Washington University in St. Louis

Black and Hispanic women, less educated workers among those hardest hit by COVID-19 job losses

New research illustrates recession employment inequality in U.S.

Newswise — Unemployment fell to 6% in March, according to an April 2 U.S. Department of Labor report. The strongest gains were in leisure and hospitality and construction. The news was better than expected, but aggregated data doesn’t always tell the full story according to economists at Washington University in St. Louis. The unemployment rate in March for white Americans was 5.4% while it was 9.6% for Black Americans.

Generally speaking, recessions disproportionately hurt economically disadvantaged groups. The current recession created by the COVID-19 pandemic is no exception. It has especially impacted women — particularly Black and Hispanic women — and less educated workers, magnifying existing U.S. employment inequality, according to new research conducted by Steven Fazzari, the Bert A. and Jeanette L. Lynch Distinguished Professor of Economics in Arts & Sciences, and senior Ella Needler, an economics major and a student in the Olin Business School.

And the effects of this inequality will likely be felt long after the recession both in terms of employment and economic growth.

“Unemployment creates economic hardship and psychological stress for individuals and families,” said Fazzari, who also directs the Weidenbaum Center on the Economy, Government and Public Policy at Washington University. “Of course, unemployment wastes valuable productive resources. But inequalities in the way recessions destroy jobs magnify the personal and social costs.”

Fazzari and Needler developed a novel tool to measure inequality — what they label “job-months lost” — that captures both how much employment declines during a recession and the persistence of those declines to compare the inequality in U.S. employment across social groups during the Great Recession and the year-plus-long COVID-19 pandemic.

“There’s a tendency to consult aggregated data when interpreting the state of the economy,” Needler said. “But aggregated data can hide disproportionate effects that impact important groups.”

Their research exposes the unequal ways in which the recession has impacted women, lower income and minority workers. It also makes the case that policies designed to stimulate the economy should provide disproportionate relief for those most hurt by the pandemic.  

Comparing job losses during the Great Recession and COVID-19

The research showed a significant shift of job losses from men in the Great Recession to women in the current economic crisis induced by the pandemic. The 2008-09 recession hit manufacturing and residential construction employment particularly hard, both sectors in which men constitute a much larger share of employment than women. In contrast, COVID-19 hit service jobs particularly hard in industries such as restaurants, travel and health care — all sectors in which women hold a larger share of the jobs. Women have also been disproportionately affected by additional childcare duties as COVID-19 shut down schools and childcare centers.

In both recessions, white workers fare better than Asian, Black and Hispanic employees. However, the COVID-19 pandemic — in their words — “decimated” Black and Hispanic women’s employment with their share of job-months lost 42% and 60% higher, respectively, than would be expected given the share of these groups in the February 2020 employment. Asian women had severe job-months lost in the COVID-19 months, but they also suffered inequality in the Great Recession.

The research also showed young workers suffered disproportionate, and similar, job losses in both recessions. Middle-age workers have been affected less severely in the COVID-19 crisis than in the Great Recession, while older workers have done much worse during COVID-19 compared with their experience amid the Great Recession.

Less educated workers have suffered dramatically more employment loss due to COVID-19 than more educated groups: For workers with less than a high school education, job-months lost were nearly double their share in pre-pandemic employment; losses for college graduates were half as large as their employment share. Inequality across education groups in the Great Recession was far less pronounced.

“Less educated workers are more concentrated in sectors such as restaurants, hospitality and retail that have been decimated by the public health crisis,” Fazzari said. “These jobs also cannot be done remotely. In contrast, college-educated workers are much more likely to be able to work from home. When more educated and relatively affluent people stop going out to restaurants and stop shopping to protect their health, it is the less educated, lower-income people who lose their jobs.”

Long-term impact of unemployment

Even with the job gains in March, Needler points out total employment “is still 8.4 million jobs below what is was in February 2020 and 55 percent of these remaining losses are women.” Permanent job losses and detachment from the labor force during the COVID-19 crisis will likely have widespread effects on employment prospects for years to come, and these effects will be greater for disadvantaged groups, she emphasized.

“For all workers, unemployment and time out of the labor force compromises future employment and wage prospects.”

Steven Fazzari

“For all workers, unemployment and time out of the labor force compromises future employment and wage prospects,” Fazzari said. “Perhaps the unusual circumstances of the COVID-19 crisis will mitigate the stigma of unemployment for job searchers, but longer-term negative consequences are likely. And, because of the great inequality in COVID-19 job losses, any unemployment stigma will be highly unequal.”

Impact of inequality on economy

Shifting focus to the broader economy, the rising inequality created by the COVID-19 pandemic has decreased consumption and demand. The primary reason is simple: high income groups recycle less of their income back into consumption than those with moderate or low incomes, Fazzari said.  

If the unequal employment effects drag on, it has the potential to slow economic growth.

“The connection between recessions, inequality and macroeconomic policy has another, somewhat more subtle, implication,” the authors write. “Our results demonstrate how individuals and families in lower socio-economic circumstances suffer more severe effects from the recession. The goal of social equity, therefore, implies they should receive disproportionate relief from policies designed to stimulate the aggregate economy.




Filters close

Showing results

110 of 5640
Released: 15-May-2021 8:05 AM EDT
Rutgers Reports First Instance of COVID-19 Triggering Recurrent Blood Clots in Arms
Rutgers University-New Brunswick

Researchers at Rutgers Robert Wood Johnson Medical School are reporting the first instance of COVID-19 triggering a rare recurrence of potentially serious blood clots in people’s arms.

access_time Embargo lifts in 2 days
Embargo will expire: 20-May-2021 10:00 AM EDT Released to reporters: 14-May-2021 2:40 PM EDT

A reporter's PressPass is required to access this story until the embargo expires on 20-May-2021 10:00 AM EDT The Newswise PressPass gives verified journalists access to embargoed stories. Please log in to complete a presspass application. If you have not yet registered, please Register. When you fill out the registration form, please identify yourself as a reporter in order to advance to the presspass application form.

Released: 14-May-2021 11:25 AM EDT
Access to overdose-reversing drugs declined during pandemic, researchers find
Beth Israel Lahey Health

In a new study, clinician-researchers at Beth Israel Deaconess Medical Center (BIDMC) analyzed naloxone prescription trends during the COVID-19 pandemic in the United States and compared them to trends in opioid prescriptions and to overall prescriptions.

Released: 14-May-2021 11:00 AM EDT
No Excuses: Stop Procrastinating on These Key Health Checks
Michigan Medicine - University of Michigan

A quick guide to the most-valuable preventive care that adults need to get scheduled, to catch up on what they may have missed during the height of the pandemic, and to address issues that the pandemic might have worsened.

Released: 13-May-2021 7:05 PM EDT
FLCCC Statement on the Irregular Actions of Public Health Agencies & the Disinformation Campaign Against Ivermectin
Front Line COVID-19 Critical Care Alliance (FLCCC Alliance)

FLCCC Alliance calls for whistleblower to step forward from within WHO, the FDA, the NIH, Merck, or Unitaid to counter this misrepresentation

Newswise: shutterstock_1724336896.jpg
Released: 13-May-2021 12:55 PM EDT
Kreuter receives $1.9 million in grants to increase vaccinations in St. Louis
Washington University in St. Louis

Matthew Kreuter, the Kahn Family Professor of Public Health at the Brown School, has received $1.9 million in grants to help increase COVID-19 vaccinations among Blacks in St. Louis City and County.

Released: 13-May-2021 11:35 AM EDT
COVID-19 mRNA Vaccines are Immunogenic in Pregnant and Lactating Women, Including Against Viral Variants
Beth Israel Deaconess Medical Center

In a new study from Beth Israel Deaconess Medical Center researchers evaluated the immunogenicity of COVID-19 mRNA vaccines in pregnant and lactating women who received either the Pfizer or Moderna COVID-19 vaccines. They found that both vaccines triggered immune responses in pregnant and lactating women.

Released: 13-May-2021 10:30 AM EDT
Pandemic stigma: Foreigners, doctors wrongly targeted for COVID-19 spread in India
Monash University

The Indian public blamed foreigners, minority groups and doctors for the rapid spread of COVID-19 across the country during the first wave, due to misinformation, rumour and long-held discriminatory beliefs, according to an international study led by Monash University.


Showing results

110 of 5640

close
3.06653