WASHINGTON (AP) – Ten months after US viral outbreak, low-income workers continue to bear the brunt of job losses, an unusual and hard feature of the pandemic recession that flattened the economy in the spring past.
In December, the nation launched jobs for the first time since April. Once again, the layoffs focused heavily on the industries that have suffered the most because they involve the kind of face-to-face contact that is now almost impossible: restaurants, bars and hotels, theaters, sports venues and concert halls.
With the virus transforming consumer spending habits, economists believe some of these service jobs will not return even after the economy has regained its footing. This trend is likely to further increase the economic inequalities that have left millions of families unable to buy food or pay rent.
Typically, in a recession, layoffs affect a wide range of industries, both those that employ higher- and middle-income workers and those with poorly paid staff, as anxious consumers reduce spending. Economists had worried that this time the same trend would emerge.
Instead, much of the rest of the economy is cured, slowly and adequately. Although the factories, although not fully recovered, are withdrawing goods and since May have added jobs every month. Home sales have increased by 26% over a year ago, driven by affluent people able to work from home and looking for more space. This trend, in turn, has bolstered higher-paying jobs in banking, insurance and real estate.
“These differences in … job losses among higher- and lower-wage workers are almost certainly unprecedented among U.S. recessions over the past more than 100 years,” said Brad Hershbein. economist at the Upjohn Institute for Employment Research and Harry Holzer, an economist at Georgetown University, concluded in a new research paper.
On the surface, the December job report the government issued on Friday was sad: the economy lost 140,000 jobs. It was the sixth consecutive month in which recruitment has been reduced compared to the previous month. Unemployment remained stagnant at 6.7% still high.
But the negative number arose entirely from a brutal loss (about 500,000 jobs) in a category that includes restaurants, bars, hotels, casinos and entertainment.
State and local governments are also cutting back on workers. So did the hair salons and other personal services. There were also layoffs in education.
Almost any other industry added jobs. Construction earned 51,000 and financial services 12,000. Transportation and storage companies, benefiting from an increase in e-commerce and delivery services amid the pandemic, earned about 47,000.
Hershbein said in an interview that “job losses” have definitely focused on some industries, much more than previous recessions. “
Once coronavirus vaccines are more widely distributed, and the latest government aid package is pumping into the economy, most analysts expect a solid recovery to begin this summer. The Biden administration, along with a now fully democratic House and Senate, will also likely push for additional bailout aid and spending measures that could accelerate growth.
Economists point out that the $ 2 trillion aid package the government enacted in March, which included generous unemployment benefits and aid to small businesses, did more to prevent the spread of layoffs than many analysts expected.
But a big unknown overcomes the 2021 economy: will the economic recovery come quickly enough and be solid enough to absorb many of the Americans who lost jobs in the hospitality industries in more resilient sectors of the labor market?
So far, the resurgent pandemic has made consumers reluctant to shop, travel, dine and gather in crowds and has led states and cities to re-impose stricter limits on restaurants and bars.
The trend has turned the lives of people like Brad Pierce of West Warwick, Rhode Island upside down. Pierce had been building a career as a standing comedian, only to see her derailed by the pandemic and the restrictions on the bars where she acted.
Now, he wonders if this life will ever come back. Even when the bars where Pierce worked had reopened, they could not offer live entertainment due to coronavirus restrictions. Some of these spaces, he fears, 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 administers COVID-19 tests. Although he feels financially fortunate, the contrast sometimes depresses him.
“She works all the time, while I can’t work, and it’s a terrible feeling as a husband and spouse,” Pierce, 40, said.
Meanwhile, there have been weird gigs here and there. The weirdest thing was a stand-up routine he did using Zoom for a company’s holiday party. He asked employees to shut up so he could hear them laughing, only to be run over by a cacophony of barking dogs, children screaming and TVs screaming.
He spent the rest of the concert watching his audience’s silent lips to see if they could laugh.
“I have days when I think he’ll come back and days when I think,‘ Well, I guess I’ll never work again, ’Pierce said.
Hershbein and Holzer’s research found that job loss has been deeper among black and Hispanic workers than among white workers and has also been more pronounced for those working with lower pay. Hershbein found that employment in a quarter of the highest paid Americans has plunged nearly 12 percent since February this year. Among the highest paid quarters, decreased should be less than 3.5%.
The proportion of white Americans with jobs has fallen 6% since the pandemic; among blacks and Hispanic Americans, it has dropped 10 percent, Hershbein said. This means that as part of the pandemic job loss becomes permanent, non-white workers will be the hardest hit.
Michelle Holder, an economist at John Jay College, noted that the two largest sources of job loss among black women have been store and restaurant cashiers, including fast food and daycare services. He said he fears many of these jobs will probably not return even when the pandemic fades as some changes in the economy become permanent.
Business trips are unlikely to return to previous levels, as more remote meetings are held. Currently, many medical consultations are conducted online, thus reducing the need for some employees in medical offices. This may end in a reduction in the black-and-white unemployment gap for a decade, as many less paid jobs are disproportionately occupied by black workers.
“There are significant changes as to 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 lasts, they have been forced to close smaller businesses. This trend threatens to become a long-term drag on the labor market, as new companies will have to be created to absorb many laid-off workers.
David Gilbertson, vice president of UKG, a company that manufactures 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 of the usual one-year figure. Another round of small business lending, included in the $ 900 billion aid package approved last month, will be crucial in helping prevent another wave of closures.
“They’ve gotten this far,” he said, “and now they’re on the verge of having to close.”
Meanwhile, the unemployed include people who had forged independent careers – people like Bryan Blew, who left his job as a team repairman in Kansas City a year ago to become a full-time musician in Las Vegas. Prior to the pandemic, Blew used to play bass in groups of casinos, bars and other venues several nights a week. He’s not sure the Las Vegas music scene will ever return to what it was.
Blew, who hasn’t played any gigs since March, is now struggling to give up hope of rebuilding his music career. At the moment, he works as a delivery driver for a sandwich shop and earns $ 9 an hour before tipping. You receive an unemployment benefit, depending on how much you earn from your job in a given week.
“Time will tell, I guess,” Blew, 46, said. “It’s been a hard pill to swallow.”
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Olson reported from New York.