It’s well-established that Black and Latinx workers who lose their jobs are less likely to access Unemployment Insurance benefits than their White peers. And it’s clear this disparity means hardship at the individual level for Black and Latinx families. But what does it mean in the broader context of the COVID-induced economic crisis?

When people lose their income from work with nothing to replace it, they stop spending their money. When they don’t spend money, businesses suffer and lay off employees. Unemployment spreads contagiously through the economy, like a disease. But income from unemployment benefits can stop the contagious spread. When people receive income from unemployment benefits, they are able to pay for clothing for their children and food for their families. And the stores where they spend money are able to keep their employees on payroll.

The research described in this column shows that the sudden cut in income will lead large numbers of Black and Latinx unemployed workers to curtail their spending. This means that unemployment will spread more contagiously, even as the waning of the pandemic is on the horizon. Extending benefits until the public health situation is under control and businesses are fully functioning again would stabilize the U.S. economy.

If Black and Latinx workers who lost their jobs through no fault of their own during this pandemic had accessed benefits at the same rate as their White counterparts, the economic fallout would not have been so severe. In the longer term, we need to think about policy fixes that increase rates of unemployment benefit access among Black and Latinx workers.

Read the full article about racial disparities in unemployment by Alix Gould-Werth at Equitable Growth.