COVID 19 and Work Employment Disparities Magnified

By Elena Delavega, PhD, MSW (Professor, School of Social Work The University of Memphis) & Gregory M. Blumenthal, PhD (Principal, GMBS Consulting Memphis, Tennessee). From the 2021 Hooks Institute Policy Papers “Race in the Time of COVID-19.”

Introduction

COVID-19, the disease caused by the novel coronavirus that emerged at the end of 2019, resulted in the closures of businesses and workplaces, causing enormous disruptions to work and to the economy (Rothan & Byrareddy, 2020; Sorhabi et al., 2020), particularly to the most vulnerable in society including minorities, who often bear the brunt of poverty and exclusionary policies (Reeves & Rothwell, 2020; Weible et al., 2020; Wright & Merritt, 2020). Racial minorities experienced the worst of the pandemic early on (CDC, 2020). COVID-19 was a great game-changer, but in many ways, it was not. Existing disparities were only magnified.

COVID-19 and Employment/Unemployment

The pandemic did not affect everyone equally. Existing problems brought by social policies that advantage certain groups while excluding others were magnified by the pandemic (Long et al., 2020). Income inequality is associated with worse outcomes from the pandemic, but income inequality was not brought on by the pandemic; it is a preexisting condition (Graham, 2021).

Privileged Workers: Working from Home

Those workers who were able to work from home digitally were able to retain their incomes, health insurance, and housing (Long et al., 2020). People who were able to work from home were also impacted a lot less by school closures and lack of childcare, as they were able to stay home and watch their children (Gould & Shierholz, 2020).

Essential Workers

People in the service and hospitality industries were affected in the worst ways (Long et al., 2020). People in the service industry, particularly those in the lowest strata and with low to no power, did not have the opportunity to protect themselves by working from home, by practicing social distancing, or by having the necessary personal protective equipment (PPE) (Glover et al., 2020; Miller et al., 2020; Van Drie & Reeves, 2020). These workers were not only not able to avoid work and social distance, but they were additionally burdened by school and childcare center closures (Gould & Shierholz, 2020). African Americans are disproportionately affected by these burdens (Yancy, 2020).

Essential workers such as grocery and warehouse workers and truck drivers were called “essential” because they provided services that allowed people who were able to work from home and isolate to continue to receive what they needed to support life (US. DHS, 2020). However, essential workers were not essential in the sense that they should survive or receive adequate compensation or protections – essential workers are, in fact, expendable workers. These workers have no choice because while the death rate from the virus may be between 2% and 10%, the death rate from starvation is 100%.

Workers Who Lost Their Jobs

Many people lost their jobs, particularly when restaurants closed and people canceled vacations (Long et al., 2020). People in precarious situations suffered the worst job losses, but others were furloughed, which meant they received no salary during the period (Graham, 2021). For a worker who depends on his or her salary for survival, the income loss was devastating. People who lost their jobs or were furloughed lost their healthcare also. (Graham, 2021).

Nationally, job losses between May 2019 and May 2020 were most acute on an absolute basis among restaurant, janitorial, and secretarial workers and on a percentage basis among tourism, entertainment, and hairstyling workers. There were actually strong increases in employment among computer programmers (absolute increase) and telemarketers (percentage increase). (BLS, 2020a, 2021a) Note that the increases were among occupations with high work-from-home potential, while the decreases were among occupations with required physical attendance.

Memphis Poverty and Job Distribution

Minorities in Memphis tend to have the highest poverty rates and to be concentrated in service jobs that were most likely to either disappear due to the drop in demand or to require the worker to continue to expose himself/ herself to the virus with no protection. In Shelby County, roughly 21% of Blacks and 26% of Hispanics work in service jobs, while only 13% of Whites do. (U.S. Census Bureau, 2020a, 2020b, 2020c). Roughly 23% of Whites and 23% of Blacks work in office jobs, while only 113% of Hispanics do. Roughly 5% of Whites and 6% of Blacks work in agricultural jobs, while 30% of Hispanics do. Roughly 50% of Whites work in managerial or professional jobs, while only 25% of Blacks and 15% of Hispanics do.

In the Memphis metropolitan area, job losses between May 2019 and May 2020 were most acute on an absolute basis among restaurant, janitorial, and secretarial workers and on a percentage basis among agricultural workers. There were strong increases in employment among nonprofit social service workers and legal service workers. (BLS, 2020b, 2021b). As seen nationally, the increases were among occupations with high work-from-home potential, while the decreases were among occupations with required physical attendance. As seen above, jobs which employ Blacks and Hispanics were disproportionately lost, while jobs that employ Whites were disproportionately gained.

The K-Shaped Recovery

People in low-wage jobs were hit hardest, and many of those jobs may not have recovered because workers moved to different jobs or different regions (Begley et at., 2021). In Tennessee, according to Opportunity Insights (2021), at the height of the pandemic crisis on April 17, 2020, the unemployment rate was for low-income workers minus 29.2%, for middle-income workers minus 15.6%, and for high-income workers minus 7.2%, what these had been in January 2020. The huge drops did not last long, however, and by June 30, 2020, things had stabilized somewhat, with the unemployment rate for low-income workers at minus 10.7%, for middle-income workers minus 4.9%, and for high-income workers plus 0.9% January 2020 levels. The situation has not improved much for low-income workers since then. When compared to January 2020, on May 5, 2021, high-income workers had gained 13.1% in employment, middle-income workers had gained 3.0%, but low-income workers were still 10.1% below where they had been before the crisis, or roughly in the same situation as in June 2020.

The same is true in Shelby County, with the difference that both low-income and middle-income workers have had much difficulty recovering. During the worst moment of the pandemic crisis on April 17, 2020, the unemployment

rate was for low-income workers minus 23.2%, for middle-income workers minus 11.8%, and for high-income workers minus 8.8% what these had been in January 2020 (Opportunity Insights, 2021) The huge drops did not last long, however, and by June 30, 2020 things had stabilized somewhat, with the unemployment rate for low- income workers at minus 9.5%, for middle-income workers minus 7.8%, and for high-income workers plus 0.3% January 2020 levels. (Opportunity Insights, 2021). The situation has not improved much for low-income workers since then. When compared to January 2020, on May 5, 2021, high-income workers had gained 11.5% in employment, but middle-income workers were still 6.4%, and low-income workers were still 10.1% below where they had been before the crisis, or roughly in the same situation as in June 2020 (Opportunity Insights, 2021)

Plantation System: Policy Choices and Implications

Tennessee Cutting Federal Benefits

The state of Tennessee has refused extended unemployment benefits for workers affected due to the pandemic (Tennessee Office of the Governor, 2021). State officials explicitly stated that they feel that these unemployment benefits, none of which exceed or even meet the poverty level, are considered to be larger than the income that workers have any right to expect (Sher & Flessner, 2021). To reiterate, the official position of the state of Tennessee is that workers have no right to be paid enough to avoid starvation for themselves and their families. The line between this and slavery is so thin as to be rendered meaningless.

Exploitive System

No one is exempt from economic shocks and labor market failures. COVID-19 threatened all people equally, but the effects of the pandemic were not felt equally by all. Those who had precarious jobs and no protections suffered the worst. (Graham, 2021). In addition to the exploitation suffered by vulnerable workers, the current system abuses small businesses to the benefit of megacorporations. It provides capital and trained, healthy employees to Wall Street at the expense of Main Street. Small Black businesses get strangled under this abusive system.

Recommendations

Support for Workers

  • Income – To pay a worker less than it costs to feed, clothe, and house the worker is abusive. Unfortunately, it is just one example of the abusonormativity (the normalization of abusive behavior) of American society. This must change. Workers are humans and merit a living wage.[1]
  • Jobless benefits – When a worker, through no fault of their own, cannot obtain work for which they are qualified, they should be sustained and given the skills necessary to obtain work. Our failure to do so is another example of American abusonormativity.
  • Universal healthcare – The difference between humans and animals is that we do not leave our sick behind to die in the wilderness. Our failure to do so is yet another example of American abusonormativity. Universal healthcare is a necessity to maintain a productive society.
  • Childcare – It is often said that the lives of our babies are of primary societal importance until they are born, at which point they become expendable. This is still another example of American abusonormativity. Parents should either be financially supported in raising their children themselves or with outside assistance. Internet – The means of participating in our government and, increasingly, the education of our children are dependent upon access to the internet. Otherwise, we are applying a new poll tax and destroying public education by making these resources available only to those with excess resources. This is more American abusonormativity.

Support for Small Business

Small businesses are the backbone of America, providing almost half of all private jobs, accounting for almost two-thirds (2/3) of all job growth, and representing over 40% of US GDP (U.S. Census, 2018). These businesses have been among the hardest hit by the pandemic (Bartik et al., 2020). Over half of them had less than two weeks of cash on hand when the pandemic hit, and many experienced significant difficulties in obtaining CARES funding.

The answers to rebuild these businesses are obvious:

  • Capital – If banks and other lenders cannot or will not provide capital under relaxed criteria and low-interest rates, the government must step in as the lender of last resort. If the government is the lender, fair employment practices and living wages should be rigorously enforced.
  • Training – Well-trained employees do not appear out of thin air. Small businesses rarely have the resources to train employees from the ground up. Our education system, in particular our community college system, must have the resources to undertake this training on a large scale and at minimal cost to the trainees and small businesses.
  • Universal healthcare – Small businesses often lack the resources to provide quality health insurance to their employees. This results in expensive turnover and places small businesses at a competitive disadvantage against large private and public employers who can afford to negotiate better rates with insurers.

Watch the authors present on this topic on the Hooks Institute YouTube page: https://youtu.be/yCUx1Rl1R-k

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[1] “Abusonoramtivity “ is a term coined by the authors to describe the normalization of abusive behavior by institutions and individual actor

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