by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Rich Lowry of National Review Online explores the COVID-19 pandemic’s economic impact.
Just when it seemed some of the most disheartening trends in the U.S. economy were finally beginning to reverse, COVID-19 arrived to entrench them.
The pandemic has been a neutron bomb targeted at the prospects of lower-income working people. They had finally begun to benefit from the recovery from the Great Recession when the virus ravaged sectors of the economy that disproportionately employ them.
The Washington Post has called the resulting economic damage “the most unequal recession in modern U.S. history.” As the paper puts it, starkly, “the less workers earned at their job, the more likely they were to lose it.”
The pandemic has hammered restaurants, hotels, and places of entertainment, all of which don’t pay high wages and tend to employ women and minorities. It has cut a swath through small business. It has slammed workers who can’t retreat to home offices for Zoom calls.
In short, it has taken all of the tendencies of our knowledge economy that benefit the better-educated and disadvantage non-college-educated workers and has made them more pronounced, amidst a public-health crisis that has also hit the most vulnerable the hardest.
According to a Gallup Poll earlier this year, 71 percent of people in the top income quintile said they were working from home, whereas 45 percent of people in the bottom quintile stayed at home and were unable to work.
A National Bureau of Economic Research working paper published in May found that workers in high-proximity jobs impossible to perform from home tend to be “less educated, of lower income, have fewer liquid assets relative to income, and are more likely renters.” Workers in such jobs were more likely to become unemployed, and non-college-educated workers experienced a four-point larger drop in employment than college-educated workers.