The Real Divide: Those Who Are Not Allowed to Work

With the employment rate in the US jumping to alarming 14.7% from less than 4% in just one quarter, the COVID-19 crisis has created a gap between those who are allowed to work, and those who are not.

Industry classification by job security during the COVID crisis

When people talk about inequality, they typically discuss absolute wealth levels as a point in time. This is similar as looking at a company’s balance sheet. However, I’ll argue that looking at a person’s freedom to continue working is more important. Not unlike looking at a company’s cash flow.

I classified industries into 4 quadrants depending whether they are mission critical to maintain our standard of living and whether they require physical presence of employees:

  1. On the low end in terms of job security are jobs where employees cannot work remotely. Also when they do not come to work modern society remains relatively intact. These include hair salons and bars.
Parked airplanes due to COVID-19

People need to start thinking about inequality in terms of flow of wealth rather than accumulation. People whose flow of income is forcibly cut face life-altering events such as evictions, permanent negotiations with creditors, and limits on their future access to resources. Paying my mortgage this month is more important than expensive clothes in my closet.

Update 6/13/2020

A related consequence is that working hours and wealth have become more correlated. This is well explained in the Making Sense podcast by Sam Harriss and his guest Daniel Markovits in their episode titled The Failure of Meritocracy. Wealthier people are more likely to work longer hours because their professions allow for multiple working environments, all of which further worsens inequality.

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