And this terrible economic burden arising from our government response to the COVID pandemic hasn’t hit everyone equally. An analysis performed by Pew Research reveals how this economic burden has been disproportionately borne by both women and younger workers.
Women have been hit harder by unemployment than men.
Male unemployment peaked at around 12% earlier this year, which equaled its peak during the 2010 Great Recession. However, COVID has proven more virulent than the financial crisis at eliminating jobs for women. Peak female unemployment hit just over 9% in 2010, but it exceeded 14% earlier this summer. This is likely because those industries hardest hit by the pandemic shutdowns (education, hospitality, and leisure services sectors) also employ a disproportionate number of female workers.
This burden on women is even stronger when broken down by race.
African American women experienced a peak unemployment rate this summer of just over 17%, which was two percentage points higher than during the Great Depression. African American men saw a nearly 16% rate of unemployment, which was over five percentage points lower than the peak rate back in 2010.
Similarly, one-in-five Hispanic women were unemployed earlier this year, which was six percentage points higher than the worst of the Great Depression. Hispanic men experienced a peak of 15.5% unemployment this year, which was equal to their experience back in 2010.
And younger workers are also feeling the blow.
One-in-four young adults aged 16 to 24 were unemployed this summer. This compares to a peak of one-in-five being unemployed during the Great Recession. Similarly, workers aged 25 to 34 experienced over 13% unemployment this year. This was also higher than the peak 11% rate of unemployment they experienced in 2010. The other groups experienced roughly the same level of unemployment this year as they did back in 2010.
How can these groups insulate themselves from further economic turmoil?
Education matters. The same Pew report notes that unemployment rates declined consistently with the level of education. In fact, men and women without a high school degree were over twice as likely to become unemployed this year (18%) than those with a college degree (7%). Both unemployment rates were roughly equal to those generated back in 201o.
Ultimately, there are few substitutes for human capital. Whether it be attaining specialized training using technical machinery or learning critical thinking and analytical skills in college, acquiring more human capital means ensuring more job security. It also means accumulating higher life-time earnings with a greater potential for generating that nest egg for a rainy day—like a pandemic lock down.