WASHINGTON (AP) – Ten months into America’s viral outbreak, low-income workers are still bearing the brunt of job losses – an unusual and harsh feature of the pandemic recession that plagued the economy last spring.
In December, for the first time since April, the country retired. Once again, the layoffs were heavily concentrated in the industries that suffered the most, because it is the kind of contact with each other that is now almost impossible: restaurants, bars and hotels, theaters, sports arenas and concert halls.
As consumer spending habits change due to the virus, economists believe some of this service work will not return once the economy regains its position. This trend is likely to further increase the economic inequalities that millions of families have been unable to buy or pay for rent.
Typically in a recession, layoffs hit a wide range of industries – both those employing higher- and middle-income workers and those with lower-paid staff – because concerned consumers cut spending. Economists were worried that the same trend would appear this time.
Instead, it heals much of the rest of the economy, albeit slowly and fitly. Factories, although not completely restored, are dumping goods and have been adding jobs every month since May. Home sales have risen by 26% from a year ago, fueled by affluent people who can work from home and seek more space. This trend in turn has strengthened the more paying jobs in banking, insurance and real estate.
“Such differences in … job loss between the highest and lowest wage workers have almost certainly been unprecedented among U.S. recessions over the past 100 years,” said Brad Hershbein, an economist at the Upjohn Institute for Employment Research, and Harry Holzer. , an economist at Georgetown University, concluded in a new research article.
At first glance, the December job report issued by the government on Friday was sad: the economy lost 140,000 jobs. It was the sixth consecutive month in which rents fell from the previous month. Unemployment remained at a still high 6.7%.
But the negative number stems entirely from a brutal loss – nearly 500,000 jobs – in a category that includes restaurants, bars, hotels, casinos and entertainment.
State and local governments are also reducing workers. So do hair salons and other personal services. There were also layoffs in education.
Almost every other industry has added jobs. Construction earned 51,000, financial services 12,000. Transportation and warehousing businesses, beneficiaries of a boom in e-commerce and delivery services amid the pandemic, earned nearly 47,000.
Job losses were “certainly very strongly concentrated in certain industries – much more than previous recessions,” Hershbein said in an interview.
Once the coronavirus vaccines become more widespread, and the latest government aid package the economy is pumped up, most analysts expect a solid recovery to begin this summer. The incoming Biden government, along with a now fully democratically led House and Senate, is also likely to introduce additional bailouts and spending measures that could accelerate growth.
Economists note that the $ 2 billion aid package introduced by the government in March, which included generous unemployment benefits and aid to small businesses, did more to prevent redundancies from spreading than many analysts had expected.
But a major unknown oversight of the 2021 economy: Will the economic recovery be fast enough and robust enough to take many Americans who have lost jobs in the hospitality industry into more resilient sectors of the labor market?
For now, the resurgent pandemic has made consumers reluctant to shop, travel, eat out and congregate in crowds, leading states and cities to impose stricter limits on restaurants and pubs.
The trend has increased the lives of people like Brad Pierce of West Warwick, Rhode Island. Pierce gradually built up a career as a stand-up comedian, only to see it derailed by the pandemic and restrictions on the bars in which he performed.
Now he wonders if life will ever return. Even when the bars where Pierce worked were reopened, they could not offer live entertainment due to coronavirus restrictions. Some of these places, he fears, will not survive.
Pierce receives about $ 500 a week in unemployment benefits, and his wife still works as a health care technician – busier than ever because she does COVID-19 tests. Although he feels financially happy, the contrast sometimes depresses him.
“She works all the time while I can not work, and it’s a terrible feeling as a husband and a husband,” said Pierce, 40.
Meanwhile, there were strange performances for him here and there. The strangest was a get-up routine he did via Zoom for a company’s holiday party. He asked the employees to mute the muffler so he could hear them laughing, only to be hit by a cacophony of dogs barking, children screaming and TVs blaring.
He spent the rest of the concert watching his audience’s quietly moving lips to see if they might be laughing.
“I have days where I think it will come back, and days where I think, ‘Well, I think I’ll never work again,'” Pierce said.
Hershbein and Holzer’s research found that job losses were deeper among black and Hispanic workers than among whites, and also more pronounced for those with lower paying jobs. Hershbein found that the quarter of Americans with the lowest pay have sunk nearly 12% since February this year. Among the highest paid quarter, it should be less – 3.5%.
The number of white Americans with jobs has dropped by 6% since the pandemic; among black and Hispanic Americans, it is 10% lower, Hershbein said. This means that if a portion of the job losses pandemics become permanent, non-white workers will suffer the most.
Michelle Holder, an economist at John Jay College, noted that the two biggest sources of job losses among black women were cashiers in stores and restaurants, including fast food, and child care. She said she fears many of these jobs are unlikely to return, even if the pandemic disappears as the economy changes permanently.
Business travel is unlikely to return to its previous levels as more meetings are kept at a distance. Many healthcare appointments are now held online, reducing the need for some staff in doctor’s offices. This could end a ten-year narrowing of the black-and-white unemployment gap, as much lower-paid work is excessively held by black workers.
“There are significant changes in terms of where we work, what jobs will be available,” Holder said. “All of this will affect women, low-wage workers and people of color.”
As the pandemic recession rages, more small businesses need to close. This trend threatens to become a long-term loss in the labor market, as new businesses need to be created to take on many laid-off workers.
David Gilbertson, vice president of UKG, a company that makes time management software for employees, said that among its customers with less than 100 employees, 13% had now closed in March – more than double the figure in a typical year. Another round of small business loans, included in the $ 900 billion aid package approved last month, is crucial in preventing another wave of closures.
“They’ve come this far,” he said, “and now they’re about to close.”
Meanwhile, the struggling unemployed include people who have forged independent careers – people like Bryan Blew, who resigned his job as a equipment repairman in Kansas City a year ago to become a full-time musician in Las Vegas. Before the pandemic, Blew usually played bass guitar in bands at casinos, bars, and other venues a few nights a week. He’s not sure the Vegas music scene will ever return to what it was.
Blew, who has not played a concert since March, is now grappling with hopes of giving up hope of rebuilding his music career. Currently, he works as a delivery manager for a sandwich shop and earns $ 9 an hour before tips. He receives unemployment benefits depending on how much he earns with his job in a given week.
“Time will tell, I think,” said Blew, 46. “It was a difficult pill to swallow.”
___
Olson reports from New York.