Riots will delay the recovery — and dishonor George Floyd’s memory

The national mood shifted significantly in the past week. We went from seeing critiques that the Trump administration was reopening the economy too swiftly and endangering lives to violent rioters in major metropolitan areas hijacking otherwise peaceful protests of George Floyd’s brutal murder.

Besides dishonoring his memory, these riots risk undermining the recovery from the “Pandemic Recession,” particularly in minority and low-income communities. Let’s examine the data.

First, when we look at the areas that have been hardest hit by the COVID-19 pandemic, we see that they are largely lower-income and black communities. Gathering data on 1,365 core business statistical areas from the Census Bureau’s American Community Survey (ACS) and HomeBase – a tech startup that serves small businesses – I found that the correlation between the fraction of African Americans in a CBSA and the average business closures and employment declines between March 1 and May 30 was 0.15, whereas the correlation when looking at the share of whites was zero.

Second, when we look at the industrial composition of the black community, we see that a substantial portion are concentrated in retail sector jobs. For example, using this same ACS data across 3,220 counties, I found that the correlation between the fraction of African Americans living in a county and the fraction of retail employees is six times as high as it is for whites in the county. Given that property damage and fear about whether it is safe to go outside primarily affects high-contact retail services, the economic and physical incidence of the riots will fall heavily on African American and low-income communities that depend on retail jobs and other small businesses. 

Moreover, since consumer confidence is a powerful driver of demand for retail services, uncertainty and fear about safety is likely to lead to even lower demand for these businesses than would have otherwise occurred. Unfortunately, the bulk of small businesses in the retail sector depend crucially on foot traffic since they are less likely to have comprehensive e-commerce portals.

While it’s too early to tell the full economic and social toll that these riots will have, the volatility uncertainty index spiked on Friday and again on Monday. Moreover, we have historical evidence to look back on. For example, recent research found that peaceful protests from the civil rights movement led to greater political support for civil rights, whereas the violent protests had the opposite effects. Other research found that violent riots during the 1960s led to systematically and persistently lower values for black-owned property, which may have contributed to a 10 percent loss in the total value of black-owned residential property in urban areas.

One difference today is the presence of social media. Given that 74 percent of individuals view social media as an important way to stay connected during the pandemic, what is said and propagated through social media can amplify current events. For example, recent research has found that individuals who are exposed to news about counties that are being hit harder by the COVID-19 pandemic became more pessimistic and adjusted their own consumption downward — even after controlling for the number of infections in their own county. Moreover, social media often raises the temptation to view other people as abstract internet profiles, rather than as fellow human beings worthy of honor and love even if they have a different point of view and experiences.

On top of these temptations, social media has been leveraged by antifa for coordinated and violent attacks. While the Trump administration has recently designated antifa as a terrorist organization, they continue to organize using social media platforms. If Twitter and other social media organizations want to be part of the solution, they should consider partnering with the government when there is probable cause behind a potential violent outbreak, rather than censoring the president of the United States.

We don’t have to repeat the mistakes of the past — like the violent 1960s protests. If we come together and listen to one another, rather than physically attacking or verbally insulting one another, we can reunite and take a meaningful step forward for equality and economic prosperity.

Christos A. Makridis serves as an assistant research professor at Arizona State University, a non-resident fellow at the Harvard Kennedy School of Government Cyber Security Initiative, a non-resident fellow at the Baylor University Institute for Studies of Religion and a senior adviser to Gallup. Follow him on Twitter @camakridis.