WASHINGTON (AP) – Ten months after America’s viral outbreak, low-income workers continue to bear the brunt of job losses – an unusual and harsh feature of the pandemic recession that flattened the economy last spring.
In December, the nation quit its jobs for the first time since April. Again, the layoffs have focused heavily on the industries that have suffered the most, as they involve the kind of face-to-face contact that is almost impossible: restaurants, bars and hotels, theaters, sports arenas and concert halls.
With the transformation of the virus from consumer spending habits, economists believe that some of these jobs will not return even after the economy has regained its position. This trend is likely to further widen economic inequalities that have left millions of families unable to buy food or pay rent.
Usually in a recession, layoffs affect a wide range of industries – both those that hire higher and middle-income workers and those with lower-paid staff – as anxious consumers reduce spending. Economists feared that the same trend would emerge this time.
Instead, much of the rest of the economy heals if it is slow and appropriate. The factories, although not fully recovered, take out the goods and have added jobs every month of May. Home sales are up 26% from a year ago, fueled by wealthy people able to work from home looking for more space. This trend has in turn strengthened better paid jobs in the banking, insurance and real estate sectors.
“Such differences in … job losses among the highest and lowest paid workers are almost certainly unprecedented among the US recessions of the past 100 years,” said Brad Hershbein, an economist at the Upjohn Institute for Employment Research. Labor, and Harry Holzer, an economist at Georgetown University, concluded in a new research paper.
On the surface, the December job report released by the government on Friday was bleak: the economy lost 140,000 jobs. It was the sixth consecutive month in which employment fell from the previous month. Unemployment remained at 6.7%.
The negative number resulted entirely from a brutal loss – almost 500,000 jobs – in a category that includes restaurants, bars, hotels, casinos and entertainment.
State and local governments also reduce workers. So are hair salons and other personal services. There were also layoffs in education.
Almost any other industry has added jobs. Construction gained 51,000, financial services 12,000. Transportation and storage companies, benefiting from an increase in e-commerce and pandemic delivery services, earned nearly 47,000.
Job losses “have certainly been very concentrated in some industries – much more than previous recessions,” Hershbein said in an interview.
Once coronavirus vaccines are widely distributed and the latest government aid package is pumped into the economy, most analysts expect a solid recovery to kick in this summer. The upcoming Biden administration, along with a House and Senate now fully led by Democrats, will also support additional bailout aid and spending measures that could accelerate growth.
Economists note that the $ 2 trillion aid package the government adopted in March, which included generous unemployment benefits and aid for small businesses, has done more to prevent the spread of layoffs than many expected. analysts.
But an unknown sea surpasses the economy in 2021: Will the economic recovery come fast enough and robust enough to absorb many Americans who have lost jobs in the hotel industry in more resilient sectors of the labor market?
For now, the invigorating pandemic has made consumers reluctant to shop, travel, dine and gather in crowds, and has led states and cities to restore stricter limits for restaurants and bars.
The trend has turned the lives of people like Brad Pierce in West Warwick, Rhode Island. Pierce gradually built a career as a backup comedian, only to see her derailed by the pandemic and restrictions on the bars where she played.
Now he wonders if life will ever return. Even when the bars where Pierce worked reopened, they could not offer live entertainment due to coronavirus restrictions. It is feared that some of these places will not survive.
Pierce receives about $ 500 a week in unemployment benefits, and his wife continues to work as a health technician – busier than ever because she runs COVID-19 tests. Although he feels financially lucky, the contrast sometimes depresses him.
“He works all the time, while I can’t work, and it’s a terrible feeling as a husband and wife,” said Pierce, 40.
Meanwhile, there have been strange concerts for him here and there. The strangest thing was a stand-up routine he did through Zoom for a company’s holiday party. He asked the employees to turn off the sound so they could hear them laughing, only to be hit by a cacophony of barking dogs, screaming children and screaming TVs.
He spent the rest of the concert watching the audience’s silent, moving lips to see if he could laugh.
“I have days when I think he’ll come back and days when I think, ‘Well, I don’t think I’ll ever 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. Employment among the lowest paid a quarter of Americans fell by almost 12% since February this year, Hershbein found. In the highest paid quarter, it fell should be lower – 3.5%.
The proportion of white Americans with jobs has fallen by 6% since the pandemic; Among black and Hispanic Americans, it fell 10 percent, Hershbein said. This means that as some of the pandemic job losses become permanent, non-white workers will be the most injured.
Michelle Holder, an economist at John Jay College, noted that the two biggest sources of job losses among black women were store and restaurant cashiers, including fast food and childcare. She said she fears many of these jobs will not return, even as the pandemic fades as some changes in the economy become permanent.
Business travel is unlikely to return to its previous levels, as several meetings take place remotely. Many health care appointments are now held online, reducing the need for employees in doctors’ offices. This could end a decade-long reduction in black-and-white unemployment, given that many lower-paying jobs are disproportionately held by black workers.
“There are significant changes in 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 recession pandemic erupts, more small businesses have been forced to close. This trend threatens to become a long-term obstacle to the labor market, as new companies will have to be set up to absorb many redundant workers.
David Gilbertson, vice president at UKG, a company that produces time management software for employees, said that among his company’s customers with fewer than 100 employees in March, 13% have now closed – more than double the number in a a typical. Another round of small business lending, included in the $ 900 billion aid package approved last month, will be crucial in preventing another wave of closures.
“They’ve come this far,” he said, “and now I’m about to close.”
Meanwhile, unemployed people struggling include people who have forged independent careers – people like Bryan Blew, who quit his job as an equipment repairman in Kansas City a year ago to become a full-time musician in Las Vegas. Vegas. Before the pandemic, Blew used to play the bass guitar in casinos at casinos, bars and other places a few nights a week. It’s not certain that the Vegas music scene will ever return to what it was.
Blew, who has not played a concert since March, is now struggling to give up hope of rebuilding his music career. For now, she works as a delivery driver for a sandwich shop, earning $ 9 an hour before advice. 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 hard pill to swallow.”
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Olson reported from New York.