Harin Contractor

Many Americans are doing their best to respond to the COVID-19 pandemic by staying at home and adjusting their daily lives to help stop the spread of the virus. Unfortunately, these necessary social distancing measures are also having a profound effect on the American economy:

  • Major sporting venues have closed
  • National and international conferences have been canceled or postponed
  • Travel of all kinds has greatly diminished
  • Leaders are mandating closures to restaurants, bars, and other establishments where large numbers of people could gather

Negative Impacts on Workers in Retail, Food Service, and Transportation

Not surprisingly, all this disruption is going to hit some industries harder than others. Similarly, within those industries, some groups are going to be more adversely affected, including women and minorities. Graph of COVID-19 Pandemic Impacts on US Workforce

  • Workers employed in the Leisure and Hospitality sector represent 11% of the U.S. workforce and will be the first to feel the effects of the pandemic-inspired economic downturn. While both men and women in this sector will be affected about equally, more African Americans and Hispanics will be affected, as they are over-represented in the sector.
  • Workers in the sector’s Food Services sub-industry—of which African Americans and Hispanics make up 13.1% and 26.8% respectively—will be particularly more likely to lose their jobs and benefits if measures to stem the spread of the virus are prolonged.

Other sub-industries will be dramatically affected as well:

  • Clothing retailers will be impacted as consumers become unable to go to shopping malls and outlets. The workforce in this industry is composed of 73% women.
  • Impacts will be felt by Black workers in the Air Transportation and Bus/Urban Transit industries, of which they make up 20% and 31% respectively, as Americans begin to travel less and avoid using public transportation.

These workers will face loss of hours and wages, or even experience temporary unemployment during this time.

Rising Demand for Workers in the Healthcare, Social Assistance, and Courier and Messenger Sectors

Conversely, some workers and industries are going to be more in demand in this time of crisis.

Graph of COVID-19 Pandemic Impacts on US Workforce

  • Right now, healthcare workers and social assistance professionals (16% of the workforce) are working tirelessly and often overtime to help protect our most vulnerable populations, including patients and the elderly. Women make up 78% of this vital sector and African Americans are over-represented (almost 18% of the employed).
  • As social-distancing may become the norm for the immediate future, the need for rapid delivery services may also see a spike in demand. For example, Amazon announced it wants to hire 100,000 more workers to deliver essential products, and delivery services like InstaCart and Postmates cannot keep up with delivery schedule dates. African Americans make up a significant share of the Couriers and Messengers sector at 25%. These gig jobs, which did not exist during the 2008 financial crisis, could provide opportunities for workers who lose jobs in other sectors to gain income and not fall off the employment cliff, although most of these jobs do not offer traditional benefits and pay lower-than-average wages.

Nexight’s Key Takeaways for U.S. Leaders

As policymakers, innovators, and business leaders grapple with this dramatically and rapidly changing economy, they must keep potential impacts on women and communities of color in mind as they strive to find solutions. These solutions cannot be one size fits all; understanding the workforce and its needs, demands, and constraints will lead to better responses that can blunt some of the adverse effects we will experience in the coming months.

At Nexight, we will continue to work not only with our Federal government clients to assess and evaluate ways to create more economic resilience but also with the private sector to support long-term workforce and strategic planning. Though we do not yet know the full scope of this economic downturn, let’s all try to leverage the lessons we learned from the 2008 financial crisis to support workers now—when they need our help the most.