Job losses from the pandemic and the subsequent economic lockdown overwhelmingly affected low-wage and minority workers the most. Seven months into the recovery, Black women, Black men, Hispanics, mothers of school-age children and young people are taking the longest time to regain their employment.
The Labor Department reported earlier this year that apprx. 22 million Americans lost their jobs due to COVID-19 and the economic lockdown. Stay-At-Home orders for “non-essential” workers were issued by several US states beginning in mid-March; by the end of the month, the lockdown was in place essentially nationwide.
The unprecedented lockdown lasted almost two months in many states. It wasn’t until the first half of May when all 50 states had eased at least some coronavirus restrictions. The economy plunged at an annual rate of 31.4% in the 2Q. While the economy is believed to have rebounded by roughly 30% (annual rate) in the 3Q, only about half of the 22 million unemployed had returned to their old jobs or found new ones. You probably know that.
The economic collapse sparked by the pandemic is triggering the most unequal recession in modern US history, delivering a mild setback for those at or near the top and a depression-like blow for those at the bottom, according to a Washington Post analysis of job losses across the income spectrum.
Obviously, those who did not lose their jobs were affected the least. Yet among those who did lose their jobs, the losses were most prevalent among lower-paid workers and minorities. We have not seen a recession which affected low income workers and minorities so much more than higher-paid workers.
For example, Black and Hispanic Americans saw the steepest employment losses and still have the most ground to make up to reach pre-pandemic employment. The pandemic recession took a similar toll on young people, regardless of race. Some 20% of all Americans ages 20-24 lost employment in the early months of the pandemic. And those ages 25-34 have recovered only 43% of lost employment as of the end of September.
The pandemic economy has also affected mothers and fathers very differently. Working mothers with children still living at home saw significantly greater drops in employment than working fathers, according to a Washington Post analysis of Labor Department data.
By comparison, middle and high wage earners were far less likely to be laid off or let go. Many of these workers found they could work from home and continue to do their jobs. It remains to be seen how this unprecedented transition affects the economy going forward. It certainly has many businesses small and large rethinking their need for office space – which will have long-term implications for the commercial real estate market and others.
The Economic Recovery Has Been Very Uneven As Well
The recovery is also spread unequally. While the nation overall has regained nearly half of the lost jobs, several key demographic groups have recovered more slowly, including mothers of school-age children, Black men, Black women, Hispanics, Asian Americans, younger Americans (ages 25 to 34) and people without college degrees.
White women, for example, have recovered 61% of the jobs they lost – the most of any demographic group – while Black women have recovered only 34%, according to Labor Department data through August. And workers with college degrees are 55% recovered, compared with less than 40% for workers with only high school degrees.
No other recession in modern history has so pummeled society’s most vulnerable. The Great Recession of 2008 and 2009 caused much more equal job losses across the income spectrum, as Wall Street bankers and other white-collar workers were handed pink slips alongside factory and restaurant workers.
The 2001 recession was more unequal than the Great Recession: After the 9/11 terrorist attacks, travel and tourism jobs vanished and low-wage employment fell 7% below the previous year’s level, while high earners remained largely unscathed. Yet, even that inequality is a blip compared with what the coronavirus inflicted on low-wage workers this year.
White Americans have now recovered more than half of their jobs lost between late February and April. By comparison, Black Americans have recovered only about a third of employment lost in the pandemic. For minorities, the economic recovery is unfolding much more slowly.
Finally, the recession’s inequality is a reflection of the coronavirus itself, which has caused more deaths in low-income communities and severely affected jobs in restaurants, hotels and entertainment venues – as Americans try to avoid crowded places to protect their own health and slow the spread of the virus.
The bottom line is, this recession – and recovery – are unlike anything we’ve seen in our lifetimes.
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