It seems we’re becoming all too familiar with the alphabet soup explaining financial calamites.
First it was the Great Recession with its U-shaped recovery — bouncing along the bottom for several months, if not years, before the economy showed signs of real growth.
Then, there is the classic, V-shaped recovery where the economy, or stock market, dives downward only to bounce back off the bottom quickly.
Arguably this is more unicorn than real because inevitably some segments don’t recover as quickly, or never achieve previous levels of prosperity, while others grow even wealthier.
Instead, a letter that’s come up a lot lately to explain COVID-19’s impact is a better description of the bifurcated outcome of economic crashes and recovery.
That being the letter K.
While the virus doesn’t discriminate — it can infect anyone — its economic impact tends to hurt the vulnerable more profoundly while more affluent households recover, as a recent survey from a Toronto-based licensed insolvency trustee firm suggests.
When asking what groups were the most worse off from the pandemic, respondents stated 73 per cent of low income earners; followed by seniors (57 per cent); people on disability support (47 per cent); women (46 per cent); new Canadians (42 per cent); visible minorities (40 per cent) and those on welfare (37 per cent).
"Society is not going to recover at the same rate," says Jasmine Marra, spokesperson for Bromwich + Smith.
"And our poll has shown there are several socio-economic groups that are more likely to fall on that lower part of the K."
That said, the pandemic is causing widespread economic stress, as a survey by Manulife of Canadian and America members of its employer-sponsored plan demonstrates. It reveals two-thirds of respondents have experienced financial stress since the outbreak compared with 44 per cent before.
And one-in-four Canadians is highly stressed, nearly double from at the start of 2020.
"The 2020 survey showed us plan members’ financial stress has been exacerbated by the COVID-19," says Brett Marchand, head of Canada retirement, Manulife Investment Management.
What’s even more telling is "more than half of the respondents are worrying about their finances while they are at work." So even those presumably in the top part of the K — the recovery arm — are still leery about money as the pandemic continues.
Of course, things would be much worse without unprecedented stimulus to help keep folks on the job.
The federal and provincial governments have thrown a lot of money at the problem from loans for business as well as supports for Canadians out of a job.
"So far, most workers have made out pretty well with their incomes," says Winnipeg economist Lynne Fernandez, Errol Black Chair in labour issues at the Canadian Centre for Policy Alternatives. "This is all due to the federal government programs such as the CERB (Canadian Emergency Response Benefit)."
Employment has bounced back — though not to pre-pandemic levels — and so too have investor portfolios. But the recovery has been uneven, the provincial government admits.
"The economic impact and recovery phase show substantial differences across sectors as some experience little disruption in sales or in job losses, and are thriving during the pandemic, while others are hard hit," Manitoba Finance states in an email to the Free Press. It further states most negatively affects are the service, including accommodation and food service, and information and culture sectors.
"The K-shaped labour market recovery is seeing jobs in the professional, scientific and technical services bounce back, while jobs in accommodation and food services remained at 13 per cent below February," it explains.
To mitigate the effects, Manitoba Finance points out the government has committed $2.3 billion to its pandemic response. That’s "the third highest pandemic spending in Canada as a share of the provincial economy after Quebec and Ontario, the two hardest-hit provinces."
But the province must do more, critics argue, especially given Winnipeg is now Canada’s infection hot spot.
Among those feeling greatest strain are health-care workers. Overall health care illustrates the pandemic’s socio-economic bifurcation. The most notable examples are in U.S. Just consider its president — at high-risk due to age and physical health — receiving treatment that included latest treatments from a team of physicians — on the taxpayer dime. In contrast, a Florida family received a $1.1-million bill for a loved one who spent several days in intensive care before dying. The individual was fully insured, but only covered 10 per cent of the bill, Newsweek reported in July.
That’s not an issue here, but a chronic lack of funding is exacerbating care during the pandemic, particularly in long-term care. The individuals it serves are the very definition of vulnerable.
But the workers helping them are also experiencing hardship. As the president of the CUPE Local 204 — the Canadian Union of Public Employees representing health-care workers — Debbie Boissonneault says "the COVID pandemic has exposed major holes in our health care."
Representing workers in support roles to nurses, doctors and other higher paid health-care professionals, Boissonneault says the union is worried about the difficult conditions for its workers, whose incomes often top out at under $40,000 annually, providing them with a tenuous grasp on middle-class life.
"Morale is at an all-time low, and health-care workers haven’t had a pay increase for years," she says, adding sick-time benefits are insufficient for those falling ill or self-isolating.
As a result, the system is facing shortages for these workers as it is for nurses, Boissonneault adds.
A key factor aggravating the province’s ability to fight the disease is inadequate funding, Fernandez says.
Almost across the board, already strained public services have experienced cuts in recent years.
"Bifurcation started long before COVID with the health-care reforms, selling off of public housing, laying off of Crown corporation employees."
Fernandez further notes the government’s latest legislative lineup of bills appears more focused on returning to a pre-COVID agenda — deficit busting — with little focus on the second wave.
In statement to the Free Press, the government’s executive council — or cabinet — argues its legislative agenda is a "mandate to protect Manitobans and their long-term personal and financial health."
It adds the government recently expanded protections for workers to take sick leave and "sought authority to spend an additional half-billion dollars on its COVID-19 response."
But critics note more action is needed to support vulnerable workers, small businesses and others facing a dark winter ahead.
As Fernandez notes, these inequities are not new.
"It’s the intensity of the bifurcation that is new, and that’s happening under COVID."