Low income earners got crushed. Many high-income earners could work-from-home.
By Wolf Richter for WOLF STREET.
Trying to figure out what the actual unemployment situation in the US is has become tricky. The government produces two major indicators that contradict each other. The Department of Labor said last Thursday that 30.2 million people continued to claim state or federal unemployment insurance, based on actual unemployment claims that were processed, however behind they may still be. And the Bureau of Labor Statistics asserted that the labor market has improved rapidly since April, and that in June, unemployment was down to 17.8 million people.
There is a huge difference between the 30.2 million people on unemployment insurance rolls, as per the Labor Department’s weekly tally of unemployment claims, and the assertion that only 17.8 million people are unemployed, as per the Bureau of Labor Statistics.
In recent weeks, the Census Bureau has weighed in with its own weekly Household Pulse Survey, which shows a labor market that is still in terrible shape and may be getting worse, and the pain has spread far and wide into households.
The Census Bureau wisely doesn’t pretend to measure the number of unemployed, or the unemployment rate per se, because this would contradict the Bureau of Labor Statistics directly and everyone that cites the BLS unemployment rate. Instead, the Census Bureau shows from a different angle just how far and wide unemployment has spread as a grim reality.
The Census started the Household Pulse Survey in response to the Pandemic. Its “Week 1” was based on surveys sent to households in the week from April 23 through May 5.
This start date was well into the crisis. According to the BLS, April was the peak of the crisis, and according to the BLS, the unemployment recovery took off in May and June. But this was not the case in the data from the Labor Department. And it was not the case in the data from the Census Bureau.
“Experienced a loss of employment income since March 13?”
One of the questions the Census asks households is this: “Have you, or has anyone in your household experienced a loss of employment income since March 13, 2020?” yes or no, for whatever reason, not just layoffs, but also illness, having to care for a relative, etc. So, this is not a measure of “unemployment” per se, but of how the Pandemic has touched work-based incomes.
The latest survey was for “Week 12” – data collected from July 16 through July 21. It showed that of the adults (aged 18+) in the US, an astounding 51.2% had experienced a “loss of employment income” for whatever reason during the Pandemic. This was up from 47.0% during “Week 1” ended May 5:
Low income earners got crushed.
By income category, it is clear that the lowest paid workers were the most impacted by the loss of income, with the top income category being the least impacted. This splits into the types of occupations: lower-paid workers in the service jobs of the restaurant and hotel industry and other sectors that got totally crushed, and with the highest-paid jobs being most suitable to working-from-home:
% of Adults experiencing loss of employment income since March 13, by income category:
|Less than $25,000||60.1%|
|$25,000 – $34,999||58.2%|
|$35,000 – $49,999||57.3%|
|$50,000 – $74,999||51.6%|
|$75,000 – $99,999||47.2%|
|$100,000 – $149,999||45.9%|
|$150,000 – $199,999||36.5%|
|$200,000 and above||33.0%|
This “loss of employment income” varies by state, depending on numerous factors, including the states that got hit early and hard by the virus, and states with specific industries that shut down, such as casinos in Nevada, and states that have recently gotten hit by big outbreaks.
Across the US in Week 12, 51.1% of the adults reported a loss of employment income since March 13. Here are the 12 worst-hit states:
- Nevada: 65.6%
- California: 58.6%
- New York: 58.1%
- Mississippi: 56.2%
- Michigan 56.0%
- Hawaii: 55.8
- New Jersey: 55.4
- Louisiana: 54.6%
- Rhode Island: 54.0%
- Texas 53.5%
- Illinois: 52.5%
- Oregon: 52.4%
Done “ANY work” for the last 7 days?
To drill into the current work situation, the survey asks: “In the last 7 days, did you do ANY work for either pay or profit?” Yes or no, including all kinds of jobs and self-employment. What’s important here is to compare the results for Week 12 to Week 1 to see if this has improved – which it should have improved a lot, based on the BLS data.
Alas, in both Week 1 and in Week 12, 48% reported not having done any work over the “last 7 days.” Unchanged.
But Week 12 was the time of summer jobs, and in the age group of 18-24-year-olds, this improved by 6 percentage points, to 45% not having done any work over the past 7 days in Week 12. For other age groups it didn’t look so good:
- Unchanged for 25-39-year-olds, at 37%.
- Worsened for 40-54-year-olds by 1 point, to 36%.
- Worsened for 55-64-year-olds by 1 point, to 46%
This data from the Census Bureau corroborates the data from the Labor Department that the damage to employment has been huge, and widespread, and that it is perhaps shifting, but that the big recovery in May and June that the BLS has asserted is not yet visible in the data outside the BLS’ own fanciful math.
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