An Unequal Recession

The coronavirus pandemic has decimated the U.S. economy, and its impact is being felt most by women and minorities.

Why women and minorities are most affected by this economic downturn.

As unemployment soared in April — when companies shed a record 20.5 million jobs — there was one defining trend: Women lost more jobs than men, and black, Latino and Asian workers were disproportionately impacted by layoffs and furloughs.

The most recent report for May inspired some optimism after it revealed that nonfarm payrolls added 2.5 million jobs, pushing down the unemployment rate to 13.3%. But disparities in job losses continue to persist.

While white and Latino workers saw some increases last month, the jobless rates for black and Asian workers showed little change. And women still lag behind men in employment.

THE WHY

Much of the blame lies in the unique nature of this latest decline, explained Amanda Weinstein, a professor of economics at the University of Akron. Previous recessions, such as the one in 2008, exacerbated existing market trends like globalization and the decline of manufacturing in America. “Historically, these trends have gone against men, especially men who worked in industries like manufacturing,” she said. “This recession is not that.”

Prior to the coronavirus, Weinstein noted, women had made tremendous gains in employment — in January, in fact, they outnumbered men in the workforce. “It’s because they were in a lot of the people-based industries that had been doing well as our economy has pivoted toward a service-industry economy,” she said.

But with the arrival of COVID-19, people-facing industries — including health and education, professional services, retail trade and leisure and hospitality — were suddenly risky as possible contributors to the spread of the virus. “Those were the jobs that were immediately impacted, and most of those jobs are held by women,” explained by Fayruz Kirtzman, senior principal in Korn Ferry’s workforce performance, inclusion and diversity practice. “And if you put the ethnicity and race overlay on there, most of these jobs are held by women of color. Losing their jobs has a profound impact on their families and their communities

The pandemic also introduced another challenge for families. With schools, day cares and camps closed indefinitely by the virus, parents have been juggling caregiving with work, and experts say the majority of that burden landed on women. As a result, some are opting out of the workforce, said Kirzman: “We’ve seen women take advantage of the furloughs and say, ‘I’ll use these three months and take care of the kids and hopefully go back to work in September.’”

CLOSE TO HOME

The shoe industry, in particular, has been hard hit by the economic shutdown. An estimated 100,000 footwear jobs have been lost due to the coronavirus, according to the Footwear Distributors & Retailers of America, and many of those affected have turned to the Two Ten Footwear Foundation for assistance. “With nearly 60% of the industry unemployed or furloughed, our colleagues are turning to us for help, applying at a rate that’s 10 times greater than we usually see,” said Terri Rawson, chief marketing and development officer at Two Ten.

Since mid-March, the organization has received more than 5,000 applications for assistance, and expects to grant roughly $3 million by mid-July or sooner. Rawson noted that the majority of applications (65%) have come from women. And out of the total number of footwear families the group has helped, upwards of 20% are single-parent households.

Two Ten predicts more hardship is still to come for those who have been forced to defer payments on rent, car loans and other bills during the pandemic.

UPSIDE AHEAD?

Following the May jobs report, Washington and Wall Street optimistically declared that an economic recovery is just around the corner. But economists are more circumspect. “With [businesses] reopening, there will be some bounceback,” said Weinstein. “But there are still a lot of people who aren’t comfortable going out and shopping. If those consumers aren’t comfortable, then they’re not going to do it, whether the economy is open or not.”

And as companies do ramp back up, Kirtzman urges executives to put diversity and inclusion at the forefront: “We only will come up with great new ideas if we hear different voices. We’re not going to get out of this if we listen to the same voices over and over.”

“WITH BUSINESSES REOPENING, THERE WILL BE SOME BOUNCEBACK.”

— AMANDA WEINSTEIN, UNIVERSITY OF AKRON