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Coronavirus pandemic job losses falling hardest on people who were already hurting

Paul Roberts, The Seattle Times on

Published in Business News

SEATTLE -- Before the pandemic shut down much of the economy, Logan Madangure had come to see Seattle as a city of opportunity.

Although the 24-year-old Zimbabwean native arrived in Seattle three years ago with only a high-school education and has struggled with the city's high living costs, he had little trouble finding jobs, often several at a time, in the bustling hospitality sector.

That changed abruptly in March, when Madangure's employer, a local cruise company he declined to name, temporarily closed. Now, Madangure doesn't know if his job as an onboard bartender will return, or where his future lies in a labor market he worries is even more divided between haves and have-nots.

While many white-collar workers in the city have been "able to continue their careers working from home" during the pandemic, Madangure says, his own job prospects are "on hold."

Madangure's observations will be familiar to many workers in Seattle and across the state who have lost jobs during the pandemic.

Where previous recessions killed jobs across many industries and demographic groups, layoffs in the COVID-19 era often have been concentrated among workers who were often behind economically before the pandemic. Among them, working moms, younger workers, and workers who are less educated, lower-paid, and non-white.

In King County, Wash., where Black residents account for around 6% of the total population, Black workers make up around 11% of recent layoffs. That's according to a new report by Washington STEM, a Seattle-based nonprofit that has analyzed weekly, or "continuing," claims for jobless benefits filed by unemployed workers during the pandemic.

By contrast, white residents, who make up 63% of the county's population, have accounted for just 48% of pandemic-related unemployment, Washington STEM found.

One factor: Pandemic-related layoffs struck earliest and hardest in sectors where Black workers were already over-represented. That includes food service and lodging, as well as in personal service, such as hair salons, and gig work, says Andrea Caupain, CEO of Byrd Barr Place, a Seattle-based nonprofit that works with low-income families. "Low-wage workers in those industries were the first to go," Caupain says.

The pandemic's economic disparities also show up in other demographic categories. King County residents 34 or younger, who account for roughly 37% of the population, based on statewide figures, make up almost 42% of continuing jobless claims in King County and statewide.

Gender is another dividing line. Where the Great Recession of 2008-09 was nicknamed the "man-cession" because layoffs were heavy in male-dominated sectors, like finance and construction, the COVID-19 recession has been harder on women.

In King County, women have filed 51% of ongoing jobless claims, even though they represent 46% of the county labor force, according to Washington STEM.

One reason is that pandemic-related layoffs were concentrated in sectors where women outnumber men, such as the service industry, says Anneliese Vance-Sherman, a regional labor economist for the Employment Security Department who tracks the Seattle area.

For example, the health care sector, where women hold nearly four of five jobs nationally, saw massive layoffs early in the pandemic. Likewise for the leisure and hospitality sector, which is around 70% female. In downtown Seattle, much of the hotel sector has shut down, with total revenue down 95% through mid-June over the same period last year, according to the Downtown Seattle Association.

Another strike against working women: As the pandemic shuttered many childcare centers and schools, parents -- often mothers -- took over many childcare and education duties. In King County, total licensed daycare capacity is down 28% since February, and one in three providers is at risk of permanent closure, according to Child Care Aware of Washington.

Nationally, women with children were 45% more likely than men with children to move from full-time work to part-time work between February and April, according to a new study by Ben Cowan, an associate professor in the School of Economic Sciences at Washington State University.

These disparities point to another economic signature of the COVID-19 recession -- income inequality.

During the Great Recession, Wall Street was among the first sectors to see job losses, followed by housing and construction. That meant "a lot of upper-income white-collar, college-educated people" lost their jobs," says Debra Glassman, principal lecturer of finance and business economics at the University of Washington Foster School of Business. But "that's not the plot line for the current recession."

Instead, Glassman says, the first waves of pandemic-related layoffs struck heavily among workers in lower-paying jobs that don't require a college education.

In King County, a third of continuous jobless claims have been filed by people with the equivalent of a high school degree or less and a median income of $36,508, according to Washington STEM and 2018 U.S. Census data. Yet that demographic group represents barely a fifth of the county population.

By contrast, workers with a graduate or professional degree, whose median income is $93,213 and who make up a fifth of the county's workforce, filed just 7% of ongoing jobless claims, according to Washington STEM and census data.

In other words, layoffs often struck hardest among those who could least afford to lose their jobs. "I don't have savings," said Katie Brodkin, 37, of Seattle, who lost her job as a pediatric dental assistant in March. Without the governor's eviction moratorium and a timely tax refund, she and her 6-year-old son "would have been out on the streets."

That points to yet another key difference with this recession: job mobility.

Workers whose jobs couldn't be done from home were more than twice as likely to be laid off than their work-from-home peers in King County, according to Washington STEM.

 

To be sure, these disparities could change with time. Glassman thinks that the longer the recession lasts (Washington is still seeing historically high levels of layoffs), the more we can expect additional layoffs in high-paying sectors.

Even by May, the state was seeing more initial jobless claims by workers in high-salary sectors such as tech and finance -- though at least some of those claims were likely fraudulent.

But because layoffs have declined steadily in recent weeks, the demographics of the job losses are unlikely to significantly change.

In fact, Washington STEM's data shows that in demographic categories such as race, gender, and age, disparities have actually widened over the course of the pandemic.

And those disparities will probably linger in the post-COVID economy.

For example, employment recovery will be much faster for information-related sectors, such as tech, where jobs more easily moved from offices to homes -- and where layoffs were less frequent to begin with. By contrast, sectors that have taken the biggest beatings are also likely to take the longest to return to pre-COVID-19 job levels.

That's clear in the healthcare sector, where many non-essential clinics have been slow to re-open. Brodkin says her clinic can't bring her back full-time until September.

Similarly, bars and restaurants that survived the shutdown will likely be operating for some time at reduced capacity, with smaller staffs, because of health restrictions.

"I have no idea when they're going to open back up," says William Parham, 35, of Seattle, who lost his security job at the University Avenue location of Supreme, a pizza-themed bar. "And I have no idea if I'm even going to be called back to work when they do decide to open back up."

Lower-wage jobs are also likely to be disproportionately affected by automation as employers try to cut labor costs in the recovery, says Vance-Sherman, the state Employment Security Department economist.

Recessions always accelerate automation, but the pandemic may push employers to use technology to lower safety-related costs, adds the UW's Glassman. Restaurants hoping to minimize contact between staff and customers, for example, may simply replace staff with automated ordering. "People are extremely expensive even in the best of times and (COVID-19-related) behavioral changes are making people especially expensive," she says.

Another obstacle to job recovery in the COVID-19 era is that workers themselves may be reluctant to return to workplaces that may not be safe.

Renee Stevens, 65, of Tacoma quit her job as a grocery store merchandiser in April out of fear of catching the coronavirus and infecting her family.

While Stevens wants to get back to work -- "I'm not a person who likes to sit around," she says -- she's still worried about workplace risks. When she visits her former employer, "probably 90% aren't wearing masks," she said. "It just astounds me."

The bleak labor picture has some silver linings. The federal stimulus package enacted in March provided comparatively generous benefits for low-wage workers. Although those benefits are set to expire in late July, some in Congress are pushing to extend them.

Some experts also see new political momentum to address job-market disparities arising from the ongoing protests over police brutality and racial injustice.

Caupain, with Byrd Barr Place, says local business leaders in sectors such as construction and real estate, where Black workers historically have been underrepresented, are now "doing a self-evaluation of the role they've been playing and what needs to change in the industry."

The social justice movement has also brought new political and philanthropic support for programs aimed at improving job prospects for young African Americans through retraining and other strategies, Caupain said.

Growing support for the Black Lives Matter movement in particular has shifted how many white progressives view the long-standing economic challenges in the Black community, Caupain says. "I think we have a critical mass of people who (are) listening in a different way and want to take action," Caupain said. "And that's exciting."

(c)2020 The Seattle Times

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