What to Watch on Jobs Day: Widespread economic pain continues in August

Rent was due again this week and millions of unemployed workers have now gone five weeks without the enhanced $600 unemployment insurance benefit. This benefit was a vital lifeline and families across the country now face eviction and hunger in its absence. The drop in benefits will also make it far harder in coming months to claw back the jobs lost during the pandemic. As of the latest data, the labor market remains 12.9 million jobs below where it was in February, before the pandemic spread. And, the job gains we saw this summer slowed down remarkably in July, as a resurgence of the coronavirus re-shuttered part of the country. On Friday, the latest jobs data will tell us about the state of the labor market for August and how workers continue to fare in these difficult times.

Time and time again we learn how the recession has magnified the economic disparities many face in the U.S. labor market, whether it be by race, ethnicity, gender, age, education, or class. Women workers were disproportionately affected at the beginning of the recession with job losses in excess of their share of the workforce. In particular, Latina workers saw their unemployment rates skyrocket, exceeding 20% in March. Black workers also experienced devastating job losses, which they were less able to weather because of historical inequalities in employment, wages, and incomes, and, in particular, lower levels of liquid savings to fall back on. Black workers are also more likely to be unemployed. Historically, Black workers have been less likely to receive unemployment benefits after losing a job. However, the expanded eligibility criteria included in the CARES Act has been a great equalizer in the current downturn—though these expanded criteria will cut off at the end of this year. Further, as shown in the figure below, Black men have yet to see much in the way of job gains in the recovery thus far. Young workers are also experiencing unprecedented levels of unemployment, and will likely face significant aftershocks from starting their careers at such a difficult time (more on this in a forthcoming EPI report).

A more comprehensive look at unemployment rates: Unemployment rates for select workers by race, ethnicity, and gender, February – September 2020

February March April May June July August September
White men  2.9% 3.7% 12.4% 10.7% 9.0% 8.3% 6.9% 6.5% 
White women  2.8%  3.6% 15.0% 13.1% 10.3% 9.6% 7.3% 6.9% 
Black men 5.8% 7.0% 16.1% 15.5% 16.3% 15.2% 13.2% 12.6%
Black women 4.8% 5.2% 16.4% 16.5% 14.0% 13.5% 12.0% 11.1%
Latino men 3.2% 5.1% 16.7% 15.1% 12.8% 11.4% 9.8% 8.7%
Latina women 4.9% 6.0% 20.2% 19.0% 15.3% 14.0% 10.5% 11.0%

 

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Note: Workers, age 20 years and over. Race and ethnic categories are not mutually exclusive. White and Black data do not exclude Latinx workers of each race. Unemployment levels are labeled for February, the current month, and the peak in-between.

Source: EPI analysis of Bureau of Labor Statistics (BLS) Household Data Table A-2, and Table A-3.

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The economic disparities were laid bare as we saw how millions of workers were faced with the impossible choice to leave their jobs or risk their health. How millions of workers lack the basic labor standard to take paid sick days to care for themselves and protect the health of their coworkers and customers. How many workers have been forced to work without necessary protective gear. During the pandemic, unionized workers have been much more able to secure enhanced safety measures, additional premium pay, paid sick time, and a say in the terms of furloughs or work-share arrangements to save jobs. Unfortunately, most workers in the U.S. have not had the benefit of such a mechanism to collectively bargain because policymakers and employers have made it more and more difficult for workers to unionize, despite the fact that there’s widespread interest in a union among nonunion workers.

While we must rely on public health officials to determine when it’s safe to re-open, policymakers can take many actions to relieve the economic pain workers and their families are facing across the country. Obviously, it should be a priority for Congress to reinstate the $600 enhanced UI benefit. This isn’t only vital for workers, but also will help bolster the economy and create jobs. Federal policymakers also need to provide fiscal relief to state and local governments so they can continue to provide necessary services and prevent unnecessary cuts to their budgets as their revenue falls in the face of the historically large shutdown in economic activity. In fact, they could do one better and increase public-sector employment through the hiring of additional public health workers and contact tracers. Further, the current challenges to schools require more, not less, education staff in coming months.

On Friday, we will get a better picture of what happened for workers across the country in August. I’m particularly interested to see whether the recovery has gained any traction, particularly for historically disadvantaged groups. Next month, we will dive deeper into what’s happened as school resumed—in person or virtually—and what that has meant for teacher employment as well as parents struggling to make ends meet with financial and time constraints.