Cashiers heading the registers at a Walmart in Saugus, Mass., February 2018.
Occupational segregation—the disproportionate representation of a group in any type of job—hurts workers and the entire U.S. economy by entrenching racial and gender wage gaps, depressing earnings, and limiting workers’ ability to go into their preferred fields of work. Research shows that differences in education or skills fail to explain a large chunk of persisting job stratification, and that discrimination and longstanding social norms play an important role in preventing workers from being proportionately represented in the U.S. occupational structure.
To illuminate the current status of occupational segregation in the United States, below are four graphs that demonstrate the extent to which workers are crowded into some jobs and have limited access to others along the lines of race and gender, contributing to persistent wage inequality across the labor market. Along with labor market polarization and the rise of insecure and lousy jobs, White men continue to make up the disproportionate majority of workers in top-paying positions, such as CEOs. Conversely, Latinx workers, Black workers, and Asian American or Pacific Islander workers are underrepresented across many of the highest-paying occupations. (See Figure 1.)
Figure 1
From the 1940s to the 1980s, women in general and Black women in particular made big strides toward greater occupational integration, and more Black women entered clerical, management, professional, and technical fields—a process that explains a large share of the wage gains that Black women have made since the 1960s. Around 2000, however, the trend toward greater integration seems to have reversed slightly, and Black women continue to be greatly overrepresented in low-wage service-sector jobs such as in healthcare and retail. (See Figure 2.)
Figure 2
Latino men are overrepresented in many construction occupations, making up 17 percent of the entire industry, while they only represent about 9.3 percent of the U.S. workforce. As measured by the Index of Dissimilarity, which shows how many men or women would need to switch jobs in order to reach the same gender distribution in each occupation as in the overall workforce, Latinx men and women are the most segregated of the major racial or ethnic groups. (See Figure 3.)
Figure 3
Conversely, Asian American or Pacific Islander men and women experience the least gender-based segregation of the major racial or ethnic groups—though they also experience occupational segregation—and have made the greatest advance toward integration. AAPI women in the workforce are also more likely than their Black, Latinx, and White counterparts to work in management or professional fields, with 50 percent of AAPI women employed in those occupations. (See Figure 4.)
Figure 4
Conclusion
Progress toward a less segregated occupational distribution of work in the United States has stalled and, in some cases, reversed in the 21st century. This points to the persisting obstacles many women workers and workers of color face in the U.S. labor market. Striving toward greater integration would foster a more equitable economy and help counteract longstanding U.S. labor market disparities.
Between 1950 and 2000, as the share of women in a given occupation rose, wages in those positions tended to fall.
Overview
Occupational segregation is defined as a group’s overrepresentation or underrepresentation in certain jobs or fields of work. This factsheet elaborates on how occupational segregation in the United States has contributed to lower wages for workers along lines of race and gender and, in turn, contributed to broad wage inequality in the entire U.S. labor market. Furthermore, evidence suggests that the overrepresentation of marginalized groups of workers in occupations reduces their wages irrespective of other measures of productivity such as required skill level, and that integration across occupations has stalled out for Black and Latinx workers.
In the United States, job stratification along the lines of race, ethnicity, and gender impact workers’ labor market outcomes, with groups experiencing compounding privileges or disadvantages due to:
Occupational crowding
Devaluation of work
Uneven occupational integration
Occupational segregation and recessions
Occupational segregation, and income and wealth inequality
This factsheet presents evidence in all these categories to demonstrate how occupational segregation entrenches inequality and hurts workers’ labor market outcomes.
Occupational crowding
Occupational segregation lowers wages partly by reducing potential opportunities because it “crowds” marginalized workers into lower-paying jobs. The “occupational crowding” thesis was first developed in 1971 by the late economist Barbara Bergman, who argued that employer discrimination excludes Black men from desirable high-wage jobs for which they are qualified and steers them into lower-paying occupations. This, in turn, raises the supply of workers in those positions, depressing wages and diminishing workers’ bargaining power. In a later study, Bergman found that a similar mechanism impacts women’s labor market standing.
Building on Bergman’s work, economists Darrick Hamilton at The Ohio State University, Algernon Austin at the Economic Policy Institute, and William Darity Jr. at Duke University show that even when accounting for education, Black men are underrepresented in high-wage positions, including most management and professional occupations, and overrepresented in low-wage jobs, particularly in the service sector. Similarly, other studies propose that women’s greater care responsibilities crowds them out of higher-wage positions, since these tend to demand more work hours.
Devaluation of work
When analyzing why jobs with a greater share of women tend to have lower earnings, researchers found that between 1950 and 2000, as the share of women in a given occupation rose, wages in those positions tended to fall. These findings support the “devaluation” hypothesis, which proposes that work predominantly done by women is underpaid. Specifically:
Even when accounting for factors such as education and work experience, all workers experience an earnings penalty when holding jobs in women-dominated occupations. Black women face the largest penalty, but working in women-led positions hurts the earnings levels of men, women, Asian, Black, Hispanic, and White workers.
Positions in education provide a good example of this phenomenon. The share of public school teachers who are men fell from 32.2 percent in 1979 to only 24.9 percent in 2018. Research shows that men’s exit from this occupation could reflect a growing wage penalty, where teachers’ earnings have declined relative to comparable workers in other professions.
The devaluation hypothesis appears to be particularly relevant for gendered occupational segregation. So-called caring labor occupations, such as childcare, education, and healthcare where women remain overrepresented, have been shown to have lower wages and compressed wage distributions. This is due, in part, to lower bargaining power among workers, owing to moral commitments and work that is often done collaboratively with long-term, difficult-to-measure benefits.
Occupational integration has been uneven
By many measures, the U.S. labor market is currently less segregated than in previous decades. As the civil rights movement succeeded in removing most formal barriers to employment and education in the 1960s, women’s labor force participation rose, more workers of color were able to access high-wage occupations, and job stratification declined. Greater integration helped narrow gender and racial wage gaps in the second half of the 20th century and had an important effect on many worker’s labor market outcomes. Research estimates that the decline in occupational segregation between 1960 and 2008 explains about 60 percent of real wage growth for Black women, 45 percent for Black men, and 40 percent for White women.
But the decline of occupational segregation has not been constant or equal. Many trends toward greater integration stopped or slowed down in the past few decades, among them:
Even though millennials (those born between 1981 and 1996) experience less gender-based occupational segregation than Gen Xers (those born between 1965 and 1980) and baby boomers (those born between 1946 and 1964), all three generations face roughly the same level of race-based job stratification.
Starting in the 1960s, women in general and Black women in particular made big strides toward greater occupational integration as they began to hold more jobs in management, professional, and technical occupations. In the 1980s, however, that progress slowed down, and in 2000, it stopped.
Within racial and ethnic groups and since the late 1980s, Asian Americans and Pacific Islander men and women have made the greatest progress toward occupational integration, while the opposite is true for Latinx workers.
Occupational segregation and recessions
Economists also find that occupational segregation can become more severe with downturns, as well as help explain why some groups of workers are disproportionately hit by economic crises. Research by Michelle Holder of the City University of New York shows, for instance, that after the Great Recession of 2007–2009, Black men were further crowded out of mid- and high-wage occupations, while men in general experienced a greater spike in unemployment, largely due to their overrepresentation in positions that are more exposed to fluctuations in the business cycle, such as construction jobs.
Kimberly Christensen of Sarah Lawrence College also finds, however, that while women lost jobs at a slower pace than men, the Great Recession led to a shift in women’s occupational structure. As such, a sustained shrinking of the public sector following that recession has had particularly negative consequences for women of color, many of whom went from holding relatively well-paid and secure jobs in the public sector to being disproportionately hired in low-wage jobs in retail, leisure and hospitality, and healthcare.
How occupational segregation contributes to inequality
Occupational segregation explains an important portion of the persisting wage gaps between groups of workers. There are higher racial wage gaps in metropolitan areas with higher Black populations due to discrimination from high-paying jobs, rather than devaluation of jobs associated with Black workers, supporting Bergman’s occupational crowding hypothesis. Evidence from developing countries also finds that crowding of women into particular occupations reduces the overall labor share of income from growth in Gross Domestic Product, so workers are sharing less in economic growth. And occupational segregation not only shrinks immediate earnings but also harms workers’ job security, career advancement opportunities, and ability to accumulate and hold on to wealth.
Conclusion
The sorting of workers in the United States into different jobs along the lines of race, ethnicity, and gender remains one of the most pervasive features of the U.S. labor market. It also is important to note that this factsheet does not document the full extent of occupational segregation, with research showing that there is significant stratification along the lines of sexuality, language, and citizenship status. Limiting the opportunities of workers from marginalized backgrounds maintains wage inequality, further limiting economic security, and constrains the potential of our economy.
The United States is experiencing a severe recession attributable to COVID-19.
Overview
In February 2020, the U.S. unemployment rate was 3.5 percent. In May 2020, it stood at 13.3 percent. The unemployment rate for Black workers was a still-higher 16.8 percent. Unemployment for women exceeded that for men overall, among Black workers and among White workers. Adjusting for classification errors associated with the coronavirus pandemic would increase the overall rate by about 3 percentage points.1 Job losses were concentrated among lower-income workers and in sectors that rely on close physical proximity. In March and April, employment in the leisure and hospitality sector fell by nearly one-half; that is, there were half as many people working in that sector in May as there were just a few months before.
The emergence of the novel coronavirus that causes the COVID-19 disease led to this collapse in economic activity. This recession is unique in that it was caused by a global pandemic, but it also shares many features with the typical recession. One thing specifically: We know certain policies will support the U.S. economy while we work toward recovery. Automatic stabilizers—programs that automatically scale up in recessions and draw down during booms to stabilize the economy—play a critical role in fighting every recession.
In May 2019, Equitable Growth and the Hamilton Project published Recession Ready, which contained six proposals on automatic stabilizers. This issue brief examines the critical role that automatic stabilizers can play amid the current recession and in future downturns. The brief first explains what a recession is, what role public policy plays in fighting recessions, and then a few important ways in which this recession differs from previous recessions. Finally, the issue brief explains why Congress should expand and reform the United States’ existing automatic stabilizers.
What is a recession?
A recession is a broad-based decline in economic activity across the country. This general definition leaves substantial room for interpretation, however, and there is no hard rule for how big the drop in activity needs to be or how many different measures of economic activity need to fall. In identifying recessions, economists look for decreases in measures of activity such as production, personal income, employment, consumer spending, and retail sales, as well as increases in measures such as the unemployment rate. (See Figure 1.)
Figure 1
These measures of economic activity are better understood as different ways of looking at the same economy rather than entirely distinct measures of different things. If workers are laid off during a recession, they appear as unemployed workers when computing the unemployment rate and as a reduction in employment when computing total employment. The output they no longer produce appears as a reduction in output, and the income they no longer earn appears as a decline in personal income. The change in each statistic will differ based on exactly what it measures, but the decline in each statistic is a manifestation of the same underlying job losses.
The formal definition of a recession is the period when economic activity is decreasing. An expansion, or recovery, is when economic activity is increasing. This formal definition of a recession, however, does not capture the full extent of the economic suffering, which is generally a result of the depressed level of economic activity, not the rate of change.
Unemployment, for example, typically remains elevated long after a recession ends. The Great Recession ended in June 2009, according to the formal definition, but unemployment peaked in October 2009 and remained higher in 2012 than it was during most of the recession. (See Figure 2.)
Figure 2
The persistence of suffering after a recession ends according to the formal definition is essential for understanding the current recession. The National Bureau of Economic Research recently announced its determination that the recession began in February 2020. The unemployment rate spiked between February and April, increasing from 3.5 percent to 14.7 percent, before falling to 13.3 percent in May. It’s possible—though certainly not guaranteed—that the decline in activity was concentrated in those 2 months. The formal recession might be both extremely short and extremely sharp.
Yet even if this turns out to be true, it will certainly be the case that the suffering will persist long after the formal recession ends. Moreover, there are important risks that this will not be the case, including if Congress allows critical relief enacted in March and April to expire over the next several months or if public health measures are unable to control the spread of COVID-19.
For this reason, the term recession is often also used to refer to the longer period of depressed activity that persists after the formal recession ends, even though the official definition of a recession is limited to the period of declining economic activity.
Defining recessions in terms of aggregate economic indicators also obscures disparate experiences for different populations. As noted above, the unemployment rate peaked in October 2009 following the end of the Great Recession several months earlier. This peak in overall unemployment coincided with the peak for White workers, but the peak for Black workers was not reached until March 2010, 6 months later. Similarly, the peak for men occurred in October 2009, but the peak for women was not reached until November 2010.
The economic pain from recessions compounds longstanding racial inequalities. Unemployment rates for Black and Latinx workers are persistently higher than unemployment rates for White workers.2 During recessions, the increases in the unemployment rate are consistently larger for Black and Latinx workers than they are for White workers. Moreover, wealth is a critical source of support for workers who lose their jobs during a recession, but Black and Latinx households have less wealth than White households.
Finally, economic activity is not an end in itself. What really matters about economic activity is the role it plays in determining families’ living standards. Put differently, the economic harmcaused by a recession is not the decline in Gross Domestic Product or any of the other measures used to identify a recession. The harm is the decline in families’ living standards.
This distinction is of relatively little importance when thinking about the harm resulting from a recession absent policy action as a recession causes simultaneous declines in economic activity and living standards. But it is critical for understanding the policy response. Public policies can have different impacts on living standards and economic activity. Restrictions on business activities, for example, may reduce economic activity even as they increase living standards by reducing the spread of disease. The appropriate focus of public policy is living standards, not economic activity per se.
What is the role of public policy during a recession?
During a recession, it becomes harder for people to find (and hold onto) jobs and business opportunities. The policy response can provide direct relief, moderate the decline in economic activity, and accelerate the recovery. Policies are typically categorized as either fiscal policies or monetary policies. The fiscal policy response consists of changes in taxation and spending. The monetary policy response consists of actions taken by the Federal Reserve through and in financial markets, such as influencing interest rates and lending.
On the fiscal side, public programs provide critical relief to people hurt by a recession and shorten the recession itself. Programs that automatically scale up during recessions and scale down during expansions are known as automatic stabilizers, and many of the United States’ most well-known social insurance and safety net programs function as automatic stabilizers.
Unemployment Insurance provides cash to people who lose their jobs through no fault of their own, helping them maintain their standard of living. Even in relatively good times, some workers lose their jobs, and Unemployment Insurance serves this role. In bad times, Unemployment Insurance continues to serve this role while also short-circuiting the process by which cutbacks in spending by the newly unemployed spill over into reduced spending in other sectors, in turn causing even more job losses. Unemployment Insurance automatically scales up during recessions and down during expansions. (See Figure 3.)
Figure 3
Unemployment Insurance is perhaps the most prominent automatic stabilizer, but it is far from the only one. Medicaid provides health insurance to low-income families, automatically expanding during recessions, when incomes fall and more families become eligible. The Supplemental Nutrition Assistance Program provides assistance to low-income families in purchasing food and, like Medicaid, expands during recessions when incomes fall.
In addition to automatic stabilizers, Congress often responds to recessions by enacting additional policies specific to the recession. These new policies are known as discretionary fiscal policies, because they are enacted at the discretion of Congress. The American Recovery and Reinvestment Act of 2009 is an example of discretionary policy. The Recovery Act enhanced Unemployment Insurance, cut taxes, and provided financial support to state and local governments, including increased Medicaid payments, among other policies.
In addition to the fiscal policy response, the Federal Reserve responds to recessions using monetary and financial policy tools, which make it easier for people and businesses to borrow money. The logic is that this response will both prevent people and businesses unable to borrow funds from going bankrupt and encourage people and businesses to take on loans to support their purchases and investments, which will ramp demand back up to reverse the economic contraction.
The traditional monetary policy tool is control of the federal funds rate, which is the interest rate at which banks lend money to each other overnight. In recent decades, the Federal Reserve has reduced the federal funds rate during recessions and increased it during expansions. (See Figure 4.) These changes in the federal funds rate make borrowing cheaper during recessions and more expensive during expansions.
Figure 4
In both the Great Recession and the current recession, control of the federal funds rate has been insufficient to fully address the recession. During and after the Great Recession, the Federal Reserve set the rate to nearly zero for 7 years. In part for this reason, the Federal Reserve has increasingly relied on other tools, such as lending programs and asset purchases, to stabilize the economy as well. These programs aim to ensure that the deterioration of financial market conditions does not create additional stresses for public- and private-sector employers, further exacerbating the recession.
How is this recession different?
The coronavirus recession shares many similarities with previous recessions but is also different in some key ways. First, this recession occurred with unprecedented speed due to the sudden emergence and spread of the novel coronavirus. Second, the virus has made economic activity more dangerous. Third, because the recession was caused by a virus, the decline in economic activity has occurred alongside an increase in morbidity and mortality.
The onset of the coronavirus recession was sudden. In February 2020, U.S. unemployment was 3.5 percent. Employment stood at 152 million. In the week ending March 14, 250,000 people filed for Unemployment Insurance. Then, the recession began. The following week, 2.9 million people filed for Unemployment Insurance—by far the highest number on record and three times higher than the highest week during the Great Recession. The following week, 6 million people filed for Unemployment Insurance. And the filings have continued at a historic pace since then, with more than 40 million applications since mid-March. (See Figure 5.)
Figure 5
The rapidity of the coronavirus recession stands in sharp contrast to recessions more generally. Typically, unemployment is a lagging indicator; that is, it rises as firms lay workers off over time. For example, in December 2007, the month the Great Recession began, the unemployment rate was 5 percent. As the consequences of the financial crisis spread through the economy, it took 8 months for the unemployment rate to rise by 1 percentage point and another 4 months to rise by a second percentage point. In contrast, the unemployment rate rose 11 percentage points in 2 months in the coronavirus recession.
The speed with which the current recession began also is apparent in data on consumer spending and employment. Spending on travel, shopping, and entertainment plummeted in a matter of weeks. Overall, consumer spending fell by 19.6 percent between February 2020 and April 2020. Employment, particularly in jobs that involve close physical proximity, likewise fell sharply. About half of the jobs in leisure and hospitality were lost in March and April.
This brings us to the second distinguishing feature of this recession: The coronavirus has made economic activity more dangerous. In any other recession, being lucky enough to keep your job is almost certainly a good thing, but in the current recession, it’s more complicated. Being lucky enough to keep your job means you are much more likely to have maintained your income, but if you cannot perform your job remotely, it is also a risk factor for exposure to the coronavirus.
Existing patterns of occupational segregation in the United States play a critical role in determining who is hurt—and in what ways—by this unique feature of the coronavirus recession. Unemployment for Latinx workers, who are overrepresented in leisure and hospitality, has spiked more than for Black and White workers. Unemployment for Black workers, who had the highest pre-recession unemployment rate but are overrepresented in essential jobs, has increased dramatically but by a smaller amount.
The increased danger of economic activity changes the goals for the policy response. A typical recession does not change the cost-benefit analysis of working. In the coronavirus recession, the relative costs and benefits of work have changed for many jobs. This unique characteristic of the coronavirus recession required policymakers to act in unusual ways. Across the country, states and cities prohibit many types of economic activity to stop the spread of the coronavirus, shutting down businesses and asking—in some cases requiring—people to maintain greater physical distance from each other.
In principle, these shutdown orders could have induced the recession. Yet state closures appear to be responsible for only a modest portion of the decline in economic activity. Economic activity began to fall in early-closing states before closures began—and this gap is even more pronounced in late-closing states. In other words, people and organizations began to respond to the risks associated with the coronavirus before state orders took effect. In addition, a similar decline in economic activity is observed in states that did not issue formal stay-at-home orders. For the same reason, even as state orders have been relaxed, economic activity has remained substantially depressed.
Because the coronavirus makes economic activity more dangerous, a core focus of the policy response in this recession should be making jobs and other activities of economic life safer. Needless to say, in a typical recession, this is not a concern in the same way. By reconfiguring our economic life to improve safety, we lay the groundwork for the future economic expansion. The longer we delay addressing this task and the less we focus on it, the more severe the consequences of the coronavirus pandemic will be.
The third and final distinguishing feature of the coronavirus recession is the accompanying increase in mortality and morbidity attributable to the virus that caused the recession. More than 115,000 people have died from COVID-19 and more than 2million people have been confirmed infected in the United States. Moreover, there remains much we don’t know about the virus and the disease it causes, including how long the effects of COVID-19 will persist in those who recover, and how severe they will be afterward.
Existing inequalities continue to shape the health consequences of the coronavirus and COVID-19. Severe outbreaks occurred and continue to occur in prisons, nursing homes and other care facilities, and at worksites such as meat-packing plants. Mortality rates for Black people and for Latinx people far exceed those for White people, especially at younger ages. These differences likely reflect, in part, the fact that many of the jobs that rely on close physical proximity and have been deemed essential are held by Black and Latinx workers, as noted above.
How have policymakers responded to the COVID-19 recession?
Because the COVID-19 recession is caused by the emergence of a new virus, the most important response to the crisis is the public health response. But the Trump administration’s response has been ineffective and poorly managed. The United States lagged on testing throughout early 2020, which contributed to the undetected spread of the novel coronavirus.
The administration also failed to facilitate a coordinated response to the crisis in terms of managing supply chains, organizing or directing production of needed supplies, or providing clear guidance to people and businesses on appropriate health and safety measures. Numerous journalists have provided detailedaccounts of this ineffective executive branch response. This failure exacerbated the spread of the virus, and deepened the recession and will undermine the recovery.
For its part, Congress enacted four major bills in response to the COVID-19 crisis that President Donald Trump signed into law. First came the Coronavirus Preparedness and Response Supplemental Appropriations Act, on March 6; then, the Families First Coronavirus Response Act on March 18; then, the Coronavirus Aid, Relief, and Economic Security, or CARES, Act on March 27; and then, the Paycheck Protection Program and Health Care Enhancement Act on April 24.
The Coronavirus Preparedness and Response Supplemental Appropriations Act provided emergency appropriations to federal agencies to respond to the crisis and made changes to Medicare rules for telehealth services. The price tag was only $8 billion—by far the smallest response legislation.
The Families First Coronavirus Response Act provided a more substantial response. The legislation required public and private insurers to provide free coronavirus testing, provided increased Medicaid funding to states, created a paid leave program for employers with more than 50 and fewer than 500 employees, provided additional funding to pay for SNAP benefits, provided administrative funding for Unemployment Insurance programs, and provided supplemental appropriations for a variety of purposes. The estimated cost was $192 billion.
The major federal legislative response came with the CARES Act. It had a price tag of $1.7 trillion. (The legislation is estimated to increase the federal deficit by $1.7 trillion; it is sometimes described as a $2.2 trillion package because that is the gross amount of spending, tax cuts, and loan guarantees.) This legislation offered direct payments to most families, sharply but temporarily increased Unemployment Insurance benefits and expanded eligibility for the program, created multiple business loan programs, and cut and deferred a range of business taxes, among other provisions.
Finally, about a month later, the Paycheck Protection Program and Health Care Enhancement Act provided additional funding for the Paycheck Protection Program (one of the small business loan programs created by the CARES Act), additional funding for healthcare providers, and made additional appropriations.
The Federal Reserve also took unprecedented actions to address the economic fallout due to the coronavirus pandemic. The Fed cut the federal funds target rate by 1.5 percentage points in two steps in March. It also announced an open-ended commitment to purchase Treasury debt, government-guaranteed mortgage-backed securities, and commercial mortgage-backed securities. It also created and expanded several programs that lend to financial-sector institutions in an effort to ensure the smooth functioning of financial markets.
In addition, the Fed created new programs that lend directly to businesses, relying in part on funds appropriated by Congress in the CARES Act for this purpose, and started lending directly to state and local governments. Finally, the Fed is lending dollars to foreign central banks.
Why should Congress expand automatic stabilizers?
Nobody knows for sure how long the coronavirus recession will last or exactly how severe it will be. The uncertainty that would exist when confronting any recession is compounded by the uncertainty about the nature and consequences of the coronavirus itself, including the number of people who will die from COVID-19 now and in the future, the short- and long-term health impacts of the virus on those who recover, the pace at which treatments and vaccines will be developed, and the quality of the public health response.
As with any fiscal policy response, automatic stabilizers support household incomes and spending during recessions. Crucially, however, automatic stabilizers continue as long as they are needed without requiring further legislative action. If the recession is deeper and longer, then the response grows. If the recovery is quicker, then the response shrinks.
The coronavirus recession is the most severe economic downturn since the Great Depression. Yet key provisions of the congressional response to the pandemic are either scheduled to expire or were made available only in a fixed amount. The $600 increase in weekly Unemployment Insurance benefits expires at the end of July, for example, and state and local governments are facing a looming budget crisis but have received only a modest amount of aid.
The United States is currently experiencing a severe recession attributable to the emergence of a new virus. Unemployment jumped at a record-breaking pace, and daily life swiftly changed in radical ways. Policymakers responded quickly but insufficiently. Their response headed off the worst of the recession to this point, but Congress should move immediately to extend necessary relief and make it automatic by tying it directly to economic conditions.
COVID-19 shines a bright light on the role of crucial care work undertaken by some of the most marginalized workers.
The displays of solidarity among Black Lives Matter protesters and frontline healthcare workers across the United States over the past month demonstrate the underlying links between multiple crises involving public health, the economy, and racial justice. The COVID-19 pandemic shines a bright light on the role of crucial care work undertaken by some of the most marginalized workers—in particular, the overrepresentation of women, and especially women of color, among low-wage healthcare workers on the frontlines, including home health aides, nurses, and nursing assistants. And the historic marginalization of populations along lines of race, gender, and class, particularly for Black and Latinx populations, limits how our nation provides for and values care work in the United States.
The gendered dimensions of these crises also are present in our homes. Women still do more of the unpaid work of caring for their families and communities compared to men. Black women are more likely to be breadwinners while also being responsible for caregiving. The COVID-19 pandemic increases the need for family caretaking not only because of the closing of schools and childcare facilities, but also because more people are sick and need care.
Together, these crises experienced in our homes and our workplaces point a spotlight on the foundational role of care in our society: caring for each other in our families and communities, as well as caring for the health of society, including those low-wage workers such as nursing assistants, whose jobs are crucial to the functioning of health systems but earn near-poverty wages. Yet the work of care is undervalued and often invisible.
The foundation of this profound inequality lies in the traditions and structures of patriarchy, where unpaid or low-paid domestic duties have been the purview of women for millennia. Even as some of this work increasingly entered the marketplace through professional care jobs such as nurses and childcare workers, it is still perceived by society as having low value. And the lowest paid careworkers often are Black and Latinx women workers facing multiple structural barriers in the economy.
This is partly because of the difficulty in conceptualizing and measuring the long-term benefits of providing quality care, which is at least partly why this type of work was left out of most of the history of economics. But this also is because structural sexism and misogyny still influences how society perceives what jobs are worthy of fair payment and acknowledgement.
Research and analysis of these harmful trends is left out of most of academic economics and sidelined in economic policy in the United States. But paid and unpaid care work has been central to the development of a subfield of economics called feminist economics. These economic scholars bring to light valuable lessons centered in feminist thought to demonstrate the value of care and guide policy to improve the well-being of care workers and care recipients alike. Women’s physical and mental health—and, by extension, the societies that rely on women and this work they are doing—are at stake.
Our own research shows that the COVID-19 pandemic exposes how gender roles are embedded in the U.S. labor market and within families and communities, ultimately leading to more work from women than from men. Black feminist economist scholar Nina Banks argues that community work is both racialized, as well as gendered, so Black women are creating social and economic value through caring for others in their communities. This community care work is more crucial now than ever. Although many of the challenges for women are not unique to this time, the COVID-19 pandemic exacerbates their impacts, making this an important moment to recognize the gendered and racial structures underlying this work and advocate for policies that support their well-being and security.
Any comprehensive response to the COVID-19 crisis must recognize this gendered work as an integral part of an economic system that promotes human well-being for all. A call for a feminist economic agenda for the World Health Organization ran recently in medical journal The Lancet. A leader to take this approach is Hawaii’s Department of Human Services, which has issued a Feminist Economic Recovery Plan for COVID-19. It is the first time an official U.S. state agency has developed an explicitly feminist plan to deal with this pandemic. Priorities include building the state’s social infrastructure and supporting job creation in green industries.
This is a model worth emulating. Economic policy should be constructed within a broader, feminist framework of human well-being and justice. Economic policy that has been solely concerned with the achievement of output-based metrics such as financial stability and Gross Domestic Product growth have always been inadequate in addressing how patriarchy and structural racism determine economic outcomes. This is now more clear than ever.
Americans are protesting racial injustice nationwide during a pandemic that has affected people very differently based on who they are and what jobs they have. The federal government continues to plan another economic recovery package of uncertain size and scope. Both the American public and policymakers in Washington need to embrace a comprehensive response to the COVID-19 crisis that emphasizes the importance and value of care work within families and communities and in the labor market as an integral part of the economic system. We must judge the success of policy responses by how they promote human well-being for all.
This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.
Equitable Growth round-up
A new analysis shows that state paid leave programs in Rhode Island and California provided much-needed support to workers affected by COVID-19 as Congress debated enacting an emergency federal paid leave program earlier this year. (The study looks at these two states because they release timely data on paid leave claims.) Sam Abbottlooks at the research, which found that workers in these states were able to access benefits sooner and for a wider variety of reasons than in jurisdictions without paid leave programs. The federal paid leave program eventually enacted by Congress in the Families First Coronavirus Response Act is temporary and carves out large swaths of the labor force from coverage, making state and local programs—or a permanent expanded federal program—ever more essential for many workers. Abbott concludes with some suggested areas for further research that would more concretely show how government could provide this important safety net for all Americans both during and beyond the coronavirus crisis.
As the coronavirus health crisis and recession linger, another much-needed support for American workers must be extended, argues Alix Gould-Werth in an op-ed for Bridge Michigan. Congress should pass additional legislation continuing to provide the $600 weekly Unemployment Insurance add-on—currently set to expire at the end of July—until the health crisis subsides enough to ensure a safe return to work. Research shows not only that lower-income workers need this assistance to pay the bills while the economy remains in a downturn, but also that they tend to spend rather than save the benefit dollars they receive. Gould-Werth explains the virtuous cycle that these added benefits can have on local economies, channeling money to businesses, which then employ more workers, who, in turn, have more income to spend, stabilizing the labor market and stimulating the economy. And, while the most recent jobs day report showed a slight decrease in overall unemployment rates, Gould-Werth writes, this by no means indicates that workers don’t need this extra aid anymore. Instead, a thoughtful plan to phase out benefits as the crises diminish would ensure workers and the economy remain protected.
Congress can also support American workers by canceling all student loan debt—permanently. While lawmakers temporarily suspended payments on most federally owned student loans, the loan forgiveness law they passed in March will expire at the end of September. Darrick Hamilton and Naomi Zewdeexplain why Congress should enact a permanent student loan forbearance program for all loans and the effect such action would have on closing the racial wealth divide in the United States. Hamilton and Zewde also walk through previous presidential administrations’ attempts to lower student loan debt and the failures of each program to make inroads in reducing the crushing burden many young adults carry upon graduating.
Continuing Equitable Growth’s monthly Expert Focus series, which highlights scholars in our network and beyond doing important social science research, Christian Edlagan and Maria Monroelook at leading Black scholars studying U.S. economic inequality and growth. This group of researchers is looking at the roles of history, power, and institutions in shaping economic behavior and trends, and has influenced Equitable Growth’s understanding of the roots of racial inequities facing Black Americans, as well as how to address these inequities.
Yesterday, Equitable Growth hosted a webinar to explore bold policies that can ensure a broad-based economic recovery despite systemic inequalities in the United States, its economy, and society—particularly for Black and Latinx families. The two-panel webinar featured leading voices studying how current finance, banking, and labor laws and institutions exacerbate economic and racial inequality, and what we can do to address these issues going forward. David Mitchellexplains some of the guiding principles of the webinar and connects them to the current coronavirus pandemic and economic crisis.
Head over to Brad DeLong’s latest Worthy Reads for his takes on must-read content from Equitable Growth and around the web.
Links from around the web
Savings rates are on the rise amid the coronavirus recession, but unless benefits provided through government emergency-response programs are extended, Americans will soon need to tap into this extra money, reportsBen Steverman for Bloomberg. An unprecedented one-third of disposable income was put away over the past few months, thanks in part to the government-provided lifelines, but when these programs are withdrawn, households that have not yet recovered from the recession will almost certainly face financial hardship. Steverman shows why and how both low- and middle-income families would suffer without extended support.
American workers need a raise, writesThe New York Times editorial board. Not only have wage levels lagged desperately far behind, but workers also lack power in the labor market to demand working conditions and benefits that should be guaranteed. Income inequality is rising to unsustainable levels, and government is more beholden to special interests and the wealthy than the public they are supposed to be representing. The unapologetic pursuit of profits by large companies and corporations, large tax cuts for corporations, failed supply-side policies, and union membership declines have all led to a focus on shareholders and executives rather than American workers. But, as the coronavirus causes severe economic harm, the newspaper’s board concludes that now is the time to demand more from government so that future job prospects for many in the United States are not dim, but instead fairly compensate workers and ensure broad prosperity for all.
In interviews with 34 quantitative macroeconomists about the coronavirus recession and recovery, FiveThirtyEight’s Neil Paine and Amelia Thomson-DeVeauxdelve into what economists fear about the current situation and predict for the months and years to come. In the most recent surveys, the majority of economists said they expect an uneven recovery, with a sharp decline followed by a partial rebound and then slow, mixed growth. Because the recovery depends in part on the public health situation and in part on the government-provided benefits that many workers are relying on, the economy may face a bumpy road ahead. The economists surveyed also expressed skepticism that Gross Domestic Product may return to late 2019 levels before the first half of 2022, mostly due to a feared “second wave” of COVID-19 infections as well as an expected continuation of depressed consumer spending—particularly if needed government benefits are allowed to expire.
In this moment of widespread, global protests of racial injustice and police brutality, as well as increased support for the Black Lives Matter movement across demographic and political groups in the United States, lawmakers must consider enacting a reparations program for Black Americans. Over the past 100 years, there have been many instances of uprisings against White violence and anti-Black racism, but this time is different, Nikole Hannah-Joneswrites in The New York Times Magazine. Thanks to the confluence of horrific police brutality captured on video, a pandemic that starkly highlights racial divides in this country, and years of organizing for racial equality and justice, multiracial and multigenerational groups are finally united under this cause. Hannah-Jones details the history of the racial wealth divide in the United States starting with slavery, how it has held back Black Americans, and why a reparations program is the only way for true justice and equality in the United States to be achieved.
1. This is very much worth watching. David Mitchell, “Equitable Growth webinar will explore bold policies to ensure a broad-based economic recovery,” in which he previews the webinar that can be found here: “The recovery from the coronavirus recession must be different from the previous recovery … To have a chance of emerging on a stronger footing, with less economic and racial inequality and more sustainable economic growth, policymakers need to respond with robust, evidence-based measures that attack the underlying problems causing inequality and help achieve economic security for all. As part of our Vision 2020 initiative to ensure that the election-year economic policy debate focuses on big ideas grounded in the latest research, the Washington Center for Equitable Growth is hosting a webinar with top economic experts on June 25 to discuss the kind of bold policy initiatives that can help transform the U.S. economy … The first [panel], “Democratizing the Economy,” will focus on the need for new or drastically reformed institutions to address how financial institutions and the Federal Reserve have exacerbated inequality. The second, “Building Power for Workers and Families,” will describe how enhanced collective bargaining rights, public benefit and social insurance programs, anti-discrimination protections, and other power-building policies.”
2. Equitable Growth has launched a new monthly feature, “Expert Focus.” Please check out the most recent one by Christian Edlagan and Maria Monroe, “Expert Focus: Leading Black scholars on U.S. economic inequality and growth,” in which they write: “In this installment of “Expert Focus,” we highlight Black scholars whose cutting-edge research draws on the respective roles of history, power, and institutions … William A. Darity, Jr. [on] stratification economics, an approach to economics that focuses on economic disparities between persons, groups, and regions … Dania V. Francis [on] socioeconomic disparities in education, wealth accumulation, and labor markets [and] how to design and carry out a reparations program … Trevon D. Logan [on] historic links among intergenerational economic mobility, race, and the Black-White divide in income and wealth [and] school segregation, disinvestment from public goods, and divergent levels of investment in education since the 1950s [that] have combined to create a nexus of low mobility for Black Americans … Anna Gifty Opoku-Agyeman & Fanta Traore [on] the share of Black women awarded doctorates in economics … groups such as the Sadie Collective—co-founded by Opoku-Agyeman and Traore, a senior research assistant at the Federal Reserve Board—provide crucial support to help Black women thrive in fields where they are woefully underrepresented and where they can sometimes feel out of place … Jhacova Williams [on] the role of structural racism in shaping racial economic disparities in labor markets, housing, criminal justice, higher education, voting, and other areas.”
3. Back in the 1880s left-wingers and right-wingers; aristocrats, capitalists, and socialists; reactionaries and progressives could all come together and agree on demands for spending more money on better data and measurement in terms of economic statistics. Back then, all believed that their policies would be for the general good—in the long run at least. Today achieving consensus on investing in better data appears to be much more elusive. And that, I think, is incredibly worrisome. Read Heather Boushey and Somin Park, “The coronavirus recession and and economic recovery: A roadmap to recovery and long-term structural change,” in which they write: “Amid a pandemic and a steep and swift decent into recession, concerns about how policymakers calculate headline economic statistics may seem to be a misplaced priority. Yet … a continuing inability to fully appreciate and identify structural weaknesses in the U.S. economy for all workers and their families during the recession will make it even more likely that existing economic inequalities become further entrenched, to the peril of a more equitable economy emerging on the other side of the recession … Gross Domestic Product growth may once have been a reliable indicator … [but] many have been left behind over the past several decades … In an era where economic inequality has swelled to levels approaching those last seen nearly a century ago, policymakers need to know who is prospering from economic progress and who is suffering … The effectiveness of our policies to save the U.S. economy and ensure that growth is broadly shared depends on using the most precise measurements for today’s economy.”
Worthy reads not from Equitable Growth:
1. The bottom line appears to be that ending “lockdowns” in the United States will not produce rapid economic recovery. People have increased their savings substantially and are planning to do so next year, too, after the coronavirus pandemic has passed. Such an increase in savings requires an increase in planned investment spending (or in government public consumption spending) to maintain macroeconomic balance. But that maintenance of macroeconomic balance is not being greased by government action to make sure that that investment spending appears. And government consumption spending is not growing but shrinking as a new wave of austerity kicks in. But what about ending the lockdowns? Doesn’t that help? Probably not. Ending the lockdowns gets more people sick, which further raises savings. And the lockdowns themselves did not so much decrease spending as shift spending from nonessential (restaurants) to essential (grocery stores and take-out) spending categories. Read Simon Wren-Lewis, “Locking down too late but ending lockdown too early,” in which he writes: “The number of new infections is declining very slowly, which in turn means that most people will not return to previous patterns of ‘social consumption’ … [The] level of daily infections [at which] people will be happy to resume social consumption … is bound to be well below 17,000 … When I modeled the economic impact of a pandemic I was surprised at how much of aggregate consumption was social … The pandemic creates a huge demand shock even without any lockdown measures such as school closures. That is why many better-off households have been saving much more.”
2. I am sure that Vietnam missed some deaths, or that the ruling party regards reporting zero deaths as a boasting point to be maintained. But it looks as though as long as the country can maintain its 14-day quarantine requirement on those entering the country, the Vietnamese have this plague licked, and life can return to normal. Vietnam, New Zealand, Mauritius, and other nations, may well get out of this thing with the least economic damage. Read Jason Kottke, “Vietnam, Population 95 Million, Has Recorded 0 Deaths from Covid-19,” in which he writes: “Vietnam … recorded only 334 total infections and 0 deaths … on a 61-day streak without a single community transmission … They acted early and aggressively … [with] travel restrictions, closely monitoring and eventually closing the border … increasing health checks … Schools were closed for the Lunar New Year holiday at the end of January and remained closed until mid-May. A vast and labor-intensive contact tracing operation … sending everyone who entered the country—and anyone within the country who’d had contact with a confirmed case—to quarantine centers for 14 days.”
3. We have a Martin Luther King, Jr. holiday. We have Martin Luther King, Jr. elementary schools and statues. But White Americans, at least, do not pay enough attention to Martin Luther King, Jr., the man, and to what he thought, said, and did. Read Martin Luther King, Jr., “Letter from a Birmingham Jail,” in which he wrote: “While confined here in the Birmingham city jail … I think I should indicate why I am here … I have the honor of serving as president of the Southern Christian Leadership Conference, an organization operating in every southern state, with headquarters in Atlanta, Georgia. We have some eighty-five affiliated organizations across the South, and one of them is the Alabama Christian Movement for Human Rights. Frequently we share staff, educational and financial resources with our affiliates. Several months ago the affiliate here in Birmingham asked us to be on call to engage in a nonviolent direct action program if such were deemed necessary. We readily consented, and when the hour came we lived up to our promise. So I, along with several members of my staff, am here because I was invited here. I am here because I have organizational ties here. But more basically, I am in Birmingham because injustice is here. Just as the prophets of the eighth century B.C. left their villages and carried their “thus saith the Lord” far beyond the boundaries of their home towns, and just as the Apostle Paul left his village of Tarsus and carried the gospel of Jesus Christ to the far corners of the Greco Roman world, so am I compelled to carry the gospel of freedom beyond my own home town. Like Paul, I must constantly respond to the Macedonian call for aid. Moreover, I am cognizant of the interrelatedness of all communities and states. I cannot sit idly by in Atlanta and not be concerned about what happens in Birmingham. Injustice anywhere is a threat to justice everywhere.”
New analysis shows that while Congress was busy debating the parameters of federal paid leave to families dealing with the COVID-19 pandemic, state paid leave programs in Rhode Island and California were already at work providing much-needed support to affected workers. Because of longstanding paid family and medical leave programs in these two states, workers were able to access paid leave benefits sooner and for a wider variety of reasons than their peers in states without paid leave social insurance programs.
This column summarizes the key findings from this analysis—an empirically grounded starting place for understanding how workers are accessing paid leave during these public health and economic crises. It continues with a roadmap for researchers, including potential data sources and priority research questions identified by paid leave experts and advocates, interested in examining how state and federal programs supported workers during the COVID-19 pandemic and the recession it caused. Such research has important short- and long-term implications for policymakers developing an equitable, accessible, and permanent federal option for the nation’s paid leave needs.
Paid leave policy in the United States when the COVID-19 pandemic hit
Even before the onset of the COVID-19 pandemic, addressing conflicts between family and job responsibilities without access to paid family and medical leave was a challenge for U.S. workers. The current public health crisis and related illnesses and school and business closures exacerbate this challenge. While some workers can count on their employers to provide them with paid leave, it is rare: Only 18 percent of private-sector workers have paid family leave and 44 percent have paid personal leave though their jobs. Access to these benefits drops precipitously for lower-income and part-time workers.
Filling these gaps, eight states and the District of Columbia have developed their own paid leave social insurance systems, expanding leave access to most of their states’ private-sector employees. Five of these states—California, New Jersey, Rhode Island, New York, and Washington state—are currently paying out claims, while the remaining states and the District of Columbia will begin paying benefits in 2020–2023.
When the COVID-19 pandemic hit, these five states had the infrastructure in place to support workers’ time-off needs immediately, while families elsewhere were left to scramble with these new work-life challenges. Then, Congress, recognizing the importance of paid leave during a public health emergency, passed the Families First Coronavirus Response Act. Signed into law on March 18 and implemented on April 1, 2020, the new law provides the first federal guarantee to U.S. private-sector workers for paid sick days, which cover a short time away from work to deal with an illness, and paid family leave, which covers longer absences from work to care for a loved one.
This is an historic development for working families, but it is an imperfect solution. The law is temporary, carves out a wide swath of employees who cannot access paid leave, and only offers paid family leave for parents whose regular childcare provider is unavailable. This is a necessary benefit for those parents, but it leaves out many other reasons workers need time off, such as caring for a relative recovering from COVID-19.
While more data on the new federal paid leave system are surely forthcoming, the existing state-level programs offer important immediate insights into how paid leave can support workers during a period of crisis. These state systems were available from the onset of the pandemic and offer workers a wider array of benefits than the federal alternative. How they responded in the early days of the pandemic is an important lesson for policymakers considering a permanent and comprehensive federal paid leave program.
As COVID-19 spread, California and Rhode Island’s paid leave systems responded
A new analysis by the Urban Institute’s Chantel Boyens sheds light on how state systems responded to the increasing need for paid leave as COVID-19 spread. Boyens’ analysis of paid family and medical leave systems in California and Rhode Island, the two states that publicly release timely claims data, shows a sizable increase in new claims following the World Health Organization’s March 11 declaration of a global pandemic. Workers filing these initial claims accessed benefits weeks before the Families First Coronavirus Response Act was implemented.
In California, 106,989 new paid family and medical leave claims were filed in March 2020 and 99,695 were filed in April 2020. In March, the first month of the pandemic, claims rose by 29,601—or 38 percent—from the month prior, representing a 16 percent increase from March 2019. The majority of these new claims were for medical leave, but family caregiving claims also exhibited a 43 percent February to March increase and a 13 percent increase from the year prior. By April, medical leave claims remained 22 percent higher than the year prior, but family caregiving claims fell to prepandemic levels. (See Figure 1.)
Figure 1
On the other side of the country, data from Rhode Island tell a similar story, with one key difference. According to Boyens’ analysis, new family caregiving claims in Rhode Island nearly tripled from February to March—an increase from 1,016 to 2,841 new claims, or 180 percent. Medical leave claims also rose in March to 3,248 from 2,659, representing a 22 percent bump from the prior month. Claims in April did return to roughly prepandemic levels, though this drop was not uniform across all types of leave. (See Figure 2.) Unlike California, Rhode Island’s decline in claims was largely driven by a fall in medical leave claims, but family caregiving claims remained 84 percent higher than in April 2019.
Figure 2
In Rhode Island, the spread of COVID-19 remained low in the first half of March, but policymakers worked quickly to prepare the state’s paid leave system for the crisis. March 12, 2020, just one day after the WHO declared a pandemic, Governor Gina Raimondo (D) approved executive action that expanded the reasons individuals could quality for leave, waived waiting periods, and loosened medical certification requirements for those with a COVID-19-related illness. This effort to push workers toward the state’s paid leave system appears successful, particularly in the weeks before the federal program was accessible.
Boyens finds that the largest spike in claims occurred in Rhode Island in the second half of March, following the WHO’s declaration and Gov. Raimondo’s emergency order. The weekly peak of claims for family caregiving leave occurred later than that for medical leave, possibly due to the timing of statewide childcare center closures on March 16 or a lag in the public’s awareness of these benefits. (See Figure 3.)
Figure 3
Rhode Island’s weekly data include initial and continuous claims, so the number of claims presented in the weekly numbers exceeds the monthly data detailed in Figure 2. Still, the pattern in these data is clear: The number of workers requesting new leave or continued time away from work rose dramatically in the early weeks of the pandemic. These workers accessed benefits relatively early in the public health crisis.
Research on paid leave during the pandemic could offer valuable insight during the current public health crisis and beyond
Boyens’ analysis is an early glimpse into how the paid family and medical leave systems in two states responded in the beginning months of what is shaping up to be a protracted public health and economic crisis. More research is needed, however, to understand the accessibility and use of paid leave during this pandemic, not just in California and Rhode Island but also in the other jurisdictions with paid leave programs and the rest of the country accessing paid leave for the first time via the federal Families First Coronavirus Response Act.
In the short term, such research could inform programmatic tweaks to the Families First Coronavirus Response Act and other related programs. The new federal law constructed a paid leave system during a crisis and was unable to benefit from the existing infrastructure and public awareness available in states such as California and Rhode Island. More research on how the program is working in real time will help policymakers and regulators make necessary adjustments. For example, analyses that examine benefit eligibility and access by demographic groups may reveal opportunities for targeted public education. Further, any evidence that paid leave has positive public health implications or health system cost implications may encourage policymakers to expand the benefits offered through the Families First Coronavirus Response Act or extend the program beyond 2020.
In the longer term, research on how access to paid sick leave and paid family and medical leave supported workers during the COVID-19 pandemic will be instructive for policymakers designing a permanent system at the federal level. Already, existing research provides valuable insight into how such a system could be designed. Still, the Families First Coronavirus Response Act and ancillary programs are an opportunity to study alternative benefit models and delivery systems and learn from their successes or inefficiencies. Some important research questions include:
How are state paid leave programs, unpaid leave programs, and the Families First Coronavirus Response Act serving the needs of workers affected by COVID-19? How do these program compare in terms of:
The demographic and socioeconomic status of people served?
The eligible population’s awareness of the programs?
The sizes and characteristics of firms where employees are accessing leave?
The reasons for taking leave?
The duration and timing of leave-taking?
The return-to-work rate after the leave period?
Barriers to leave-taking?
Take-up rates?
The impacts on key outcomes, including health, material hardship, care recipient well-being, COVID-19 diagnoses, public health, hospital admissions, health insurance continuation, and health systems costs?
How do these paid leave programs compare to other programs that workers may have used for wage replacement when not able to work during the pandemic? Other programs include:
Unemployment Insurance
Workers compensation
Stimulus payments
Wages covered by businesses that accessed the Paycheck Protection Program
Wages covered by businesses that did not access the Paycheck Protection Program
Employer-provided paid time off
Unpaid time off
Private charitable contributions
For workers taking family caregiving leave, which family members are they caring for? How is this impacted by the definition of a “family member” included in the applicable paid leave program?
How does leave-taking behavior vary by the level of job protection (no job protection, anti-retaliatory protection, full job protection) included in the applicable paid leave program?
How does leave-taking behavior vary in jurisdictions that mandate employer-provided sick leave? Is paid family and medical leave being used to substitute sick days for workers without this benefit?
Does paid leave access impact the rate of COVID-19 infections? If so, how?
How have claims to state leave systems been impacted by the implementation of the Families First Coronavirus Response Act?
How are workers sequencing benefits during this crisis?
What is the leave-taking behavior of workers carved out of Families First Coronavirus Response Act? Are they foregoing leave, taking unpaid leave, accessing alternative benefits, using pandemic unemployment benefits, leaving work, or something else entirely?
For researchers interested in these or related questions, some potential data sources include:
State systems’ administrative data. California and Rhode Island share monthly leave data going back years, and New Jersey produces useful annual reports. Other states may be willing to negotiate data-sharing agreements with researchers.
The U.S. Census Bureau’s Household Pulse Survey, which includes several questions on paid leave use, caregiving needs, and other measures of economic security and well-being during the coronavirus pandemic.
The COVID Impact Survey, available from the University of Chicago’s National Opinion Research Center, which asks a variety of questions on respondents’ well-being, economic security, food security, physical health, and interactions with one’s community and social network during the coronavirus pandemic.
The Household Pulse Survey allows for the most direct comparison between workers with caregiving or health needs by paid leave access. If the survey continues, researchers may be able to study the impact of states implementing their own paid leave systems in the coming months. The District of Columbia will start paying benefits in July 2020, and Massachusetts will begin in January 2021. The COVID Impact Survey does not include a specific measure for paid leave access, but researchers can leverage variation in paid leave eligibility by state of residence or size of employer to generate intent-to-treat estimates.
Conclusion
Researchers have been studying the impact of paid leave for decades, but the coronavirus recession and the diversity of federal, state, and local responses raises new research questions about workers’ demand for paid family and medical leave and the most effective government response. Continuing to build upon the existing paid leave research base will inform a stronger federal solution that supports families, employers, and the economy during the remainder of this pandemic and beyond.
This past March, as a coronavirus relief measure, Congress suspended payments on a lion’s share of federally owned student loans for 6 months. When this temporary loan forbearance expires on September 30, it should be extended—permanently.
Many borrowers will not be prepared to begin making payments that soon. But more importantly, none of these student loan borrowers should ever have to make another payment. Cancelling these debts would benefit the U.S. economy, reduce the massive racial wealth divide, and create new opportunities for a generation of college graduates whose hopes the economy has wiped out twice in a dozen years.
The Coronavirus Aid, Relief, and Economic Security, or CARES Act places federal student loans in administrative forbearance. That means debtors still owe their full debt but need not make any payments, and no interest will accrue on the loan during this period. It’s a good idea to provide relief to the more than 40 million borrowers in our country, many of whom face staggering levels of debts, not to mention helping to sustain an otherwise bleak economy by putting some money in the pockets of consumers.
But this measure doesn’t go nearly far enough. This debt should not merely be suspended but cancelled entirely. Even before the coronavirus pandemic, federal student loan debt was crushing the financial and career aspirations of millions of borrowers. With college costs consistently rising faster than inflation and federal grant aid to students not keeping up, the aggregate amount of student debt is more than triple its level just 13 years ago—revealing the systemic nature of the trap created by a system of debtor’s education. Debt levels are especially high for Black students, who, 4 years after graduation, have an average obligation of more than $50,000, compared to less than $30,000 for the average White student. (See Figure 1.)
Figure 1
This higher debt load stems, in part, from the extraordinary gap in wealth between White and Black families. The median White household has 10 times the assets of the average Black family. (See Figure 2.)
Figure 2
Receiving less protection from parental wealth, Black students take on higher debt loads. Then, upon entering the labor market as young adults, these students face a harder time paying off their loans in a labor market characterized by racial discrimination. Evidence suggests that student debt has significant social impacts on the most vulnerable borrowers, including impeded family formation and poorer mental health. While student debt has conventionally been thought of as “good debt,” the investment generates widely disparate rates of return by race, given the prevailing social framework of unequal housing and Kindergarten through 12th grade education, predatory finance, and labor market discrimination.
The past decade and a half were especially cruel to college graduates. The scarring effect of the Great Recession of 2007–2009 is well-known. Those who graduated during that recession and immediately after will, on average, earn less throughout their careers. Yet, in part because of legislation permitting higher federal student borrowing, overall student borrowing began to skyrocket, surpassing credit card debt for the first time in 2010.
In addition, during the Great Recession, adults were encouraged to wait out the poor labor market and advance their career prospects by furthering their education. Many accrued more student loan debt but not all returned to the workforce with a degree or with the substantial improvement in earnings potential needed to pay off their debt. College costs are continuing to rise faster than overall inflation and federal grant aid is lagging, causing a significant portion of the millennial generation and its immediate successors to pursue adult lives with a millstone around their necks.
Cancelling student debt during the coronavirus recession and going forward with tuition-free universities would provide the greatest benefit to those who are suffering the most today. It is well-documented that people of color are contracting and dying from COVID-19 in numbers far out of proportion to their share of the population. Those service-sector jobs that don’t require a college degree, where Black workers and immigrants are overrepresented, are also less likely to provide access to insurance coverage or paid sick leave than other sectors. As the saying goes, when America gets a cold, Black people get the flu, but when America gets the flu, Black folks are far more likely to die. The anger we are seeing on the streets of cities across the nation is due not only to the violence imposed on Black Americans by discriminatory law enforcement but also is inextricably intertwined with social, educational, and economic injustices all created by the same society.
The concept of cancelling federal student debt is not a new one. Congress enacted loan forgiveness programs with Presidents George W. Bush and Barack Obama. The Bush program, initiated in 2007, focused on teachers and other public servants, as well as those working for nonprofit organizations, but it is exceedingly complex. Since loans became eligible for forgiveness in 2017, fewer than 3,400 borrowers have been approved for forgiveness, though nearly 200,000 have applied.
The Obama plan, which began in 2010, aimed at a far broader swath of borrowers. It enables borrowers to make payments based on a percentage of income. It also allows for cancellation of loans, but only after 20–25 years of payment. It is too early to tell how many borrowers will be aided by the cancellation element of the program, but, as with the Bush program, the Trump administration is showing that much can be done through administrative efforts to undermine this program’s intent by making it difficult for borrowers to qualify.
Cancellation of student debt was among the focal points of the recent Democratic Party presidential nomination campaigns. While some presidential candidates supported full student debt cancellation, former Vice President Joe Biden recently made a more modest proposal to forgive all undergraduate loan debt for borrowers who attended public colleges and universities, as well as historically Black colleges and universities, private minority-serving institutions, and for-profit colleges that disproportionately enroll Black students. Only those earning up to $125,000 would be eligible for forgiveness. In addition, Vice President Biden supports $10,000 in across-the-board loan forgiveness as a response to the coronavirus crisis.
There’s no question this proposal goes a long way and would cancel the loans of many millions of borrowers. Loan forgiveness, however, must be complete. Partial proposals—whether they limit the amount of cancellation, limit the source of debt to undergraduates, establish income ceilings, or distinguish between public and private institutions—leave us with the same mess of rules, income verification, and administrative burdens plaguing the previous, wildly ineffective attempts and will not protect young Black people seeking to use education as a tool for social mobility. Partial forgiveness would keep in place the unfair burden carried by this generation of borrowers, who were hit hard by higher debt and a double whammy of now-two recessions. Full cancellation is simple. It doesn’t pose administrative barriers, and it avoids the stigma associated with means testing.
Moreover, full cancellation leads naturally to what we consider to be the logical next step. Once Congress cancels all student debt, it should not stop there. Just as free public elementary education has effectively been a universal (though unevenly applied) economic right since the 19th century, free higher education should become the standard in the 21st century. Most young people have little choice but to pursue a college education if they wish to raise their socioeconomic standing beyond where they started out in life. And for many, higher education is a necessary step to earning a living wage. Providing tuition-free public higher education to all Americans would eliminate the social and psychological stigma associated with the current system of financial aid and eliminate the need for future generations to carry burdensome debts.
The coronavirus pandemic, the ensuing recession, and the community response to the police killing of George Floyd and far too many other Black Americans in 2020 and beyond bring into sharp focus the barriers American society places in front of today’s generation of Black students—barriers as old as our nation that continue to this day. Student loan debt exacerbates the challenges facing young Black Americans trying to establish careers and begin families. Eliminating this debt would be an important step toward reducing racial and economic inequality in the United States and bringing about the globally competitive, educated workforce that will unleash the country’s overall productive potential. As Congress and American voters facing a presidential election think about big solutions to America’s very big problems, this is one of the most important and effective actions we can consider.
The coronavirus pandemic and the ensuing economic recession have exposed and exacerbated many systemic inequalities in U.S. society, especially for Black and Latinx families. Even after a decade of growth following the end of the Great Recession in 2009, with low inflation and historically low unemployment, the U.S. economy before today’s crises was extraordinarily fragile, built upon a foundation weakened by rampant inequality.
The recovery from the coronavirus recession must be different from the previous recovery. The benefits of that recovery went largely to the wealthy and left the U.S. economy deeply vulnerable. To have a chance of emerging on a stronger footing, with less economic and racial inequality and more sustainable economic growth, policymakers need to respond with robust, evidence-based measures that attack the underlying problems causing inequality and help achieve economic security for all.
As part of our Vision 2020 initiative to ensure that the election-year economic policy debate focuses on big ideas grounded in the latest research, the Washington Center for Equitable Growth is hosting a webinar with top economic experts on June 25 to discuss the kind of bold policy initiatives that can help transform the U.S. economy. Titled “Vision 2020: Focusing on economic recovery and structural change,” the conversation will focus on how current finance, banking, and labor laws and institutions exacerbate economic and racial inequality, and what we can do to set the stage for strong, stable, and broad-based economic growth going forward.
The webinar will feature two panels. The first, “Democratizing the Economy,” will focus on the need for new or drastically reformed institutions to address how financial institutions and the Federal Reserve have exacerbated inequality. The second, “Building Power for Workers and Families,” will describe how enhanced collective bargaining rights, public benefit and social insurance programs, anti-discrimination protections, and other power-building policies can help Black, Latinx, and other workers emerge stronger from these crises.
The June 25 event is scheduled for 2:00 p.m. – 3:30 p.m. EDT. Click here to register.
After the Great Recession of 2007–2009, when the U.S. economy lost 8.7 million jobs and $12 trillion in total household net worth, one group emerged stronger than ever: the wealthiest 1 percent, who took only a few years to regain most of what they had lost. When the coronavirus crisis hit earlier this year, middle-class families were still recovering from that devastating shock 10 years earlier. To avoid a similar outcome, Boushey and Equitable Growth’s Somin Park have laid out principles for policies that can support the right kind of economic recovery. These principles, which underlie the ideas to be discussed in the upcoming webinar, are:
Recognize that markets cannot perform the work of government. As we see today, allowing markets to determine outcomes, while pretending that the rules that govern markets are always neutral and fair, has shifted economic risk toward individuals and families, especially those in communities of color, and away from wealthy institutions.
Address fragilities in our markets themselves. To prevent further corporate concentration across industries, policies must ensure the stability of U.S. small and medium-sized businesses. Black-owned businesses have been especially hard hit and urgently need support to survive.
Keep income flowing to all the unemployed workers and to small businesses now and in future crises. To strengthen the resiliency of families, businesses, and the economy, direct payments, Unemployment Insurance, small business grants and loans, robust aid to states, and emergency paid leave should be continued until the coronavirus recession passes.
Ensure those who are still employed can stay employed. To ensure that businesses do not become hotspots for transmitting the coronavirus, adopt widespread testing and tracing and provide protective gear to essential, front-line workers and others as necessary.
Produce headline economic statistics that represent the well-being of all Americans. To understand how the coronavirus recession and eventual recovery affect all Americans and make policy to ensure a broad-based recovery, measure not only average income growth or decline through Gross Domestic Product but also income changes up and down the income and wealth ladders and across demographic groups.
These principles also are consistent with the policy proposals contained in the book and conference that kicked off Equitable Growth’s Vision 2020 project, both titled Vision 2020: Evidence for a Stronger Economy. Taken together, the ideas contained in the book’s 21 chapters form the backbone of what could be an agenda for equitable growth in the third decade of the 21st century. Hertel-Fernandez, Morrissey, and Zewde authored or co-authored three of the chapters. Their proposals, which respectively address labor law reforms, early childhood care and education, and student-loan debt, will be discussed on Thursday in the context of recovery from the coronavirus recession. For summaries of those chapters, Equitable Growth is today publishing a Vision 2020 backgrounder focused on the coronavirus recession, which can be found here.
The health, economic, and social effects of the coronavirus pandemic and the ensuing recession have helped make the case for the kinds of big, bold ideas that are the basis of the Vision 2020 initiative. Join us on June 25 as some of the nation’s top scholars connect the dots between our current, multifaceted crises and the future structural change we so desperately need.
Equitable Growth is committed to building a community of scholars working to understand whether and how inequality affects broadly shared growth and stability. To that end, we have created the monthly series, “Expert Focus.” This series will highlight scholars in the Equitable Growth network and beyond who are at the frontier of social science research. We encourage you to learn more about both the researchers featured below and our broader network of experts.
Understanding the historic and persistent role that structural racism plays in driving wealth and income inequality, particularly for Black Americans, is central to addressing the health and stability of the U.S. economy. In this installment of “Expert Focus,” we highlight Black scholars whose cutting-edge research draws on the respective roles of history, power, and institutions in shaping economic behavior and trends. Though by no means an exhaustive list, the scholars highlighted here have influenced our understanding of the roots of racial inequities facing Black Americans and how to address those inequities through policy and research initiatives.
Ultimately, it is the collective responsibility of Equitable Growth and other policy and research organizations to actively confront our own biases and practices that reinforce anti-Blackness, as well as commit to addressing racism in economic and social institutions.
William A. Darity, Jr.
Duke University
William A. Darity, Jr., a member of the Washington Center for Equitable Growth’s Research Advisory Board, is the Samuel DuBois Cook professor of public policy, African and African American studies, and economics, and the founder and director of the Samuel DuBois Cook Center on Social Equity at Duke University. Darity is the founder of stratification economics, an approach to economics that focuses on economic disparities between persons, groups, and regions, and the structure of social hierarchy. In an interview with Equitable Growth, he discusses the importance of stratification economics in understanding U.S. economic growth and inequality. He has been a leading figure on changing the way economics discusses poverty and inequality, as well as the current policy debate on reparations for Black descendants of enslaved Americans. He recently published From Here to Equality, co-authored with Kirsten Mullen, which focuses on reparations and the inequalities borne from systemic racism. In addition, his recent work on the relationship between incarceration and credit scores helps connect structural racism in law enforcement to Black wealth accumulation.
Dania V. Francis
University of Massachusetts Boston
Dania V. Francis, an assistant professor of economics at the University of Massachusetts Boston, studies racial and socioeconomic disparities in education, wealth accumulation, and labor markets. In an essay for Vision 2020: Evidence for a stronger economy, Francis tackles the critical issue of how to design and carry out a reparations program in the United States that would help close the racial wealth divide and address discrimination, which she also touched on during Equitable Growth’s Vision 2020 conference last fall. Additionally, in a recent article with Anna Gifty Opoku-Agyeman, who is also featured below, Francis highlights the racial inequalities within the economics profession itself and outlines much-needed initial steps to address anti-Black racism.
Trevon D. Logan
The Ohio State University
Trevon D. Logan is the Hazel C. Youngberg Trustees distinguished professor of economics at The Ohio State University, a research associate at the National Bureau of Economic Research, and an Equitable Growth grantee. He specializes in economic history, economic demography, and applied microeconomics. His research in economic history concerns the development of measures of living standards that can be used to directly asses the question of how human well-being has changed over time. In his Vision 2020 essay, co-written with Equitable Growth grantee Bradley Hardy, Logan examines the historic links among intergenerational economic mobility, race, and the Black-White divide in income and wealth. They highlight recent research showing that school segregation, disinvestment from public goods, and divergent levels of investment in education since the 1950s have combined to create a nexus of low mobility for Black Americans. These and other policy decisions that persist today in terms of housing, education, and health continue to disadvantage Black Americans and limit the potential for overall U.S. economic growth.
Anna Gifty Opoku-Agyeman and Fanta Traore
The Sadie Collective
The team at the Sadie Collective organized its second annual conference in February 2020, named in honor of Dr. Sadie Tanner Mossell Alexander, the first African American to receive a Ph.D. in economics and the second Black woman to receive a doctoral degree in the United States. Fueling this effort is a new generation of Black women pursuing doctorates and careers in economics, finance, data science, and public policy. As the share of Black women awarded doctorates in economics is declining, groups such as the Sadie Collective—co-founded by Opoku-Agyeman and Traore, a senior research assistant at the Federal Reserve Board—provide crucial support to help Black women thrive in fields where they are woefully underrepresented and where they can sometimes feel out of place. This year’s conference featured conversations with Equitable Growth Steering Committee member Janet Yellen and Research Advisory Board member Lisa Cook. Recently, the Sadie Collective Community authored a powerful open letter to economic and policy institutions in the face of #BlackLivesMatter protests across the country. Also, listen to Opoku-Agyeman and Traore describe the Sadie Collective and their experience as Black women in economics here.
Jhacova Williams
Economic Policy Institute
Jhacova Williams is an economist for the Economic Policy Institute’s Program on Race, Ethnicity, and the Economy. At PREE, she explores the role of structural racism in shaping racial economic disparities in labor markets, housing, criminal justice, higher education, voting, and other areas that have a direct impact on economic outcomes. Prior to joining EPI, Williams served as an assistant professor at Clemson University. Williams’ research focuses on southern culture and the extent to which historical events have impacted the political behavior and economic outcomes of southern Black Americans. Her recent working paper, which examines the negative relationship between Confederate symbols and local labor market conditions for Black people, is helping to improve how we identify and measure the specific impacts of racism through research.
Equitable Growth is building a network of experts across disciplines and at various stages in their career who can exchange ideas and ensure that research on inequality and broadly shared growth is relevant, accessible, and informative to both the policymaking process and future research agendas. Explore the ways you can connect with our network or take advantage of the support we offer here.
