Category: Dialogues

Title: Dr. Gbenga Ajilore on Structural Racism and COVID-19 in the Labor Market

Author: Interview by Qianyin Wu
Date Published: July 23, 2020

A job training program that incorporates equity initiatives would have participants complete the training, but it is not considered complete until employment is obtained. There is a disconnect between current programs and actual employment outcomes.

– Dr. Gbenga Ajilore

Can you talk about why the employment to population ratio (EPOP) is an important economic indicator, and to what extent has Chinese imports and automation affected it? 

The EPOP tells you the share of the population that has a job, which takes incarceration rates into account. I noticed in this pandemic that the EPOP ratio for the African American population is below fifty percent, which means that less than half of the African American population has a job. That is shocking, and it should be higher. When the economy is good, [this ratio] is usually up to seventy percent. 

Chinese imports and automation are very complex topics. They are factors, but not the only ones. One of the problems I have with discussions about these topics is that they get painted in xenophobia and concerns that “robots are going to take our jobs,” while shifting the focus away from systemic racism and sexism. Technological advancement can be a good thing. For instance, how many people grew up with a milkman? There used to be jobs to deliver milk, but the invention of the refrigerator killed that industry. Do we want to go back to a time where people deliver milk so we can keep those jobs? No, refrigerators and technology are great. What we have to look at when technology advances is: “what are the new jobs?” Gig work like Uber and Lyft did not really exist fifteen years ago to the extent that they do now. If you told someone fifteen years ago that you were going to use your phone to call some random person to give you a ride, people would say, “that is crazy.” But we all use it now, and that is normal. However, these are not quality jobs. Instead of saying that we need to get rid of these companies, we should create a framework that provides a minimum level of standards like worker protection, benefits, and earnings. These protections are a way of removing structural barriers to allow people to have economic and social mobility.

Do you see the United States fitting into a larger international trend of employment inequity or is it more of an anomaly?  

I think the United States is more of an anomaly. I know there are stronger labor and worker protections in a number of countries, especially in the European Union, and the pandemic has shown that. For instance, Denmark, Australia, and Germany were able to lock down their economies. To make sure that the people kept their jobs, they have wage subsidies programs that provide sixty percent of the unearned wages so firms do not have to lay people off. Firms could furlough workers for two months, but they will still be able to maintain the payroll. Once it is over, people are able to get back to their jobs. It is nice not just because it keeps people paid, but it also keeps people attached to the labor market and, more specifically, to their firms. What is happening now in the United States and what is going to continue to happen is that some of these temporary job losses are going to become permanent. When people go back to the labor market, they have to find a new job. On the other hand, employers have to find new workers. All the on-the-job training that occurred before the pandemic has to be done again, as opposed to other countries where people go back to the job they had. They avoid the learning curve, become more productive and efficient, and companies can keep running as smoothly as possible. 

Do you think the United States could implement a worker protection system like the one that the European Union has?

One of the problems in the United States is the mentality that profit-driven corporations reign supreme, and worker protections and labor market standards will lower profit because more needs to be paid in terms of worker benefits. But such a mentality makes the economy less resilient to external shocks, like the one that we are experiencing. We have had this mentality for hundreds of years, and it is influenced by the media and how we lionize the “titans” of industry. It is hard to push past that mentality to show why worker protection is important. If we are going to implement a system like the one that the European Union has, it is going to be because of how tough this pandemic has been. We have to make the argument that putting these protections builds a resilient economy so that when we are hit with a recession or a pandemic, we are able to weather it and come back out stronger, but we are not going to be able to do that now.   

Anything else you would like to share?

What we are going through is, first and foremost, a public health crisis. Until we tackle it, nothing else matters. That is something that seems to be getting lost, especially over the last two months, in these discussions about the economy. Let’s fix the public health crisis and then worry about the economy. If we forget about the public health crisis, the economy will never recover because people are dying. People are talking about how unemployment insurance is making people not want to work. No, COVID-19 is making people not want to work because they do not want to die. We cannot just wait for a vaccine because that is not going to work. It has not worked for the three million infected people, and it has not worked for the 130,000 people who have died. There are things we can do to minimize this, and that is the key.

This transcript has been lightly edited for clarity and length.

. . .

Dr. Olugbenga Ajilore is a senior economist at the Center for American Progress and a Visiting Fellow at the Urban Institute. His expertise includes regional economic development, macroeconomic policy, and issues in diversity and inclusion. Having served as president of the National Economic Association, Dr. Ajilore has been invited to testify in front of Congress. He has been featured in The New York Times and The Washington Post and has published in numerous journals such as the Atlantic Economic Journal.



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