Research Findings

Climate Change Isn’t Hurting Everyone: White Middle Class Americans Benefit from Natural Disasters

March 7, 2019

Recently, the United Nations’ Climate Change Conference in Poland, the U.S. National Climate Assessment Report, and severe forest fires, hurricanes and winter storms have called attention to just how devastating climate change already is and will continue to be. Yet, what these events often fail to highlight is who benefits from this devastation. Understanding that piece of the puzzle is critical for building better policy approaches to climate change.

One of the most tangible effects of climate change in the United States is the mounting cost and frequency of high-impact natural hazards. In 2018 alone, mudslides engulfed large segments of Montecito, Hurricane Florence flooded a large swath of the Carolinas, Hurricane Michael destroyed communities along the Gulf coast, and California experienced some of the most destructive wildfires in history. These are just some of the most widely known events. Hundreds of other natural hazards caused millions more in damage and loss of life across the country.

In the wake of such catastrophes, we naturally focus on the destruction, and for good reason. These events not only inflict economic loss but also individual and collective trauma. Yet, what we often miss is how over time these disasters also financially benefit some residents. This insight has emerged through a series of papers in which we seek to better understand the long-term social impacts of natural hazards. Are they affecting everyone in the same way? Is everyone losing? Is anyone gaining?

Disasters affect people in different ways

Most sociological research on natural hazards targets one or two major disasters like Hurricane Katrina or Superstorm Sandy. By focusing on a small number of extreme cases, researchers are able to conduct in-depth research on how residents’ lives are affected and how the responses of government, nonprofit, and business organizations influence recovery. These studies consistently show that the effects of disasters are not shared equally. Black and impoverished residents experience more economic, physical and psychological loss than their White and wealthier counterparts.

These types of studies remain essential for understanding how natural hazards further entrench inequalities. Yet, the case study approach is unable to disentangle the influence of natural hazards on overall inequality from the influence of other national factors and trends or to examine the cumulative effect of habitual disasters. Our research explores these issues.

We link the Panel Study of Income Dynamics’ representative sample of the U.S. population to local information on natural hazards, FEMA aid, and social demographics. We evaluate how damages from local natural hazards influence residents’ wellbeing over a 15-year timespan.

From previous research, we expected marginalized residents to suffer the most from natural disasters, but we also expected all residents who lived through them to suffer financially. To our surprise, we were wrong.

Privileged residents financially benefit from natural disasters via recovery aid

Instead of financially suffering, advantaged residents actually accumulate more wealth than their counterparts who did not live through natural hazards or lived through ones that were less costly. And, the more social advantage one has, the more this is so. Thus, after disasters, Whites accumulate more wealth than People of Color, homeowners more than renters, and the well-educated more than the less educated. Furthermore, within the more advantaged categories, the more damage that occurs, the more wealth accrues. As a result, privileged residents are financially benefiting from natural disasters and their recoveries, even if they don’t realize it.

Our research does not identify why exactly privileged Americans benefit financially from natural disasters. Yet, one major factor is the focus in recovery efforts on restoring property.

To restore damaged homes, buildings, and infrastructure, government assistance and insurance payouts allocate funds depending on the value of the property. Thus, the higher the property’s value, the more money to restore it. However, property values are not merely determined by the structures themselves. Instead, the value of property is tightly tied to neighborhood racial composition. This means that a two-bedroom, two-bathroom house located in a Whiter neighborhood is likely to receive more recovery capital than the same two-bedroom, two-bathroom house in a Blacker neighborhood.

This additional recovery aid helps families restore their homes and make renovations in the process. As a result, these homes increase in value, increasing their owners’ wealth. Yet, it is not just the immediate recipients of recovery aid that benefit from the influx of capital. Communities that have enough capital to rebuild also experience corporate investments, infrastructure advancements and the associated increases in property values. This creates a positive ripple effect on all residents in White middle class neighborhoods.

Building equitable policies to overcome privileged blindspots

This process requires no explicit conspiracy or negative intent. The market logic upon which long-term recovery assistance rests is sufficient, with government programs offering no exception. Because government programs typically operate through rather than counter to the market, we find that the more FEMA aid a county receives for the same level of disaster damage, the more wealth inequity grows.

Our research offers further evidence that rising costs of climate change are inseparable from rising levels of racial and socioeconomic inequality. It also reveals unexpected benefits of climate change to those positioned further up the social ladder. Because these benefits are seldom recognized and because they are grounded in seemingly status-neutral private property rights and market logics, they are unlikely to change without deliberate action.

These dynamics pose a problem because they have unwittingly turned disaster recovery into a kind of opportunity hoarding in which collective resources are gathered via taxes and insurance and then disproportionately funneled upward to the more socially advantaged, who are unlikely to see current approaches as a problem needing reform. Building better, more equitable policies related to climate change will require overcoming these privileged blindspots and realizing that we are all in this together. This opens new possibilities for transformative partnerships and policies.

Read More

Junia Howell and James R. Elliott, “As Disaster Costs Rise, So Does Inequality,” Socius 2019.

Howell, Junia and James R. Elliott, “Damage Done: The Longitudinal Impacts of Natural Hazards on Wealth Polarization in the United States,Social Problems 2018.

Kevin T. Smiley, Junia Howell, and James R. Elliott, “Disasters, Local Organizations and Poverty in the United States, 1998 to 2015,” Population and Environment 2018.

James R. Elliott and Junia Howell, “Beyond Disasters: A Longitudinal Analysis of Natural Hazards’ Unequal Impacts on Residential Instability,” Social Forces 2017.

Image: Michael Raphael via Wikimedia Commons (CC BY-SA)

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