Older workers are voting with an eye on the economy
Recent polls have shown that older Americans and women appear to have turned against President Trump, and the reasons aren’t hard to grasp. The administration’s mishandling of the COVID-19 pandemic has been especially deadly for older Americans, while women have borne the brunt of the economic downturn, with greater job losses and caregiving responsibilities.
One factor has received less attention: Older Americans, too, have been hard hit in the economic downturn. Senior women (women ages 65 and older) have seen a steep decline in employment—almost as steep as that of young women just entering the labor force (see Table 1). Senior men also saw a steep decline in employment early in the pandemic but rebounded faster than senior women.
Heading into election day, at least 30 million workers are being hurt by the coronavirus recession
One of the most frequent questions I’ve gotten in the last few months is, “How many workers are being hurt by the coronavirus recession?” There is a huge amount of confusion about this because two major, completely separate, government data sets that address this question are reporting very different numbers. Specifically, the Bureau of Labor Statistics (BLS) reported that the official number of unemployed workers in September, from the Current Population Survey, was 12.6 million (September is the latest data available; October numbers will be released this Friday). But during the reference week for the September monthly unemployment figure—the week ending September 12—the Department of Labor (DOL) reported that there were a total of 26.5 million people claiming unemployment insurance (UI) benefits. The UI number is compiled by DOL from reports it receives from state unemployment insurance agencies.
What is going on? In a nutshell: The BLS official number of unemployed workers vastly understates the number of workers who have faced the negative consequences of the coronavirus recession, and DOL’s UI number overstates the number of workers receiving unemployment benefits.
Let’s first look at UI. An important way the numbers coming out of DOL are overstating the number of people receiving UI benefits right now has to do with delays in the processing of applications (delays caused by the overwhelming number of applications UI agencies have received during the COVID-19 crisis). When a worker’s benefits are delayed, they are paid retroactively. This is as it should be, but it causes reporting problems. Say a worker claims UI benefits not just for their most recent week of unemployment, but also for the six prior weeks. That worker will show up in the data not as one person who claimed seven weeks of benefits, but as seven claims. Nobody knows how extensive that problem is, but this New York Times article has good information on it. Another issue is that state UI agencies have been the target of fraud—not individuals filing one or two fraudulent claims, but sophisticated cyberattacks involving extensive identity theft and the overriding of security systems. Note: None of this negates the fact that the expansions of unemployment insurance in the CARES Act were an enormous success! These expansions have been a lifeline to millions and a crucial boost to the economy.
Moral policy = good economics: What’s needed to lift up 140 million poor and low-income people further devastated by the pandemic
Seven months into a global pandemic, U.S. families are suffering: 225,000 lives have been lost, 30 million workers have lost either jobs or significant hours of work, nearly every state is facing sharp drops in revenue that will threaten even more cuts to essential social programs and jobs, and the U.S. economy remains deeply depressed, and a reentry into outright recession in coming months is highly possible.
There is no mystery about what has brought us to this point. The immediate cause of the economic crisis we face is the fallout of the pandemic and the Trump administration’s failed response. As social distancing measures were enacted to slow the spread of the coronavirus, economic activity collapsed. A burst of new activity has accompanied some reopenings, but now, because the government has failed to curb the pandemic and failed to enact a just response, the economy is plunging deeper into crisis.
This all is taking place in a society that was already deeply unequal. Before the pandemic, 140 million people were poor or one emergency away from being poor, including approximately 60% of Black, non-Hispanic people (26 million); 64% of Hispanic people (38 million); 60% of indigenous people (2.15 million); 40% of Asian people (8 million); and 33% of white people (66 million).
The pandemic spread and deepened along the fissures of that inequality and the inadequate public policies that existed prior to the pandemic. It is no surprise that 8 million people were pushed below the poverty line in the past five months as COVID-19 economic disruptions continued.
Senate Republicans have failed struggling families: It is cruel, and bad economics, to withhold stimulus aid
Another 1.1 million people applied for unemployment insurance (UI) benefits last week, including 751,000 people who applied for regular state UI and 360,000 who applied for Pandemic Unemployment Assistance (PUA). PUA is the federal program for workers who are not eligible for regular unemployment insurance, like gig workers. It provides up to 39 weeks of benefits, but it is set to expire at the end of this year.
The 1.1 million who applied for UI last week was a decline of just 25,000 from the prior week’s revised figures. Last week was the 32nd straight week total initial claims were far greater than the worst week of the Great Recession. (If that comparison is restricted to regular state claims—because we didn’t have PUA in the Great Recession—initial claims last week were still 3.7 times where they were a year ago.)
Most states provide 26 weeks (six months) of regular benefits, and this crisis has gone on much longer than that. That means many workers are exhausting their regular state UI benefits. In the most recent data, continuing claims for regular state UI dropped by 709,000, from 8.5 million to 7.8 million.
Fortunately, after an individual exhausts regular state benefits, they can move onto Pandemic Emergency Unemployment Compensation (PEUC), which is an additional 13 weeks of regular state UI. However, in the latest data available for PEUC (the week ending October 10) PEUC rose by “just” 387,000 to 3.7 million, offsetting only 42% of the 921,000 decline in continuing claims for regular state benefits for the same week. The small increase in PEUC relative to the decline in continuing claims for regular state UI is likely due in large part to delays workers are facing getting onto PEUC, including workers either not being told about PEUC or not being told that they have to apply for it (states are required to notify eligible workers, but it may not be happening). Further, many of the roughly 2 million workers who were on unemployment insurance before this recession began, or who are in states with less than the standard 26 weeks of regular state benefits, are exhausting PEUC benefits.
Counties that pivoted to Trump had lower wage growth than other counties
In the home stretch to next week’s election, a number of articles have attempted to rebut claims that the Trump administration has practiced “phony” populism. But the only piece of real-world evidence these articles cite to defend the Trump administration’s record in helping working-class voters turns out to be either false or highly misleading.
Specifically, one of the articles defending the Trump record, by Alan Tonelson, highlights wage growth in “pivot counties”—counties that voted for Obama twice but then voted for Trump—and claims that “Average annual private-sector pay in most of these [pivot] counties rose faster during the first three years of the Trump administration than during the last three years of the [sic] Mr. Obama’s presidency.”
In Tonelson’s telling, this wage growth justifies the vote-flipping in those counties between Obama and Trump because the Trump administration has done something that has boosted wage growth in these presumably blue-collar counties. But Tonelson’s analysis is wrong, for a number of reasons.
First, our calculations show that pivot counties didn’t see faster wage growth on average. As Figure A shows, between 2013 and 2016 average real annual pay in pivot counties grew by 4.3%, and between 2016 and 2019 these pivot county average earnings grew by just 2.2%. In all other (nonpivot) counties, the slowdown in earnings growth was smaller: Average earnings grew by 4.0% in the first period and then 3.1% in the second period.
Latina Equal Pay Day: Essential Latina workers face substantial pay gap during COVID-19 pandemic
October 29 is Latina Equal Pay Day, marking how far into 2020—nearly 11 months—the typical Latina must work to make the same amount as the typical non-Hispanic white man was paid in 2019. Latina workers are paid just 67 cents on the dollar on an average hourly basis, relative to non-Hispanic white men with the same level of education, age, and geographic location.
Although this alarming and unacceptable pay gap persists even in better economic times, it is particularly outrageous during the current public health and economic crisis, when many Latinas are essential workers. The infographics below take a closer look at average hourly wages of Latinas and non-Hispanic white men employed in major occupations at the center of national efforts to address COVID-19. These occupations include front-line workers in health care and essential businesses like grocery stores, those who have borne the brunt of job losses in the restaurant industry, and teachers and child care workers who have been all but abandoned in the U.S. coronavirus response. We find that Latinas make 6% to 32% less than non-Hispanic white men in these occupations.
Debunking the specious claims underlying Missouri’s anti–collective bargaining law
Next month, the Missouri Supreme Court will hear arguments in a case about collective bargaining for public-sector workers in Missouri. With collective bargaining rights enshrined in the state’s constitution, the case revolves around whether onerous restrictions placed on public-sector unions and collective bargaining in a 2018 law unconstitutionally infringe on those rights. EPI has filed a friend of the court (“amicus curiae”) brief in the case to debunk some of the specious claims used by proponents of the law and to show how the law will hurt workers, employers, communities, and the economy.
EPI’s brief shows how weakening collective bargaining rights for public-sector workers will worsen the pay gap that women workers and workers of color face when their wages are compared with those of white men. We cite a new study documenting that Wisconsin went from having no wage gap to having a significant wage gap after state legislators and then-governor Scott Walker weakened the state’s public-sector collective bargaining law. EPI’s brief also explains how weakening collective bargaining rights deprives workers of due process and a proven means for challenging arbitrary or discriminatory treatment.
One of the most problematic provisions in the Missouri law requires public-sector unions to be recertified every three years. A majority of the bargaining unit (not just a majority of voting bargaining unit members) would need to vote to affirm their support for the union. This requirement would force public-sector unions, already burdened by the U.S. Supreme Court’s Janus decision, to expend scarce resources turning out members for a vote every three years.
The recertification requirement is unnecessary because under Missouri law, like other collective bargaining laws, workers have the right to file for a decertification vote if they want to initiate a vote on whether to keep their union. One pretext used by proponents of the recertification requirement is that the workforce in three years may not resemble the workforce today due to employee turnover. This argument ignores the fact that turnover in the public sector is roughly half that of the private sector. EPI’s brief includes these statistics and explains why the recertification requirement is unnecessary.
Black, Hispanic, and young workers have been left behind by policymakers, but will they vote?
EPI research finds that Black, Hispanic, and young workers are among those hit hardest by the COVID-19 recession—facing unemployment rates higher than what white workers and older workers are facing, with fewer resources to fall back on. The resulting economic challenges—including food insecurity and the threat of eviction, among others—will compound if additional relief doesn’t come soon. In addition to economic threats, the health threats of the coronavirus pandemic have affected communities of color far worse than white communities.
Young adults and Black and Hispanic citizens have also been historically underrepresented at the polls, for a variety of reasons that we explore below. But could that change in 2020?
Historical voting trends among the Black, Hispanic, and young adult populations
Black voters have faced a 150-year struggle against voter intimidation and suppression tactics and the multilayered legacies of slavery. Black Americans are also disproportionately disenfranchised by state laws that ban convicted felons from voting—even, in some states, after they have served their full sentence. Given the U.S.’s high incarceration rate and systemic racism in the criminal justice system, this is just one more way the Black vote is suppressed.
Black voter registration and participation rose after the passage of the Voting Rights Act of 1965; while Black voting rates would continue to lag behind white voting rates, the gap had narrowed significantly—particularly in the South. In 2008, the gap essentially closed, and in 2012, Black voting rates exceeded white voting rates (Figure A). However, Black voting rates dipped below white voting rates in the 2016 presidential election, as reports of voter suppression and intimidation increased relative to previous elections.
Curb your enthusiasm: Rapid third-quarter GDP growth won’t mean the economy has healed
On Thursday, the Bureau of Economic Analysis (BEA) will release data showing the growth rate of gross domestic product (GDP) in the third quarter of 2020. GDP is the broadest measure of the nation’s economic activity, and this is the last major data release before the presidential election, so it would be a big deal even in normal years.
But it’s obviously not a normal year, and the GDP data released on Thursday will be for a quarter following the single fastest contraction of GDP in history, when the economy shrank at an annualized rate of 31.4% in the second quarter of 2020 due to the COVID-19 shock. The third-quarter data will show historically fast GDP growth—it could conceivably even see growth at a 31.4% annualized rate, for example. Some might be tempted to take too much solace in this rapid growth, and if growth in the third quarter looks to match the pace of contraction in the second quarter, some might even be tempted to declare the economic crisis nearly over.
This post highlights some reasons to temper enthusiasm (some that overlap with points made in this excellent Vox post), even in the face of a very large third-quarter growth number. There are five main reasons that I detail further below:
- The enormous contraction of GDP in the second quarter means any growth in the third quarter is coming off of a significantly smaller base of GDP.
- The COVID-19 shock caused rapid contraction of the economy even in the first quarter of 2020—so it’s not just the record-setting contraction of the second quarter that needs to be clawed back.
- It’s not just the level of pre-shock GDP that needs restored to make labor markets healthy; it’s the level this GDP would be at if it had continued to grow at its pre-shock rate.
- Because the COVID-19 shock has been so centered in low-wage sectors, any given dollar value of GDP lost translates into far more people who have lost jobs.
- Third-quarter growth was driven by the momentum of economic reopening and occurred with the tailwind of the generous recovery measures included in the CARES Act. Neither of these boosts will help in the future, absent radical policy change.
Fact-checking resources for the 2020 presidential debates
Before the candidates take the stage for the 2020 presidential debates, EPI has compiled resources that could be helpful in fact-checking the economic and political claims that are made. We’ve broken down our research into several themes and have highlighted some of our most important research in each area:
Workers most hurt by COVID-19
- Black workers face two of the most lethal preexisting conditions for coronavirus—racism and economic inequality
Persistent racial disparities in health status, access to health care, wealth, employment, wages, housing, income, and poverty all contribute to greater susceptibility to the virus—both economically and physically. - Latinx workers—particularly women—have faced some of the most damaging economic and health effects of the coronavirus
As a group, Latinx workers face a double bind: They are the least likely to be able to work from home to avoid coronavirus exposure and the most likely to have lost their job during the COVID-19 recession.