The global health pandemic exacerbated existing economic disparities for many older adults who struggled as a result of structural inequality. Even before the onset of COVID-19, many older adults of color showed signs of financial precarity as they were more negatively impacted by the housing crisis of 2008, losing their homes at disproportionate rates or never recovering the loss of equity in their homes. Older adults of color shoulder the burden of this reality, and their lives have been further devastated by the pandemic, resulting in greater economic instability, and expanding income and wealth gaps.
economic disparities, structural inequality, economic instability, income and wealth gaps
COVID-19 has placed the United States’ growing economic inequality in full view for all to see. Ours has long been a nation of two Americas. In one America, the wealthy and mostly White are more likely to have better health outcomes and live a longer life; have access to grocery stores in their neighborhoods with healthy foods; live in communities with parks and other recreation; be able to easily access and afford high quality healthcare; be able to participate fully in the country’s democratic traditions; and reside in communities with high quality public schools and safe, decent, and affordable housing. Perhaps most importantly, in this America, intergenerational wealth provides stability and the foundation for economic advancement and more wealth creation.
In the other America, if you are poor, Black, or Brown, many of life’s necessities are beyond your reach and each successive generation is required to start anew, without being able to benefit from the prior generation’s toil. For older adults of color, intentional structural inequality has made them ripe to become the pandemic’s casualties, exposing them to harsher health and economic devastation and further entrenching their inability to pass on opportunity to future generations.
COVID-19’s Disproportionate Health Impacts Create Economic Precarity for Older Adults
Older Adults Have More Severe COVID-19 Health Impacts
While younger people are more likely to contract COVID-19, older adults are more likely to experience greater adverse health impacts and die at higher rates from COVID-19. The virus has proven to be deadliest for those with preexisting health conditions, including older adults with chronic illnesses. In the United States, 95% of COVID-19 deaths occurred in adults ages 50 and older, and people older than age 65 account for 80% of those deaths (Nania, 2021).
Figure 1. Coronavirus Cases and Deaths by Age Group
Source: (Nania, 2021).
Black and Brown Older Adults Bear the Brunt of COVID-19 Illnesses and Deaths
For older Black and Brown adults, the negative impact has been even more acute. These adults live in socioeconomic conditions defined and determined by structural inequity, resulting in increased rates of the underlying health conditions that exacerbate the effects of the virus. Thus, older Black and Brown Americans bore the brunt of COVID-19 illnesses and deaths. Based on the Centers for Disease Control and Prevention (CDC) estimates, Blacks, Native Americans, and Latinos were between two to three times more likely to die of COVID-19 than Whites, despite these groups representing much smaller shares of the population in the United States (Johnson, Rodriguez, & Kastinas, 2021). These disparities increase with age, growing more severe for Black and Brown adults older than age 50.
Older Adults of Color Suffered Greater Economic Losses During the Pandemic
The health disparities for older Black and Brown adults stem from a lack of access to housing, capital, retirement security, and other resources. Though the Fair Housing Act was passed more than 50 years ago, outlawing discrimination in housing and creating an affirmative responsibility on the federal government to create well-resourced and integrated communities, redlining continues to plague America. Today, older adults of color disproportionately reside in communities that are hyper-segregated and cut off from opportunity (Richardson et al., 2020). In these neighborhoods, residents lack access to health insurance, quality healthcare, COVID-19 testing, and vaccinations. Also, these same communities have elevated rates of exposure to pollution, which further increases the likelihood of falling chronically ill and developing underlying health conditions (Augustine et.al., 2020).
COVID-19 and Housing Shocks for Older Adults of Color
Similar to health disparities, today’s differences in homeownership rates between people of color and Whites are the outcome of exclusionary federal housing policies that advantaged Whites. The White homeownership rate is 74.2 percent, compared to just 48 percent and 44 percent for Latinos and Blacks, respectively (McCargo and Choi, 2020).
This impenetrable gap means Black and Brown people are overwhelmingly renters as opposed to homeowners, again increasing the likelihood of exposure to the virus. Since the beginning of the pandemic, millions of renters who suffered a decrease in hourly wages and loss of employment faced eviction. According to the U.S. Census Household Pulse Survey in August 2021, 3.5 million people faced eviction (U.S. Census Bureau, 2021). As of October 2021, though the number of eviction filings was half the rate of those filed prior to the start of the pandemic, evictions were starting to increase due to the U.S. Supreme Court invalidation of the CDC’s eviction moratorium (Kasakove, 2021). As of February 2022, millions of renters continued to report not being caught up on monthly rental payments, and more than 4.3 million households reported the likelihood of facing eviction within two months. (U.S. Census Bureau, 2022).
Moreover, many states continue to struggle with disbursement of the CARES Act’s Emergency Rental Assistance (ERA) funding that Congress provided to help keep renters housed during the pandemic. It has been reported that more than $30 billion of the $46.5 billion of ERA funds were unspent as of late October 2021 (Nova, 2021). Unlike homeowners who could tap into their home’s equity by refinancing to offset economic disruption, renters typically have few savings.
The pandemic also exacerbated the nation’s existing housing affordability crisis. Older adult households entered the pandemic more likely to be housing cost-burdened, which the United States Department of Housing and Urban Development (HUD) defines as those who pay more than 30% of their income for rent and utilities. More than 4.7 million older adult households struggled to pay rent, and 30% of these older adults experienced a severe rent burden (Prunhuber, Kwok, & Harbage, 2021).
Racial differences are evident in these figures as well. Older Black and Brown renters are more cost burdened: 58% of Blacks and 57% of Latinos are cost-burdened, compared to 51% of Whites (Prunhuber, Kwok, & Harbage, 2021). Further, data from the Consumer Financial Protection Bureau (CFPB) shows that Black and Latino renters report being twice as likely to be unable to pay their housing payment (CFPB, 2021).
‘More than $30 billion of the $46.5 billion of Emergency Rental Assistance funds were unspent as of late October 2021.’
Trends since the beginning of the pandemic show that older renters of color had more difficulty paying rent than did Whites, with more than a quarter of Asian renter households and Black households twice as likely as Whites to be behind on their rent (Hu, 2022). Now that the CDC’s eviction moratorium has expired, millions of renters may face eviction, especially those in states or cities without ongoing eviction protections.
Beyond renters and homeowners, we have all read with horror the devastating impact that the virus has had on older adults living in adult care facilities. Even at these facilities, there is stark evidence of how systemic inequities resulted in the disproportionate impact of COVID-19 on Black and Brown residents. In facilities where Blacks accounted for more than 25% of the residents, residents were twice as likely to contract COVID-19 than residents who resided in nursing homes where Whites accounted for 95% of the population (Chatters, Taylor, & Taylor, 2020).
Because of the nation’s history of discrimination in the labor force, people of color are overwhelming employed as low-wage workers in the service sector of the economy—the same communities hardest hit by COVID-19. These frontline, essential employees worked in public-facing positions, many of them in positions that lack paid leave or the ability to shelter-in-place. These employees also are more likely to be dependent upon public transportation for work travel, which placed them at greater risk for COVID-19 at the start of the pandemic. Government-imposed stay-at-home orders, while necessary to address the public health emergency, disproportionately impacted low wage workers and their personal safety because they lost wages and worked in positions that were more exposed to the virus.
Throughout the crisis, people of color, including older adults, have experienced higher unemployment levels. For older Black and Brown adults the pandemic’s impact on jobs and wage loss is compounded by a lifetime of employment discrimination resulting in labor force setbacks that are more severe than those that they faced during the Great Recession (Gould, 2021). According to the same source, “5.7 million workers 55 years old and older lost their jobs last spring—15% of total employment for this group—and remain over 2 million jobs short of their employment levels before the pandemic hit.” Most of these jobs are not expected to return.
Loss of Business Profits
Older business owners of color also experienced extreme downturns in profits during the pandemic, particularly Asian Americans who also suffered from a rise in hate crimes and racism as public officials scapegoated them, even blaming them for the health pandemic. According to a McKinsey analysis, the unemployment rate for Asian Americans escalated more than 450 percent between February and June of 2020, with the authors noting that the drastic decline correlated to increased xenophobia targeted at Asian Americans and their businesses (Dang et al., 2021; Jagannathan, 2021).
Further, despite the more than $800 billion funneled to “small businesses” through the Paycheck Protection Program (PPP), small businesses owned by people of color tanked during the pandemic-induced recession. While the PPP will likely go down as one of the nation’s greatest taxpayer-funded transfers of wealth, the program’s administration raises significant fair lending concerns. Many Black-, Latino-, Asian American and Pacific Islander-, and Native-owned small businesses could not fairly access the program during the first round where banks lent more than $350 billion to businesses across the nation.
The PPP’s design relied upon banks to originate the loans, and they prioritized customers with whom they had existing relationships. This process, along with the fee structure, significantly disincentivized loans to Black, Latino, and Native American business owners, placing them at a distinct disadvantage in accessing PPP funds when so many were already on precarious financial footing. Between the start of the pandemic and April 2020, 41 percent of Black-owned businesses and 32 percent of Latino-owned businesses became inactive, while only 17 percent of White-owned businesses ceased to operate. (Costa, 2020). The full impact of the pandemic on businesses owned by people of color, including the lack of equitable access to critical federal relief funding, has yet to be fully quantified.
COVID-19 Reveals the Tale of Two Americas
Contrary to the numerous negative impacts outlined above, wealthy Americans have experienced relatively minimal economic disruptions from COVID-19, many even seeing vast increases in wealth since last March. As the economy rebounds and fluctuates, they continue to see gains; resulting in a K-shaped recovery. These Americans are disproportionately older White adults who have consistently been the primary beneficiaries of America’s public policies, including pandemic relief measures that were supposed to contain the economic impacts of the health crisis and help the nation avoid another recession.
‘The unemployment rate for Asian Americans escalated more than 450 percent between February and June of 2020.’
The CARES Act’s $2.2 trillion in economic relief was designed to provide unemployment assistance and stimulus checks to aid families hardest hit by COVID-19. However, this aid pales in comparison to other actions taken by the federal government supporting people with assets and wealth. Over the course of the pandemic, more than $4 trillion has been disbursed through Congress. But several of the federal initiatives funded by these dollars have most benefitted those with the strongest financial positions leading into the pandemic. Specifically, the Federal Reserve’s efforts provided significant support to the bond market, with monthly purchases totaling $120 billion since March 2020, including $40 billion in agency mortgage-backed securities (Home = Life: The State of Housing in America, 2021). These purchases exacerbated existing economic inequality as they benefitted those most likely to own stocks and existing homeowners.
Further, since the start of the pandemic, existing homeowners gained more than $1 trillion in new housing wealth because their homes increased in value by nearly 25% (Levitt & Eng, 2021). The stock market also rapidly recovered from reaching its lowest decline in history at the start of the pandemic. By August 2020, pandemic-related losses were fully erased (Iacurci, 2021). The combination of rising home prices and rising stocks have allowed older Whites with assets to far outpace others in the economy’s recovery, because their strong financial position leading into the crisis helped shield them from the pandemic’s economic downturn.
Additionally, the PPP, as discussed, furthered this divide as businesses that were first in line secured funds to remain afloat during the onset of the pandemic. Moreover, wealthier business owners were able to tap into the Federal Reserve’s Mainstreet Lending program, which aided already successful businesses with hundreds of billions of dollars.
Even before the pandemic-induced recession, there was a chasm between the wealth of older White households and older Black and Brown households. While typically older households have more wealth than those that are younger, these disparities are greater when factoring in race. In 2016, older White adults between the ages of 65 to 74 had a median net worth of $302,500, in comparison with similarly situated older Black adults who had just $46,890 in median net worth (McIntosh et al., 2020).
Older Adults of Color Need Equitable Policy-Fueled Investment for Future Security
Once again, governmental policy responses have served to widen opportunity and resource gaps. The pandemic’s response efforts that were supposed to contain the virus and mitigate against economic hardships have exacerbated wealth inequities. While many of today’s health and economic solutions are wrapped in a veil of equality, public policy has yet to correct for prior discriminatory practices and unfairness that it created, which stymied the health and economic status of millions of older Black and Brown adults. Programs and funding that do not account for the reality of the vastly different experiences of low-income, low-wealth families will never adequately address the gaps exacerbated by this pandemic. Structural and historic discrimination left older adults of color more vulnerable going into the Great Recession, and that crisis and the response to it left them even worse off as the pandemic started. The current crisis is again hitting these same families the hardest, and the response so far has been neither equitable nor sufficient.
The pandemic’s disparate health impacts among older adults of color clearly demonstrate the critical need for equitable access to quality healthcare. However, beyond reforms to our healthcare system, significant investments and policy changes are needed to ensure that the recovery to come extends to all, especially older Americans and people of color. A major focus of policymaking must include increasing access to homeownership and loan refinances and ensuring support for struggling homeowners to remain housed.
The bedrock of the American economy and prosperity has long been housing and homeownership. Access to mortgage credit on safe and affordable terms must be expanded in this country, especially because most future homebuyers will be Latino and Black. Borrowers of color are projected to account for seven out of ten future home buyers, according to the Joint Center for Housing Studies of Harvard University (2017).
Black and Latino consumers lost $1 trillion in wealth because of predatory lending that led to the Great Recession (Bocian, Smith, & Li, 2012). Further, many homeowners of color entered the pandemic upside down on their mortgages because of the over valuation of their properties during the height of the subprime boom (Chang, Intagliata, & Mehta, 2021). Much of the public policy response then and now is missing these vulnerable homeowners, who lack similar levels of housing appreciation because of historic and ongoing discriminatory practices in the mortgage market.
‘The pandemic’s disparate health impacts among older adults of color clearly demonstrate the critical need for equitable access to quality healthcare.’
This crisis showed that once again homeowners with equity generally did better than renters. Expanding homeownership will help older adults of color achieve more economic stability and give them the benefit of home equity. It will also ensure that wealthier White households have potential homebuyers to purchase their homes and offer a chance for more stable retirements. Congress can and should benefit homeowners and the economy overall by making a significant investment in new homeownership opportunity as part of the Build Back Better Act.
Increase Loan Refinancing for Older Adults of Color to Help Economic Disruption from COVID-19
Federal regulators also should do more to ensure that more homebuyers can tap into their home’s equity through a streamlined rate refinance program. Refinancing dominated the mortgage market since the pandemic started with a record-setting estimated $2.609 trillion and a 144.1% increase from 2019 (Home = Life: The State of Housing in America, 2021). As mortgage rates hit historic lows, more households should be able to benefit from today’s refinancing boom. Yet, this opportunity has not reached many older adults of color who have homes that are more likely to be undervalued because of appraisal bias and other discriminatory practices in the housing sector.
Ensure Equity COVID-19 Homeowners Relief to Black and Brown Older Adults
The American Rescue Plan Act of 2021 allocated COVID-19’s hardest-hit homeowners nearly $10 billion in relief to help struggling homeowners remain housed as the pandemic continues. The United States Treasury Department must make every effort to ensure that these funds reach socially disadvantaged individuals, including older Black and Brown adults who experienced job loss or reduction in wages during the pandemic. Too many homeowners of color missed out on the federal government’s Great Recession relief dollars because the help arrived too late for them. It would be a travesty for these communities if this pandemic produces a similar outcome.
Keep Older Renters of Color Housed
With 800,000 older adults struggling to pay rent during this crisis, it is important for states to get this assistance into the hands of renters that need it. Only $22.47 billion out of $46.5 trillion has reached struggling renters since the funds have been awarded (National Low Income Housing Coalition [NILHC], 2022). In an ongoing health crisis, it is unconscionable to allow economically vulnerable older adults, many who serve as frontline workers, to be evicted.
Provide Relief to Older Student Loan Borrowers
While student debt is often seen as a Millennial issue, the $1.7 trillion crisis leaves no age group untouched. Student loan debt is increasingly affecting the financial stability of older Americans. In fact, $92.7 billion of total outstanding student loan debt was owed by 2.4 million borrowers ages 62 and older. Nationally, the median student loan balance of older borrowers increased by more than $1,000, and the total outstanding student debt held by borrowers older than age 60 increased between 2012 and 2017 by more than 50% (Government Accountability Office [GAO], 2021). According to the GAO, the increase in student loan debt has led to more older adults spending their would-be golden years struggling to make ends meet because of the federal government’s ability to garnish their Social Security income for repayment of federal student loan debt (GAO, 2021).
While student loan payments have been paused since the pandemic’s start, repayment is set to resume in May 2022. The prospect of entering repayment for so many who were struggling with student debt before the pandemic and now are dealing with lost wages, unemployment, eviction, and other difficulties, is hard to imagine. The higher education finance system is broken, and reform is desperately needed, including broad-based debt cancellation and improvements to the repayment system to ensure that older adults can manage their loans and not be saddled with debt for decades.
The ongoing COVID-19 pandemic and its economic fallout have had severe consequences for many populations, including and especially older adults of color. Beyond the obvious health consequences and disparities, the economic effects have not been shouldered equally and the governmental response has not been sufficient to mitigate the impact of a public health crisis that is compounding decades of exclusion and discrimination. The only path forward for a truly inclusive recovery requires acknowledging that a one-size fits all approach is not the solution. The status quo from before the pandemic will continue to fall short, and a critical goal of this recovery must include equitable relief for older adults of color.
With no end in sight to this pandemic, a growing climate crisis, and a national reckoning with racism and its legacy, we cannot afford any more policies that are nothing more than Band-Aids for wounds that are much deeper than scrapes and bumps. Our collective future and an economy that works for all depends upon bold policy reforms now.
Nikitra Bailey, JD, is senior vice president of the National Fair Housing Alliance. Ashley Harrington, JD, is a student loan expert, both in Washington, DC.
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