Which Americans Is Unemployment Hurting Most?

Nearly 15 percent of Americans are currently unemployed, according to April’s report from the Bureau of Labor Statistics. The current rate of 14.7 percent is up from a record low of 3.5 percent in February and represents the loss of more than 20 million jobs.

With such large changes, unemployment affects many American households in some way. But which groups are most likely to feel the pain?  The Peter G. Peterson Foundation (PGPF), a non-partisan organization dedicated to addressing America’s long-term fiscal challenges, took a closer look at the impact in several key areas.

Hospitality, Service Industries Hit Hardest 

As restaurants, hotels, bars, and other entertainment venues closed rapidly throughout March, the leisure and hospitality sector reacted with the highest rate of unemployment. While some businesses were able to operate in a limited capacity offering take-out or related services, business is not nearly what it was before COVID-19 hit.

As a result, PGPF reported that the leisure and hospitality sector saw a decrease of 7.7 million jobs in April, by far the most of any sector. Looking at all jobs lost in hospitality since February, Fivethirtyeight noted that the sector now has half of the employees it did in February. 

The next closest sector was “all other services,” which includes things like salons, pet grooming, and dry cleaners. This sector has lost 22 percent of its workforce since February, according to Fivethirtyeight. 

Many of these businesses were forced to close under stay-at-home orders and have not been able to reopen because they do not allow for proper social distancing. In both the hospitality and service sectors, it’s unclear how many job losses will be temporary as businesses begin to reopen in the coming months.

Hispanic, Younger Workers See Greatest Losses

Looking at the unemployment data by race and ethnicity, PGPF found that all major demographic groups saw at least a 10 percent increase in unemployment rates between February and April. The largest increase came among Hispanic workers, whose unemployment rate was 4.4 percent in February and now stands at 18.9 percent. 

The Urban Institute reported that Hispanic workers are the least likely of any ethnic group to have jobs that can be done from home, and the most likely to work in sectors hardest hit by job losses. Hispanic and Latino workers make up 27 percent of workers in the hospitality and leisure sector and 20 percent of the workforce in the “other services” sector, the group found.

Unemployment also appears to be hitting younger generations harder than older ones. A poll conducted by Data for Progress found that 52 percent of people under age 45 reported a job loss or reduced hours, compared to 26 percent of those over age 45. 

In addition, PGPF found that the employment rate for Generation Z (those born after 1997) was 11.4 percent in March, nearly seven percent above any other age group.

Millennials entered the workforce during the Great Recession in 2008, and now Generation Z is poised to do the same thing during COVID-19. Experts like The Atlantic’s Annie Lowery worry that this will cause long-term damage to both generations’ earning power.

“If you graduate into a recession, for example, it leads to high unemployment and large earnings losses at the time, which you would expect,” Lowery told Vox. “And then, it leads to lower earnings trajectories for decades and even a lifetime, which is maybe more unexpected. It basically means that you don’t rebound in the way that other people rebound.”

Grassroots Pulse covers public policy and political issues aimed at engaging highly-active policy makers, donors, and grassroots leaders at the forefront of the political process in America today.

Image Credit: Photo by Anastasiia Chepinska on Unsplash

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