August 05, 2020

Gender, Ethnicity, and the COVID Recession

Author photoBy Karen Sternheimer

The recent economic downturn has impacted millions of Americans. As of this writing, about 30 million Americans are collecting unemployment benefits. Those earning less than $40,000 have endured the greatest job losses; according to the Federal Reserve, 40 percent of these workers have lost their jobs in recent months. In contrast, just over one in ten households earning more than $100,000 have experienced job losses.

You might have seen news reports that women have been more likely to experience job losses during the current recession. The Great Recession of a decade ago hit construction and finance particularly hard, and came to be known as a “mancession” because those fields tend to be male dominated.

With industries such as leisure and hospitality and retail particularly hard-hit by the pandemic, low-wage workers are bearing a disproportionate burden. Jobs categorized by the Bureau of Labor Statistics (BLS) as “social assistance” positions, which include occupations like childcare workers and home health aides, have an 18.3% unemployment rate for women, and 7.5% for men (the vast majority of workers in this category are women). By contrast, in 2019 the unemployment rate for “social assistance” jobs was just over 5% for both men and women.

According to the BLS, the U.S. unemployment rate was 12.9% at the end of June 2020. Women’s unemployment rate was 14.0%, while men’s was 11.9%. These numbers only tell part of the story.

Black, Asian American, and Latinx women have significantly higher unemployment rates. While 13.3% of white women were unemployed at the end of June 2020, 15.8% of Asian American, 16.1% of Black and 18.7% of Latinx women experienced unemployment. All groups experienced double-digit unemployment increases compared with June 2019.

These disparate impacts reveal one common denominator: women, particularly women of color, comprise a large share of low wage workforce. According to this 2019 Brookings Institute Report:

Low-wage workers are a racially diverse group, and disproportionately female. Fifty-two percent are white, 25% are Latino or Hispanic, 15% are Black, and 5% are Asian American. Both Latino or Hispanic and Black workers are overrepresented relative to their share of the total workforce, while whites and Asian Americans are under-represented. Females account for 54% of low-wage workers, higher than their total share of the workforce (48%).

According to this Kaiser Family Foundation report, low-wage workers face greater health risks if they are still working, and if not, are less likely to have health coverage or be able to afford co-pays for health care. Not surprisingly, they are also unlikely to have financial resources to weather the downturn, based on 2018 data:

Reflecting their more limited incomes, high shares of low-wage workers reported day-to-day financial concerns (on top of concerns over affording health care) even before COVID-19, with over a third saying they were very or moderately worried about paying monthly bills; three in ten expressing worry over paying rent or mortgage; and nearly one in six saying they were worried about meeting minimum payments on credit cards.

Contrary to the popular belief that minimum wage workers are mostly teenagers, the BLS reported in 2018 that 4 out of 5 minimum wage workers are 20 or older, with nearly 38% over age 25. The Brookings Institute report also indicates that about 40 percent of low-wage workers have children and many are primary earners:

Half of low-wage workers are primary earners or contribute substantially to family living expenses. Twenty-six percent of low-wage workers are the sole earners in their families, with median family earnings of $20,400. Forty-four percent of this group live below 150% of the federal poverty line, and half of sole earners are caring for children.

Childcare has been and remains a challenge for low-wage workers, especially for single parents. With many schools transitioning to online platforms, the burden has expanded to include home schooling, an added challenge in households that lack Internet access or adequate technology.

If there has been a silver lining to this recession, it has been an increased awareness of the importance of workers in retail, particularly those working at grocery stores, as delivery workers, and as rideshare drivers. Grocery clerks and food delivery workers have even been called heroes since the pandemic began, (and even received a raise in wages called “hero pay” for a few months).

Perhaps these workers, who are more likely to be female and persons of color, and have been taken for granted by the public and seen as disposable by employers, might even be appreciated more and compensated better going forward.

Debates surrounding the additional $600 per week in unemployment benefits that Congress approved as part of the CARES Act highlights the disparities between low-wage work and what constitutes living wages. While critics argued that the extra $600 was too high, as some workers received more than they earned before the pandemic, it is a reminder that earning $290 a week—the federal minimum wage of $7.25 an hour for 40 hours per week before taxes—is unsustainable for so many families.


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