The global onset of the SARS-CoV-2 virus has manifested an unprecedented public health crisis, affecting thousands of people who are either sick or being killed due to a lack of vaccines and comprehensive treatment. Yet, the economic impact of the spread cannot be understated—slowing and closing businesses, suspension of state economies to slow the spread, and increasing incidence of unemployment all contribute to a recession competing with the likes of the Great Depression in terms of severity. The United States has experienced two consecutive quarters of declines in GDP for 2020, following an undisturbed eleven-year-long U.S. expansion since June 2009 (Bauer et al., 2020). The associated economic shutdown due to the pandemic has created a dire predicament for millions of workers. Nonetheless, emerging evidence of skewed employment compositions and lower financial resources show that marginalized communities—namely the Black and Hispanic communities—have been disproportionately burdened by the adverse economic impact of the virus. The economic consequences not only exacerbate existing inequalities but also increase the risk of infection and death amongst these individuals.

An occupational field is deemed “essential” when, according to the U.S. Department of Homeland Security, is needed to “continue critical infrastructure operations.” This encapsulates a wide range of sectors, like energy, transportation, and retail services (Hultin, 2020). However, the overrepresentation of the Hispanic and nonwhite workers in these frontlines, essential occupations have created concern for possible workplace outbreaks. Data from the Center for Economic and Policy Research and Current Population Survey for 2019 shows that people of color comprise the majority of essential workers in food and agriculture (50%) and in industrial, commercial, and residential facilities. Specifically, 21% of the 55,217,845 essential workers identify as Hispanic, despite only representing 16.7% of the national population (McNicholas & Poydock, 2020). While this may seem indistinguishable and insignificant compared to white communities, a study from the CDC regarding racial and ethnic disparities points to inflated workplace outbreak-related cases of COVID-19 being from Hispanic persons. The study examined 277 workplace outbreaks in Utah and found that despite 12% of the confirmed cases being associated with workplace outbreaks, nearly 73% of these cases were in persons who identified as Hispanic or nonwhite (Bui et al., 2020).

Multiple economic factors lead to a heightened risk for this group. Less flexible work schedules and scarce opportunities for telework are magnified by the lack of paid sick leave found in such essential sectors. This causes sick individuals to choose between earning a paycheck and seeking care when ill. Similarly, a lack of living wage provided by these low-wage, inflexible occupations increases the likelihood of individuals living in crowded housing, expediting the rate of transmission. A Pew Research Center survey from April highlights the difficulty and inequality in choosing between health and economic well-being; Hispanic adults (44%) were more likely than white adults (26%) to say that they “cannot pay some bills or can only make partial payments on some of them this month” (Lopez et al., 2020). Furthermore, data from the U.S. Bureau of Labor Statistics in 2018 showed that only 16% of Hispanics can work from home compared to 30% of the general population. Health in the workforce, consequently, is directly tied to the employment status of an individual and employee makeup of a sector. And efforts to combat inequities largely miss their mark in protecting these individuals; between 6.8 and 19.6 million private-sector workers were left without paid sick days from the Family First Coronavirus Response Act, which is largely attributable to minority groups being less likely to enjoy workplace benefits (Gould & Wilson, 2020).

Black Americans face a lot of the same economic implications of the virus as Hispanic Americans—namely their increased percentage of employment in essential sectors that offer very little assistance and their increased difficulty in managing unemployment. However, even fewer net household assets for Black Americans ($17,100) compared to Hispanics ($20,765) and Whites ($171,000) are behind the unequal outcomes observed for this community (Maxwell & Solomon). Underlying economic factors for Black Americans exacerbate the effect of the pandemic recession, according to the Economic Policy Institute. The existence of a black-white wage gap, prevalence of poverty among blacks, higher shares of single-parent households, and lower cash reserves compared to whites highlights the sheer difficulty of Black Americans to rebound economically compared to White Americans (Gould & Wilson, 2020). The historic disparity in wealth makes Black Americans more likely to fall behind on bills, be evicted from their homes due to failed mortgage payments and continue working in positions deemed “essential” despite the health risk. According to Darrick Hamilton, a professor of economics at Ohio State University, “there is a devaluation of Black people in virtually every domain in our society,” leading many Black Americans to either lose their job or stay at a job where they are at risk of infection (Greenhouse, 2020).

While the federal government was swift to institute a fiscal policy to minimize the economic harm done by the recession, varying access to resources across different demographics fails policy action to lessen economic suffering. Remedies to encourage social distancing and provide economic relief substantially miss their mark in helping out Black Americans. The $560 billion implementations of the CARES (Coronavirus Aid, Relief, and Economic Security) Act pushed by the federal government in March suffered from delays to benefit recipients, who were more likely to be low-income and people of color. A survey conducted by the Brookings Institution found that bank accounts with low levels of liquid assets were more likely to experience delays for unemployment benefits (Grinstein-Weiss & Roll, 2020). This was likely due to individuals that have not filed taxes in the past requiring additional tools from the IRS to access Economic Impact Payments, creating barriers for government-administered relief to reach the most vulnerable in society. Additionally, black-owned businesses heavily occupy vulnerable industries in comparison to white-owned businesses—leisure, hospitality, and retail—that were most affected by reduced demand for goods and services, causing greater business failure (Maxwell & Soloman, 2020). Efforts by the Paycheck Protection Program to give loans to small businesses to cover payroll costs, rent and utilities fell short since a widespread lack of banking relationships between lenders and black-owned businesses left those struggling to apply for assistance in the dust compared to established businesses. Due to the capped funding level of the PPP, those who could quickly apply for loans received assistance on a first-come-first-serve basis.

Going forward, utilizing the critical lessons learned from this catastrophe, policymakers must hasten to simplify how individuals—no matter their race—can continue to access economic relief. As scientific data becomes clear that Black and Hispanic Americans are at higher risks of infection and death from COVID-19, mitigation efforts should be targeted specifically towards these marginalized groups. Yet, such travesty the United States has experienced in the past 7 months brings social and economic disparity to the forefront, and the pandemic has only revealed the lack of economic power these communities have in today’s unequal society.

Sources

Bauer, Lauren, et al. “Ten Facts about COVID-19 and the U.S. Economy.” Brookings, Brookings Institution, 18 Sept. 2020, www.brookings.edu/research/ten-facts-about-covid-19-and-the-u-s-economy/. 

Bui, David  P, et al. “Racial and Ethnic Disparities Among COVID-19 Cases in Workplace Outbreaks by Industry Sector - Utah, March 6–June 5, 2020.” Centers for Disease Control and Prevention, Centers for Disease Control and Prevention, 20 Aug. 2020, www.cdc.gov/mmwr/volumes/69/wr/mm6933e3.htm?s_cid=mm6933e3_e. 

Gould, Elise, and Valerie Wilson. “Black Workers Face Two of the Most Lethal Preexisting Conditions for Coronavirus-Racism and Economic Inequality.” Economic Policy Institute, 1 June 2020, www.epi.org/publication/black-workers-covid/. 

Greenhouse, Steven, et al. “The Pandemic Has Intensified Systemic Economic Racism Against Black Americans.” The New Yorker, 30 July 2020, www.newyorker.com/news/news-desk/the-pandemic-has-intensified-systemic-economic-racism-against-black-americans. 

Hultin, Suzanne. “COVID-19: Essential Workers in the States.” National Conference of State Legislatures, NCSL, 21 May 2020, www.ncsl.org/research/labor-and-employment/covid-19-essential-workers-in-the-states.aspx. 

Lopez, Mark Hugo, et al. “Financial and Health Impacts of COVID-19 Vary Widely by Race and Ethnicity.” Pew Research Center, Pew Research Center, 3 Sept. 2020, www.pewresearch.org/fact-tank/2020/05/05/financial-and-health-impacts-of-covid-19-vary-widely-by-race-and-ethnicity/. 

Maxwell, Connor, and Danyelle Solomon. “The Economic Fallout of the Coronavirus for People of Color.” Center for American Progress, 8 May 2020, www.americanprogress.org/issues/race/news/2020/04/14/483125/economic-fallout-coronavirus-people-color/. 

McNicholas, Celine, and Margaret Poydock. “Who Are Essential Workers?: A Comprehensive Look at Their Wages, Demographics, and Unionization Rates.” Economic Policy Institute, Economic Policy Institute, 19 May 2020, www.epi.org/blog/who-are-essential-workers-a-comprehensive-look-at-their-wages-demographics-and-unionization-rates/. 

Roll, Stephen, and Michal Grinstein-Weiss. “Did CARES Act Benefits Reach Vulnerable Americans? Evidence from a National Survey.” Brookings, Brookings Institution, 25 Aug. 2020, www.brookings.edu/research/did-cares-act-benefits-reach-vulnerable-americans-evidence-from-a-national-survey/.