Recession Hits Workers Balancing Risks, Costs Especially Hard
People dealing with higher costs and risks from child care, education, lack of retirement savings and health issues have been hit particularly hard in the recession. Over the past two months, 25.4 million people lost their jobs and the labor market situation is expected to get worse before it will could get slowly better. Many families already bearing high costs and risks are quickly losing ground, making their financial struggles much worse.
The latest labor market data show that job losses disproportionately affected people working part time for noneconomic reasons. A little over 9.8 million part-time employees, who usually work fewer than 35 hours per week because of child care demands, health issues and other noneconomic reasons, lost their jobs from February to April 2020. This is equivalent to 38.6% of all job losses in that time period. Yet, part-time employees for noneconomic reasons made up only 14.0% of total employment in February. In other words, the risk of job losses for these part-time employees over the last two months was about 2.5 times as large as for full-time employees.
Many people choose to work part-time for a number of reasons. Some of the most relevant ones in the current situation include being in school or pursuing a training, balancing family obligations with work, being retired and trying to supplement retirement income, child care needs and struggling with health and medical issues while working for pay. All of these groups of part-time employees saw massive job declines in the span of just two months (see figure below). The largest absolute decline came for people pursuing schooling and education with 3.6 million jobs, followed by 2.0 million for those with family obligations, 1.4 million for retirees, 609,000 for those with health issues and 314,000 for employees balancing child care with paid work (see figure below). All in all, job losses among these workers accounted for 81.0% of all job losses among those who worked part-time for noneconomic reasons. The sharp labor market decline especially hurt those who worked part-time to handle additional risks and costs ahead of the crisis.
The data on relative employment losses underscore this point. The largest job losses relative to employment in February 2020 came among people with health and medical issues with 55.5%. That is, more than half of people, who worked part-time because of health and medical issues lost their jobs in the span of just two months. These workers likely had higher health care costs but the pandemic also put them at greater risk of suffering severe health consequences from the virus. The ensuing recession amid a weak social safety net and limited savings puts many people in a position where they have to choose between their physical and financial health. Many with health and medical issues ended up with less financial resources, while protecting their physical health.
Employees pursuing training and schooling will also face unenviable choices in the coming months and years. Many worked part-time to support their education. But more than half – 53.1% — of those jobs disappeared from February to April. This makes it much harder for people to pay for their education, even as the importance of an education and additional training has rapidly grown in a tanking economy. Many will likely postpone or completely abandon their education, whiles others will go deeper into debt and thus risking their future financial security.
The recession has hurt those the most, who need jobs to pay for higher costs associated with education, child care, family obligations and lack of retirement savings. As Congress ponders another round of financial assistance to help people and businesses, it is worth remembering that the economic pain of the recession is not evenly distributed. It has rapidly exacerbated existing financial struggles for many and policy responses will need to reflect this.
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