Robin Arnone, a part-time trainer before the coronavirus pandemic, hasn’t set foot in the Colosseum Gym in Columbia, Md., since the virus shut it down almost a year ago. The gym is open again, but she doesn’t need the work. Things are going gangbusters in her other job as a home appraiser, and she hasn’t looked back.

For Julie Stark, one of Ms. Arnone’s best friends and a professional dog walker, things are not so rosy. With many clients stuck at home in the pandemic and taking care of their own pets, her services are no longer in demand. Instead of walking seven dogs each day, she now walks three.

Ms. Stark has had to economize, eliminating dance and gymnastics classes for her children to save $350 a month. She doesn’t know when her clients will want her back, but it’s not something she discusses with Ms. Arnone. “We don’t talk about money,” Ms. Stark said.

“It would be awkward if she were a dog walker and doing unbelievably well,” she added. “I’m happy for her.”

And there is a lot in Ms. Arnone’s life to be happy about. She replaced her used Lexus with a new one last year, and in December she indulged herself with a $550 Dyson hair dryer. “It felt a little ridiculous,” she said of the purchase. “But I worked hard, and if there’s any year I’m going to do it, it’s this year.”

Robin Arnone and Julie Stark are among the millions of friends who were on a relatively equal financial footing before last March — people who would have thought nothing of splitting the check on a night out — and now find themselves on vastly different trajectories. Lockdowns changed what Americans can do as well as what services they need, and in the process created divergent fates for many workers.

The pandemic has wreaked havoc on many who were already struggling. Nearly 10 million fewer people have jobs, and some 26 million reported not always having enough to eat, according to Census Bureau data.

For the 50 percent or so of the population that make up the middle class — defined by Pew Research Center as having an income ranging from around $45,000 to $135,000 for a household of three — the toll has been uneven. Like a tornado, the pandemic can devastate one household and leave neighboring ones unscathed.

Ms. Arnone’s world, in the Washington-Baltimore area, exemplifies that. The gym where she worked, the Colosseum, is owned by her friend Tim Gallagher. His monthly income at the gym is down 25 to 30 percent, and a quarter of the gym’s members have suspended their accounts. To save money, he has lowered the thermostat at home to 60 degrees from 65, and while his truck has more than 340,000 miles on it, he has no plans to replace it.

“You just got to scrape along and gut it out,” he said. “We’re really struggling to get by.”

But in Ms. Arnone’s other field, home appraising, her friends and colleagues are reaping rewards from the booming housing market, where January sales were up 23.7 percent from a year earlier, according to the National Association of Realtors. Ultralow mortgage rates have prompted a wave of refinancings, which require fresh appraisals.

“I don’t have much to complain about,” said Traci Warner, a friend of Ms. Arnone’s and a home appraiser in Waldorf, Md., south of Washington. After her husband was laid off from his sales job in April, Ms. Warner’s work picked up the slack.

It’s not that things are perfect, but unlike Mr. Gallagher, she does not feel that she is barely hanging on.

This contrast is mirrored in the larger economy. Weekly unemployment claims by newly laid-off workers remain at historically elevated levels even as stock indexes reach record highs.

Vaccines have arrived, but their slow rollout means it will be months before anything resembling normal activity can resume at restaurants, hotels, gyms, airports, malls and other businesses that depend on bringing people together.

“It’s very uneven,” said Gregory Daco, chief U.S. economist at Oxford Economics, a forecasting and research group. “The recovery for the most vulnerable parts of the population will take years.” Not only are wages and salaries down for the hardest-hit segments of the work force, he noted, but so are overall employment and participation in the labor force.

At the very top, the gains have been staggering. In eight months after the pandemic hit the United States, the wealth of the country’s roughly 650 billionaires grew by $1 trillion, according to a November study by the Institute for Policy Studies and other progressive groups. That included a $70 billion lift for just one of those magnates: the founder of Amazon, Jeff Bezos.

White-collar employees, having emerged mostly unscathed from the sharp downturn in 2020, are looking forward to what they hope will be a robust recovery in 2021 once most people are vaccinated. Service workers, devastated by the idling of entire industries amid lockdowns and other restrictions, just want the pain to abate.

The split was evident in the latest jobs report from the Labor Department. While professional and business services employment jumped by 97,000 in January, that job growth was almost entirely offset in the private sector by losses in retail, leisure and hospitality industries, among others.

So while lines at food banks lengthen, new Teslas dot parking lots, and there are waiting lists for Peloton machines so the most fortunate can keep up with their workouts from home.

Peter Atwater, a lecturer in economics at the College of William & Mary, has popularized a term for this phenomenon: the K-shaped recovery. While one arm of the K ascends, the other is driving lower. “There’s an enormous divide in confidence,” he said. “And we buy and spend based on how we feel.”

Janet L. Yellen, the newly confirmed Treasury secretary, extended the metaphor during her confirmation hearings. “We are living in a K-shaped economy, one where wealth built upon wealth, while working families fell farther and farther behind,” she said.

Ms. Arnone misses her days at the gym, especially spending time with clients. It is the first time since she was 15 that she hasn’t worked as a trainer, she said. But she is feeling pretty good otherwise.

Before the pandemic, she would train people in the morning and shift to her real estate work in the afternoon. Now she rises at 6 a.m. to start writing up appraisals before hitting the road to visit as many as eight homes in a day.

After typically handling 500 appraisals a year, she did 635 last year. She is paid by the banks that issue the mortgages, and last year she estimates she earned roughly $250,000 for her services, up from about $185,000 in previous years.

She lives in Woodbine, Md., 25 miles west of Baltimore, and though she still thinks of herself as middle class, she says her nieces tell her she is upper middle class and concedes that they’re probably right.

It’s a world away from the apartment where she grew up in Randallstown, Md., a Baltimore suburb, as the child of a single mother. “Thinking back, I had no clue,” Ms. Arnone said. “I didn’t realize how much we didn’t have. If I wanted something, my mom would go without, but I didn’t have the nicest clothes or the name brands.”

Maybe that’s why she feels a little ashamed of her good fortune when she sees news stories about long lines at food banks or other evidence of the pandemic’s economic woes. “When I throw out the veggies I never got to eat, my mother’s Catholic guilt weighs one me,” she said.

Home appraisal is a boom-and-bust business, driven by the housing market’s cycles. But with interest rates near record lows, and new buyers shopping for houses while existing homeowners refinance, work is plentiful for now.

Ms. Warner — Ms. Arnone’s friend and fellow home appraiser — traded in her Honda Accord, which had more than 300,000 miles on it, for a 2017 BMW X3, not long ago, and was able to go to the beach in Delaware with her family last summer. This month, they went skiing in Virginia.

Ms. Arnone, by her own description, is a worrywart, and had done her training work on the side to supplement her income. Now she doesn’t feel the need.

“The gym was always my safe place, and it’s weird not seeing Tim and other friends — I miss them,” she said. “But I won’t lie. It’s nice to have more time and more flexibility.”

A year ago, Julie Stark felt things were going her way. Five years earlier, she started a business as a dog walker and pet sitter, after having been a veterinary technician. “It was perfect,” she said, until the pandemic arrived.

Now her clients are home and can walk their dogs themselves. And the decline in travel leaves little need for pet sitters. “I’m holding out hope that my clients will need me again,” she said. She has been surviving with help from her parents, child support from her ex-husband, and unemployment benefits.

Ms. Stark has her hands full with her own pets in the meantime. She has two rescue dogs, Roxy and Luke, as well as two cats. Everyone, she adds, gets along.

She did get one new client during the pandemic, but most of the so-called pandemic puppies adopted in the last 11 months are being walked by their owners or their children, she said. She isn’t sure whether her old clients will come back when the pandemic recedes or she will be walking the new dogs.

Sometimes she thinks of returning to a 9-to-5 job outside the house. “Part of me just wants a stable job and a regular paycheck,” she said. It doesn’t seem realistic, though: With her two daughters, aged 10 and 14, in school remotely, she needs to be at home most of the time. “I’m just hoping things will return to normal,” she said.

Government aid has been crucial for helping people like Ms. Stark and Mr. Gallagher weather the pandemic. And their reliance on it underscores why many economists believe more federal assistance is necessary, especially if the K-shaped recovery continues.

“Political leaders and policymakers have a big role to play in getting that bottom leg of the K up,” Mr. Daco of Oxford Economics said. “They hold the key to a stronger labor-market recovery that is as inclusive as possible and will reduce the long-term damage to the economy.”

Mr. Gallagher, the owner of the Colosseum Gym, recently applied for a second round of small-business loans. That, and forbearance from his landlord, should enable him to keep Colosseum open in the months ahead.

Still, he is not expecting an imminent recovery. “I think it’s going to take till the end of the year,” he said. “We’re allowed to operate at 50 percent of capacity. But I don’t have to worry about 50 percent because everybody is scared to death to come in.”

The warnings from Maryland’s governor, Larry Hogan, haven’t helped business, Mr. Gallagher added. “His Covid briefings are deadly to my gym,” he joked. “Every time he opens his mouth, another five or six people put their memberships on hold.”

In the meantime, Mr. Gallagher’s decisions reflect the continuing economic pain. He has laid off most of his part-time employees.

Normally, he and his wife would go out several times a week, but now one outing is the limit. “That’s a big splurge for us,” he said. They have also dropped premium channels from their cable service.

At the gym, a popular gathering spot for hard-core weight lifters, the clanging of the machines has been replaced by background music and the whirring of the treadmills occupied by the most devoted exercisers.

And public health officials have warned that high-intensity workout sessions at gyms can spread the coronavirus, potentially threatening Colosseum’s revival.

Mr. Gallagher said there is little personal training going on. Maybe five or six guests are out on the floor, while Mr. Gallagher keeps himself busy cleaning up and fixing equipment. Every so often, he signs up a new member, with dues running at $59 a month.

He is confident that eventually — on the other side of the pandemic — people will want to come back to the gym.

Not everyone, though. He is concerned that members who have fallen out of the gym habit may never return. “It’s going to take longer to make up for those memberships and get other people to join,” he said. “A few people will never want to go to the gym, or the movies or where there are crowds of people. It’s a shame.”

Source: https://www.nytimes.com/2021/02/27/business/economy/unequal-economic-recovery.html

News – They Were on Equal Footing. Then the Ground Shifted.