Low-income earners, small-business owners and part-time workers are more likely to lose income following a disaster. Middle and high-income earners, full-time workers and owners of larger businesses are far less likely; indeed they might even earn more.
Recovery and relief funding, which places greater weight on assisting businesses than on income support for individuals, might widen the income gap even further.
The main reason is how programs are structured. Funding tends to be channelled to businesses, not households. Businesses receive tax deferrals, special disaster assistance grants, back-to-business workshop grants, cleanup operation grants, exceptional disaster assistance and other forms of subsidies.
It’s important to assist businesses because these are arteries of the economy. But four possible improvements to the current recovery funding model could help minimise the widening of the income gap.