As 2020 came to a close, unemployment plateaued at an unsettling 9.8 million jobs, 40 million Americans were on the precipice of eviction, and the leaders of the nation’s business juggernauts were gloating over their unusually prosperous year.
With every spike and lull of Covid-19 in the past year, the seams of the American economy split apart a little more. The rich — including nearly all of the nation’s 50 most successful companies, according to the Washington Post — became exponentially richer. Everyone else became more unemployed, more economically unstable, more afraid, more poor.
The Highlight’s Money Issue is not about Covid-19, necessarily. It is, however, about everyone else — those for whom debt is an oppressive force, those whose only option to stay employed was to risk their health, those whose only shot at not slipping further down the economic ladder is government intervention, and barring that, luck.
Their instability is all the more stark set against the phenomenal wealth generated during the pandemic. The American economy today feels like obscene wealth and debilitating debt and nothing in between.
It’s at the center of this tension that The Highlight’s March issue finds itself.
With a keen understanding of the growing inequity, the workers at Amazon’s Bessemer, Alabama, fulfillment warehouse quietly began to organize last year, during the pandemic. For our cover story, labor reporter Kim Kelly traveled to Bessemer to meet with workers to understand why this spiritual Southern town is the first to get this far in its organizing effort — a battle that the e-commerce Goliath is fighting mightily. Workers and organizers told Kelly that a $15 or $16 wage is not what moves them — though Amazon founder Jeff Bezos made $75 billion in 2020 — but morality. Unions, however, have a tendency to keep wages higher; towns like Bessemer desperately need the stability. In just a week, their votes on whether to unionize will be tallied; if they are successful, it will be a landmark moment for workers, likely to set off similar efforts among tech workers across the nation. But for now, there is just Bessemer.
The word “inheritance” sounds like something for the very rich, but the truth is that for a fifth of Americans, a small gift of $10,000 or $20,000 from a loved one is all that’s helping them maintain a tenuous grip on their economic status. With the boomers aging, that number could grow; trillions of dollars are expected to be passed from one generation to the next in the coming years in what’s widely been referred to as “the Great Wealth Transfer.” But who stands to inherit all of that cash, and what’s in store for them? Vox’s Meredith Haggerty spoke with several people who’ve inherited wealth (or expect to) on the emotional and economic costs of coming into money.
The flipside of inheriting money, of course, is knowing there’s no such wealth transfer coming, no generational wealth to speak of, no familial assistance at all. In a personal essay, Lynette Khalfani Cox, a writer and money coach, explores the struggle of being the first in her family to generate wealth and her own relationship to the so-called “Black tax” — the money that Black Americans must often set aside to assist family members. For many African Americans, she writes, the cycle of low wealth, low income, and familial dependence continues to present hurdles on the path to prosperity.
For many people of color, that path begins with taking on student loan debt. It’s one of the reasons some are lobbying the Biden administration to forgive some or all federal student debt, so the economic futures of tens of millions of people don’t begin so deep in the hole that they’ll never dig themselves out. “The scale of the problem, and its effect on lives, has made student debt forgiveness a much more salient conversation in mainstream politics,” writes Vox’s Emily Stewart. But will those drowning in tens of thousands of dollars in student debt truly benefit if it is wiped out en masse? And does forgiveness mean more money to funnel into home-buying, family life, or entrepreneurship? The answers, economists of all stripes tell Stewart, are surprisingly complex.
And finally, Joyce Rice and Kevin Moore look closely at how debt can unravel a life in harrowing ways, including putting debtors into the prison pipeline. The founding fathers purposefully tried to end the “debtors’ prisons” of old, but a new, more virulent version of them has sprung up anew, and Rice and Moore’s comic explains how.
With a struggling economy and few work prospects, Bessemer, Alabama, has been called an “unlikely” place for an epic union battle with Amazon. They don’t know Bessemer.
By Kim Kelly
As the boomers age, a “great wealth transfer” may be on the horizon. Will a gift from grandma save the middle class?
By Meredith Haggerty
As a money coach and a Black woman, I’ve seen the racial wealth disparity firsthand.
By Lynnette Khalfani-Cox
From mental health to home-buying, there are myriad ways education loans can affect lives. That’s why it’s so difficult to find a one-size-fits-all solution, economists say.
By Emily Stewart
Debtors’ prison might sound arcane. But this comic explains how forms of them exist in America today.
By Joyce Rice and Kevin Moore