June 22, 2020

Race, COVID-19, and Payday Loans: How “Race-Neutral” Policies Reproduce Racism

Jenny Enos author photoBy Jenny Enos, Sociology Doctoral Student, Rutgers University

More than three months into the COVID-19 pandemic, it has become abundantly clear that the virus has impacted the U.S. along racial and class lines. Previous posts on the blog have already commented on how people of color – Black Americans and Latinx immigrants, specifically – are at much higher risk of COVID-19 than White people. This is in part the result of significant class-related inequalities: people of color are vastly overrepresented among those deemed to be “essential workers” who can’t work from home, have less access to healthcare, and are more likely to be using means of transportation that involve potential exposure (e.g. taking the subway or bus). Of course, poor Whites are also at risk for these same reasons. There is no doubt that the long-lasting economic repercussions of the pandemic will also hit these populations the hardest.

However, race also matters outside of these class-related inequalities. For example, studies show that racial bias leads to less accuracy in medical treatment for Black patients. This means that once admitted to the hospital, Black COVID-19 patients are less likely to receive the proper treatment than their White counterparts. Although the vast majority of nurses and medical professionals don’t purposefully discriminate against patients based on their skin color, unconscious biases and stereotypes may impact treatment procedures in ways that can cause significant harm and lead to increased death rates for COVID-19 patients of color.

These facts speak to the immense extent to which racial inequalities are woven into the fabric of society. This is a big part of the message being sent by mass protests against police brutality around the country, which have been spurred by the horrifying police killings of unarmed Black men that keep happening.

While protesters are asking police departments to stop this excessive use of force against Black men, it is about more than that. Police brutality is a symptom of the deeply embedded racism in our country and the racial inequalities that have been perpetuated and reinforced for centuries. When sociologists talk about “structural or systemic racism,” this is what we are referring to: going beyond individual acts or incidents of racism, and instead looking at how the very policies, processes, and laws that our society is built upon end up reproducing racial inequalities. Police brutality is part of the larger systemic racism that plagues the entire criminal justice system, which is responsible for the mass incarceration of people of color that we see in our prisons today.

While “structural racism” can be a useful term for demonstrating how racism is embedded in society, it can also sound very passive and vague. After all, if racism is structural and everywhere, how can we fight it? In this sense, calling it “structural racism” can obscure the active participation of individuals and institutions in policies that end up reproducing racial inequalities.

In light of this, authors like Ibram X. Kendi emphasize that there is either racism or active anti-racism – there is no “in between.” A racist policy, Kendi argues, is one that produces or sustains racial inequality. This means that even supposed “race-neutral” or “colorblind” policies, that make no mention of race and alleges to treat everybody equally, are racist because they do not work to reverse the current inequalities that exist. Only anti-racist policies, that explicitly serve to further racial equality, can be not racist. Thinking about racism in this way – that any action or policy that is not actively anti-racist is in fact racist – makes it easier to hold these vague structures and processes accountable for not explicitly furthering racial equality.

This framework is particularly helpful for understanding exactly how the country’s response to COVID-19 is disproportionately affecting people of color, and will continue to do so far into the future. Even for those who survive the virus, many are looking at years of struggle with financial hardship because of the impact on the job market, both for workers and small business owners.

For example, millions of predominantly low-income individuals and people of color will now be made even more vulnerable to the high-cost and high-risk financial services, possibly leading to high amounts of debt or bankruptcy. One such service is payday loans, which are short-term and high-interest cash loans. These loans are considered “predatory” in the sense that they target low-income individuals and increase the financial vulnerability and exposure of these borrowers to the benefit of the lenders. Black households were already 2.5 times more likely to have a payday loan than White households in 2016, well before the COVID-19 crisis. Now, many more people are likely looking to take out short-term loans to e.g. support family members or partners who have lost their jobs.

Along the line of reasoning that any “colorblind” or “race-neutral” policy can be regarded as racist, as it sustains current racial inequalities, scholar Raphaël Charron-Chénier argues that payday lending is a racialized process that “builds on historical and contemporary racial exclusion.” Similar to for-profit colleges and universities, which also market themselves heavily to people of color and low-income individuals, the supposed aim of payday loans is to offer opportunities and inclusion to marginalized groups (in this case, by offering them access to more credit).

However, the high cost and risk of these loans instead result in sustaining the financial exclusion of particularly Black Americans that has been ongoing for centuries. In this sense, Charron-Chénier conceptualizes payday lending as a source of contemporary racial inequality. Predatory financial services like these are likely only going to continue to disadvantage Black Americans and other people of color through the remainder of the COVID-19 crisis, effectively perpetuating yet another layer of racism in our country.


As protests have spread around the globe, the pressure is on police departments and politicians, particularly in the United States, to do something from reforming law enforcement tactics. God bless to all of us!

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