Recession by any other name still hits Blacks hardest

MGN

While two consecutive quarters of economic contraction have historically been identified as a recession, the White House last week rejected the term in discussing data showing that is exactly what occurred in the first six months of this year, citing relatively low unemployment figures.

But if the Democrats perhaps have one eye on November’s midterm elections, many Americans can attest that a recession by any other name is just as dire.

There is perhaps no more startling evidence of the hard times confronting the nation than the cans of Spam—the iconic canned pork product produced by the Hormel Corp. headquartered in Austin, Minnesota—that a New York City chain of convenience stores is stocking in anti-theft cages to guard against homeless vagrants increasingly desperate for a cheap, easy meal.

According to the New York Post, petty larceny complaints for the New York City police precinct, which includes the Duane Reade store in question, have increased by 52%— to 1,771 through July 24—compared to the same period a year ago.

Across the country in Albuquerque, New Mexico, Benay Blend, a retired university professor, sees evidence of a recession in the disappearance of shopping carts outside his neighborhood Walgreens. “People use them to store their things, and every day it seems like there are more people living out of carts,” Blend, 75, told the MSR in an interview.

The cost of housing in Albuquerque has skyrocketed this year, he said, and he estimates that the numbers of homeless people have tripled since the COVID-19 pandemic began. Mayor Tim Keller announced last week plans to close a highly visible, unsanctioned homeless encampment at Coronado Park, where an estimated 120 vagrants sleep each night.

There have always been issues with homelessness in Albuquerque, Blend said, dating back to the 1980s, reflecting one of the poorer communities in the nation. “But now,” he opined to MSR, “it’s starting to feel like a dystopia.”

An Oakland activist said that he feels that the U.S. is in recession because activists handing out hygiene and survival kits to the homeless return empty-handed now. A year ago, that seldom happened. “There’s more people out [on the streets],” he told MSR in an interview. 

In North Carolina, an independent Black journalist who makes ends meet by selling his plasma to relief agencies said that the numbers of people he sees waiting in line to have their blood drawn has doubled over the past year.

Almost since the advent of the business cycle, economists and laypeople alike have developed unconventional means to gauge the onset of commercial downturns. For example, former Federal Reserve Chairman Alan Greenspan told an NPR reporter in 2008 that a drop-off in the sale of men’s underwear anticipates an oncoming recession because men often put off purchasing new briefs when they are short of cash.

Likewise, an economist at the Wharton Business School, George Taylor, theorized in the 1920s that the hemline of women’s skirts become shorter in a bull market, and longer in a downturn. Remarkably, a 2010 study by researchers at the Erasmus School of Economics in the Netherlands collected monthly data on hemlines between 1921 and 2009 and uncovered some correlations, concluding:

“The main finding is that the urban legend holds true but with a time lag of about three years,” the authors of the report wrote.

Similarly, Estee Lauder Chairman Leonard Lauder proposed a “lipstick index” at the nadir of the 2001 financial crisis, positing that women spend more on cosmetics during lean times to boost their spirits, although makeup sales fell during the downturn triggered by the 2020 COVID-19 lockdowns and subsequent mask-wearing.

The most glaring signs of financial trouble, however, are not nearly as exotic as men’s undergarments or hemlines or lipstick indexes. Suzanne Valbrun, a 43-year-old Haitian American woman living in South Florida, told the MSR in an interview: “I know the U.S. is in recession because I’ve personally spoken to at least eight people within the past two weeks who are dealing with insecure housing situations.

“They’re all working middle-income earners and are finding it difficult to make ends meet. Some are having to consider taking their families to move back into their elderly parents’ homes or with other relatives as a short-term solution,” said Valbrun.

Dating back as far as the nation’s first modern recession in 1874, African Americans have always been the canaries in the coal mine, experiencing job losses and dislocation well before Whites.

By some measures, the Great Depression for Blacks began in 1926, fully three years before its impact was felt by the general population. And Black borrowers were disproportionately saddled with subprime predatory mortgages that were at the core of the Great Recession that began in 2008.

These persistent and longstanding disparities have left Black homeownership rates near historic lows, and Black renters are particularly vulnerable to a housing market made volatile by inflation, rising interest rates, and simple price gouging.

Of the eight people who Valbrun has encountered facing precarious housing situations, one is a friend she’s known since middle school. “She’s a single mom of three young adult kids, and she works at a major hospital here.

“She makes decent money, but due to the changes in the economy and stock market, she’s taken a hit. In addition to that, her rent has gone up by $550.”

Valbrun continued, “Finding a house or apartment to rent right now is unbelievably expensive regardless of location. [My friend] is pretty much at a crossroads and is considering moving in with her sister…who already has two young adult kids living with her. She’s now battling depression based on the constant anxiety and stress.”

Valbrun said she has tried to be a shoulder for her friend to cry on, but she recently got bad news of her own: Her landlord advised her that he was raising the monthly rent on the condo she shares with her husband and young daughter by $400. Her family is currently searching for cheaper digs.