As the COVID-19 outbreak in the U.S. continues, research shows the resulting financial downfall in the hardest hit industries is having a disproportionate impact on women and people of color who are workers or small business owners.
Job losses in March for women outnumbered job losses for men in almost all sectors of the economy, according to a report by the Institute for Women's Policy Research (IWPR) published in April. For example, women's payroll employment decreased by 261,000 compared with a drop in employment for men of 181,000 in leisure and hospitality — industries with the greatest job losses. Other industries in which women disproportionately lost jobs include retail, professional services and manufacturing, the report stated. A Pew Research Center report published March 27 also found that black and Hispanic workers are overrepresented in these industries, which are at high risk of layoffs.
In a separate report published April 21, Pew found that more than half (52%) of lower-income adults surveyed said they or someone in their household has lost a job or received a pay cut due to the outbreak, compared to 42% of middle-income and 32% of upper-income adults. The percentages were higher for people of color, and groups hardest hit by job loss are also least likely to have financial reserves, according to Pew.
There will be a "devastating impact" on families due to the job loss in sectors dominated by women, "especially those headed by single mothers or where women are the primary or co-breadwinner," IWPR said in a statement.
'Disproportionately devastating'
Women and people of color also face a small business crisis. Research has shown that the COVID-19 recession has the potential to be "disproportionately devastating" to minority and women-owned business enterprises (MWBEs). During the Great Recession, even though MWBEs were more likely to shut down, the businesses aided in stabilizing the economy during the recovery period, according to an April 14 Brookings Institution report. "Nationally, [MWBEs] added 1.8 million jobs from 2007 to 2012, while firms owned by white males lost 800,000 jobs, and firms equally owned by white men and women lost another 1.6 million jobs," the report stated.
The latest crisis may diminish the gains made during the past 10 years. Of the immediate-risk industries — food services, retail and accommodation — "39% are female-owned, or equally female- and male-owned, compared to 29% of business in industries at near-term risk and 36% at long-term risk," Brookings said. And 20% of businesses in those industries are operated by Asian American or Black owners, compared to 12% businesses in industries at long-term risk and 7% of businesses at near-term risk, the report stated.
The Paycheck Protection Program, funding included in The Coronavirus Aid, Relief, and Economic Security Act , was signed into law March 27 to aid small businesses and nonprofit organizations. But major banks distributed loans to "well-connected, wealthier companies," excluding many small businesses and failing "to provide benefits to the vast majority of businesses owned by people of color," the Center for Responsible Lending, a nonprofit organization said in an April 16 statement. After public outcry, however, some returned the funding. A second round of funds, $310 billion, was added April 27. "As in the aftermath of the Great Recession, the resilience of MWBEs will be fundamental to the nation's economic recovery," according to Brookings Institution researchers.
Employer takeaway
While many of these findings point to systemic issues, employers must still exercise caution in the short-term. The U.S. Equal Employment Opportunity Commission (EEOC) recently reminded employers that federal nondiscrimination laws remain in effect during the pandemic. "The EEOC urges employers and employees to be mindful of instances of harassment, intimidation or discrimination in the workplace and to take action to prevent or correct this behavior," EEOC Chair Janet Dhillon said in a statement. Adverse employment actions such as layoffs cannot be based on protected characteristics, including race and gender.
