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
What are the details of President Joe Biden’s coronavirus relief plan?
The $1.9 trillion plan would aim to speed up the vaccine rollout and provide financial help to individuals, states and local governments and businesses. Called the “American Rescue Plan,” the legislative proposal would meet Biden’s goal of administering 100 million vaccines by the 100th day of his administration, while advancing his objective of reopening most schools by the spring. It would also include $1,400 checks for most Americans. Get the rest of the specifics here.
What kind of help can small businesses get right now?
A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.
What does the hiring situation in the U.S. look like as we enter the new year?
New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.
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