Data show unemployment has steadily gotten better, but that is not the case for everybody.
MANHATTAN (CN) — It is said that the Covid-19 pandemic does not discriminate. But the related economic downturn clearly does.
For groups and industries that are recovering at a much slower rate, however, the picture isn’t that rosy.
“Every recession is different,” Rakesh Kochhar, a senior researcher at Pew, said in an interview. “The Great Recession was perhaps the slowest economic recovery ever. It was driven by a financial sector crisis, which tend to take longer to unwind.”
The current recession, which is driven primarily by the Covid-19 pandemic, is not like most other downturns in that the service and retail sectors have been much harder hit. As a result, those who work in those sectors are hard hit as well.
Pew reported Thursday that women, particularly Hispanic women, fared much worse in the coronavirus recession than during the Great Recession of 2007-09. Conversely, African-American men, who saw a peak unemployment of 21.2% during the Great Recession, have seen only a 15.8% top unemployment rate this time around.
“The disparities have a lot to do with the different mix of occupations,” said Robert Rycroft, an economics professor at the University of Mary Washington. Rycroft noted that in previous recessions manufacturing and construction suffered more than the service sector. “Some jobs were very susceptible to the effects of the virus,” Rycroft said.
While the surprising 13.3% unemployment rate reported last Friday by the Bureau of Labor Statistics was hailed as the first indication of the American economy’s comeback, the report showed unemployment has not been equal among all demographics. Among Hispanic workers, the unemployment rate is still high at 17.6%, and for both African-American and Asian workers unemployment actually rose in May.
“Research has shown that historically higher unemployment rates, lower wages, higher poverty rates, and lower liquid savings make job losses even more devastating for African-American workers and their families,” Elise Gould, a senior economist at the Economic Policy Institute, wrote in an analysis on June 5.
The 16.8% unemployment rate in May among African Americans remained considerably higher than the 12.4% rate among Caucasian workers, according to the BLS. The disparity is even greater among African-American men, who had a 15.5% unemployment rate last month, versus Caucasian men, who had a 10.7% rate.
“The downturn has not fallen equally on all Americans, and those least able to shoulder the burden have been the most affected,” Federal Reserve Chairman Jerome Powell said on Wednesday after the central bank’s governors met to discuss interest rates.
Further, while new unemployment claims have steadily dropped, more than 44 million had filed claims since mid-March and nearly 21 million Americans still received unemployment as of the week ending May 30, according to the Labor Department.
“It’s a good sign in the midst of really terrible news,” Rycroft said of the BLS report and steady drop unemployment claims. “I don’t expect any V-recovery. I expect many months of fairly stagnant economy.”