisis has endured long enough that advocacy group Feeding America estimates more than 50 million Americans will end the year food insecure and dependent on help from the government or local charities.

In Lancaster, Pennsylvania, where her once thriving business doing facials, lash extensions and body sculpting has collapsed since a state-mandated lockdown in March, Jaime Torres spent the autumn learning how to navigate a new reality dependent on donations from food pantries. Which means lots of cans of beans, spaghetti sauce and pasta and not many fresh vegetables. And lots of complicated schedules and rules. “It’s all different, and you can’t go to the same place twice,” she says. “You have to literally jump around and go to a different one every time.” 

Jamie Torres
Photographer: Jessica Kourkounis/Bloomberg

A business that last year netted her about $75,000 has all but disappeared. The few clients she treats now in the shed that is her studio are mostly nurses who can’t wear makeup to work and want “their brows and their lashes looking nice,” Torres says. “That’s all they can show, you know, because they have a mask on all day.”

For Torres, 2020 has been “the year of financial ruin, the year my life was stolen from me.” She had a hysterectomy a week before Christmas that she worries will leave her with tens of thousands of dollars in new debt. On the way home from the hospital, she learned she’d lost a second grandfather to Covid-19. Now she’s moving beyond short-term unemployment benefits, waiting to be approved for welfare. Her application for food stamps was successful, and she has already qualified for utility assistance. 

Value of U.S. In-Store Flour Sales

Note: Data are for the trailing four-week period.

Source: Nielsen

Torres’s new life stands in stark contrast to those in households that have survived the crisis in better shape. Sales of bread flour and yeast to newly minted home bakers have surged this year. So too have purchases of home meal kits and gourmet hampers. 

Online retailers like Goldbelly, backed by restaurateur Danny Meyer’s private equity arm, emerged as an important lifeline for ailing restaurants around the country. That’s because those who avoided major economic harm were spending lavishly on everything from Maine oysters to Kansas City barbecue. Or baking bread. —With Phil Kuntz 

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