Giving Compass' Take:
- Research indicates that COVID-19 is severely impacting low-wage workers in the U.S., and there is a clear need for economic policies moving forward to center their well-being and wage growth for the near future.
- How can donors advocate for economic policy that centers and serves the most vulnerable workers during the pandemic?
- Read more about the plight of America's essential workers during the pandemic.
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Today’s U.S. Bureau of Labor Statistics Jobs Report demonstrates a stalled jobs recovery following the deep and rapid economic decline brought about by the coronavirus pandemic. The unemployment rate has decreased slightly to 6.7 percent, but still remains higher than the 3.5 percent unemployment rate in February prior to the start of the coronavirus recession.
The workers who have been hit the hardest continue to be Black workers (10.3 percent), and Latinx workers (8.4 percent). Women workers saw a decrease in unemployment (6.1 percent) that was accompanied by a slight decline in labor force participation (57.1 percent). These workers are also disproportionately low-wage workers as the service sector industries in which most of these workers are employed are among the hardest hit. To put this in context, when the deepest effects of the pandemic hit the economy in April, the unemployment rate reached a post-World War era high of 14.7 percent and the prime-age employment-to-population ratio plummeted to 69.7 percent—a 10 percentage point drop from the previous month.
It’s important for economists and policymakers alike to consider where the U.S. labor market is today compared to prior to the pandemic. Back then, wage growth had finally started to ramp-up for the first time in years. As many states and cities increased their minimum wage and the labor market tightened, wage growth accelerated the most for the lowest earners, yet significant income inequality and differences in unemployment rates by race remained persistent. Now, after the coronavirus recession caused an unprecedented number of jobs lost and widespread pay cuts, elevated unemployment rates will likely exert downward pressure on wages as workers find fewer jobs options and grow increasingly desperate as unemployment benefits expire.
This is why it’s essential to put forward policies that help maintain labor standards, including increasing earnings through minimum wage increases and ensuring workplace safety amid the pandemic so that an eventual recovery is robust and resilient, rather than further entrenching economic inequality. Recent research and today’s Job Report further emphasizes the need to center economic policies around the well-being of the hardest hit workers to ensure they won’t have to wait another 10 years for strong wage growth.
Read the full article about low-wage U.S. workers amid COVID-19 by Kate Bahn, Carmen Sanchez Cumming at Equitable Growth.