How much unemployment is there? Depends on your wage bracket.
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In a speech Wednesday, Federal Reserve Gov. Lael Brainard said the unemployment rate for the nation’s highest-paid workers has fallen below 5%.
But for the lowest-paid workers, it’s as high as 20%.
The numbers paint what economists have called a “K-shaped recovery”: Things are improving for the better off and getting worse for the rest.
Paul Iversen, an analyst at the University of Iowa’s Labor Center, said this has long-term ramifications. “People that were already in a precarious position, that were already one paycheck away from disaster, now find themselves without that paycheck. And so, disaster is the result.”
Industries like hospitality, which tend to be low wage and employ more Black and Latinx workers, have been particularly hard hit by the pandemic.
Daniil Manaenkov, an economist at the University of Michigan, said, “The issue of very, very different levels of unemployment in the different sectors of the economy is not going to go away until we allow our hotels and restaurants to go at near full capacity.”
In Wednesday’s speech, the Fed’s Brainard emphasized the need for urgent economic policy to help millions of unemployed Americans. Trevon Logan, an economist at Ohio State University, agrees.
“We do need to support the income of these workers, particularly those who are in these high-contact service industries who are seeing reductions in hours and are facing increasing and prolonged unemployment,” Logan said.
But, he warned, economic recovery hinges on the success of the coronavirus vaccine rollout. Without the U.S. getting hold of the pandemic, restaurants, hotels, bars and other sectors that employ lower-wage earners are unlikely to reopen at full capacity.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy continues reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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