Marketplace Morning Report: How COVID-19 Deaths Impacted Social Security

Release Date: February 19, 2025

In this episode of the Marketplace Morning Report, host David Brancaccio delves into the intricate relationship between the COVID-19 pandemic and the Social Security system. Additionally, the report examines the National Association for the Advancement of Colored People (NAACP)'s recent initiatives targeting businesses that have rolled back their Diversity, Equity, and Inclusion (DEI) programs under President Trump's administration. This summary encapsulates the key discussions, insights, and conclusions from the episode, enriched with notable quotes and proper attributions.

COVID-19's Unintended Boost to Social Security

Understanding the Impact

David Brancaccio introduces a compelling study from the National Bureau of Economic Research, which reveals that the COVID-19 pandemic inadvertently strengthened the Social Security system. The study found that the premature deaths of approximately 1.3 million people during the pandemic resulted in $205 billion being added to Social Security funds.

Excess Deaths and Social Security Contributions

Hanka Hayon Johnson from the University of Southern California emphasizes the alarming nature of these findings. At [02:02], she states:

"The early days of the COVID pandemic were really scary and for good reason."

This sentiment underscores the severity of the pandemic's early impact. Gopisha Goda of the Brookings Institution elaborates on the statistics:

"There were 1.7 million excess deaths during the pandemic" [02:11].

Mechanics of the Boost

Many of the deceased were over 65 and receiving retirement benefits. As Daniel Ackerman explains [02:14]:

"They paid in but stopped collecting when they died and those uncollected funds added up."

This cessation of benefit distributions due to untimely deaths led to the accumulation of additional funds within the Social Security system.

Historical Context and Comparisons

Gopisha Goda draws parallels to previous public health crises, mentioning an older study on how smoking-related premature deaths also reduced Social Security costs:

"There is actually an old study about how smoking affects Social Security. Increased rates of smoking reduce the cost to the program because there are premature deaths associated with smoking." [02:42]

Long-Term Implications

While the $205 billion surge is substantial, Daniel Ackerman provides perspective on its longevity:

"The $205 billion boost to Social Security won't change much in the long term." [03:16]

He further notes that the government disburses this amount in benefits every few months, highlighting the transient nature of the financial impact.

Broader Economic Effects of the Pandemic

Beyond the immediate boost from excess deaths, the pandemic's impact on labor force participation also influenced Social Security. Gopisha Goda points out:

"The labor force participation rate directly influences the payroll taxes that are going into Social Security as well." [03:08]

This decline, partly due to long COVID cases causing workforce drop-offs, has multifaceted effects on the system's sustainability.

NAACP's Pushback Against DEI Rollbacks

Contextual Backdrop

In the wake of President Trump's initiative to dismantle DEI programs within the federal government and the private sector, the NAACP has emerged as a vocal opponent. David Brancaccio outlines the situation [06:51], noting:

"President Trump's push to end inclusion, fairness and diversity programs inside and outside of the federal government has been met with wide-ranging cooperation from the private sector."

NAACP's Strategic Response

Keisha Bross, Director of Opportunity, Race and Justice at the NAACP, discusses the organization's recent endeavors [07:14]:

"The NAACP issued a black consumer advisory over the weekend calling for accountability for the businesses that have rolled back their DEI initiatives and encouraging black consumers to prioritize shopping in places that are sticking to them."

Economic Clout of Black Consumers

Highlighting the significant influence of the target demographic, Daniel Ackerman states [07:29]:

"Black consumers have $1.8 trillion of spending power."

Consumer Behavior and Moral Alignment

A pivotal moment in the discussion arises from findings presented by a Harris Poll. John Gerzema, CEO of Harris, reveals that a substantial portion of consumers are altering their spending habits to reflect their moral beliefs [08:33]:

"66% of black consumers, 65% of black women, and even 69% of under 35 black consumers are shifting their spending to align with their moral views."

Avoiding Boycotts in a Complex Economy

While the NAACP urges intentional spending, Keisha Bross acknowledges economic constraints faced by many:

"The realities of the economy make it hard for people to avoid some companies altogether." [07:47]

Thus, instead of outright boycotts, the focus is on intentional support for companies maintaining DEI commitments.

Long-Term Consequences for Businesses

Americus Reed II, a marketing professor at the Wharton School, provides insight into the potential long-term impacts on businesses [09:01]:

"Things like boycotts are going to be one of the results that I think are going to shake out with respect to those companies that are actually going."

Furthermore, Gopisha Goda adds:

"Pay a long-term price for that with respect to your the credibility and authenticity of your brand." [09:22]

This underscores the enduring repercussions businesses may face if they retract their DEI initiatives, affecting their brand credibility and consumer trust.

Additional Highlights

Government Workforce and Legal Challenges

Briefly, the episode touches upon job terminations at the Centers for Disease Control and Prevention (CDC), where David Brancaccio reports [03:28]:

"About 750 workers at the Centers for Disease Control got job termination letters over the weekend, about half the 10% layoff initially expected."

Additionally, a lawsuit involving DOGE (Direction Organizing Government Employees) is discussed, where consumer and union groups are challenging the IRS and Treasury Department's attempts to access taxpayer information [04:08].

Conclusion

The episode of Marketplace Morning Report provides a nuanced exploration of how unforeseen factors like the COVID-19 pandemic can have both direct and indirect effects on major economic systems such as Social Security. Simultaneously, it sheds light on the powerful role of consumer behavior in shaping corporate responsibility towards DEI initiatives. Through expert insights and comprehensive analysis, listeners gain a deeper understanding of the complex interplay between public health crises, economic policies, and societal values.

Notable Quotes:

• Hanka Hayon Johnson [02:02]: "The early days of the COVID pandemic were really scary and for good reason."

• Gopisha Goda [02:11]: "There were 1.7 million excess deaths during the pandemic."

• Daniel Ackerman [03:16]: "The $205 billion boost to Social Security won't change much in the long term."

• Keisha Bross [07:14]: "The NAACP issued a black consumer advisory over the weekend calling for accountability for the businesses that have rolled back their DEI initiatives and encouraging black consumers to prioritize shopping in places that are sticking to them."

• John Gerzema: "66% of black consumers, 65% of black women, and even 69% of under 35 black consumers are shifting their spending to align with their moral views."

• Americus Reed II [09:01]: "Things like boycotts are going to be one of the results that I think are going to shake out with respect to those companies that are actually going."

This comprehensive summary ensures that even those who haven't listened to the episode can grasp the critical discussions and insights presented, structured in a clear and engaging manner.