On top of COVID-19, another epidemic — one of growing hunger, evictions and foreclosures — now looms over millions of poor people in the United States.
They are disproportionately Indigenous, African American, Latinx and other people of color. Many live far from big population centers.
From March to the end of May, more than 40 million workers lost their jobs and applied for unemployment insurance. That doesn’t include the millions of undocumented workers who are out of work and don’t qualify for the benefits.
Since 40 percent of U.S. households live paycheck-to-paycheck, without enough savings to cover an unexpected $400 bill, they urgently need the money provided by unemployment insurance. But the UI systems, which are state-run with federal oversight and emergency financial support, couldn’t handle the burst of applications.
Their computers were overloaded and crashed. Their telephone lines — many states require a call to verify eligibility — were so flooded that some people had to call thousands of times before they could get through. In some states, particularly Florida, applicants had to pick up the forms at libraries or government offices and mail them in, creating major delays.
Just to put food on their table, workers by the tens of millions turned to food banks. But the major federal program — Supplemental Nutritional Assistance Program — requires a time-consuming application-verification process.
Most food banks are private, nonprofit initiatives, staffed by volunteers and often funded by the state or city. However, city money has mostly gone to replace school breakfast and lunch programs that ended when public schools closed.
Given the tremendous shock that COVID-19 expenses have inflicted on state/city revenues, the funds devoted to feeding the hungry in the United States must come ultimately from the banks. They will only lend the money if they expect to make profits — meaning if state/city borrowers don’t default.
Money for rent and mortgage payments running out
Housing in the United States is divided into two separate markets — home owners and renters.
In the rental housing market, some big landlords control tens of thousands of units, while small landlords control a handful. Affordable housing — where units rent for up to $600 a month — is almost always provided by small landlords.
The financial media were surprised that 90 percent of renters were somehow able to pay their rents in May. They explain that the $1,200 federal stimulus checks and access to a federal add-on to unemployment insurance — $600 a week for many workers — provided a cushion. Also, many states have imposed restrictions on evictions that let workers who couldn’t make their rent still stay in their homes.
But the federal money basically sunsets on July 31, while eviction prohibition generally expired on June 1. What happens next?
Bexar County, Texas, for example, which includes the city of San Antonio, expects to be deluged with evictions. Last year, even before the pandemic and economic crisis, landlords filed more than 21,000 eviction cases in the county.
The banks and pension funds that hold the mortgages on most of these rental properties have evidently decided that eviction is the proper response to not paying your rent, no matter what tragedy dislocation and homelessness may bring. Many small landlords would rather make a deal, but the banks ultimately call the shots.
Even water isn’t safe
Water is part of the essential social safety net that has become unavailable to many.
Poor communities in the desert or arctic areas of the United States, where many Indigenous and people of color live, struggle to sell the bonds they need to supply residents with water and sewerage. Interest rates set by the banks are more than these communities can afford.
In Utqiagvik, Alaska, for example, the most northern community in the U.S.,where the Inupiat are the majority, it costs $7,000 to connect a house to the water/sewerage/electric grid.
Some 40 percent of households in the Navajo Reservation, which is spread over three states in the Southwest and is home to 250,000 people, have no access to running water.
So hundreds of thousands of the poorest people in the U.S. lack the water they need to flush toilets or even wash their hands — a basic sanitary measure essential to limiting the spread of COVID-19.
This reality of extreme inequality is one of the biggest reasons the U.S. now leads the world in COVID-19 cases.