The latest data on the economy say it's totally recovered, but it still feels like a struggle for the working poor, experts say
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- The pandemic has widened inequality, hitting vulnerable workers hard while making the rich richer.
- Amid this, experts are wary of looking only at overall growth to assess economic recovery.
- Instead, they're increasingly focusing on figuring out how those hit hardest are doing.
Nearly two years into the coronavirus pandemic, the world eagerly awaits predictions of when - and how - the economy will recover from its largest shock since the Great Recession.
By some indicators, that recovery is already well underway.
US gross domestic product (GDP) returned to its pre-pandemic levels in the second quarter of 2021, sooner than economists' expectations. Household wealth reached a record high in September.
For some, such indicators are reassuring: A recent survey by accounting firm KPMG found that CEOs of the world's biggest companies are already back to their pre-pandemic levels of confidence in the global economy.
But many experts worry that people have focused too much on the overall economy - and not enough on how those hit hardest are doing.
"There's too much reporting that everybody is doing just fine and everybody's flush with cash and everybody's doing well, and that's simply not true," Sylvia Allegretto, a labor economist and co-chair of the University of California Berkeley's Center on Wage and Employment Dynamics, told Insider.
"There are a lot of people that are slipping through the cracks, that are being kicked out of their homes and their apartments that never did have much spending. Those people are not doing well and their children are not doing well, and that isn't being reported on very much," she said.
Women and people of color, hit hardest at the pandemic's start, have also largely been left out of the recovery thus far - with Black and Latino workers still experiencing higher-than-average unemployment rates. Workers making less than $30,000 per year were laid off by employers at higher rates.
At the same time, global billionaires' combined wealth has grown by $10 billion during the pandemic, roughly 5.7%.
Amid this disparity, multiple economists told Insider that metrics like GDP paint a misleading picture of economic health.
"If there's a huge burst in GDP and almost all of it goes to Jeff Bezos, we look like we made progress, but it's not a lot of progress for most people," said Manuel Pastor, an economist and sociologist who leads the University of Southern California's Equity Research Institute.
Allegretto said GDP doesn't help explain events that generate economic activity but actually hurt society. "The problem with GDP is GDP goes up when you crash your car. If you get hurt and go to the hospital, it goes up even more," she said.
As a result, economists are increasingly turning to metrics that capture not just overall economic growth, but how economic gains are being distributed.
"We recognize the importance not only of growing the overall pie in GDP, but also how that pie is distributed," Indhira Santos, who leads the World Bank's labor and skills research within its Social Protection & Jobs Global Practice, told Insider.
A common way to measure this is the Gini index, a simple measure of income inequality in a country. A Pew Research report in noted that the US already had the highest Gini number among the Western G-7 countries in 2017.
But Pastor said there's a growing number of "equity metrics," including the gross happiness index and the genuine progress indicator, which attempt to capture a wider range of economic and social activities.
The genuine progress indicator, Pastor said, accounts for unpaid labor like caring for family or community members, which during the pandemic has been "quite important but hasn't been evaluated."
Santos said the World Bank, for its part, is looking at income growth for the top 60% of a country compared to the bottom 40%, in hopes of gaining a more nuanced understanding than what the Gini index offers.
Ultimately, according to Allegretto, "the increased inequality that's been reported is only going to get worse, so we should be looking at the bottom."
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