Wage Gaps, Unemployment, and Inequity: The Economic Impacts of A Pandemic In King County

Cross-posted from Communities Count. Written by Alexis Desrosiers, HealthierHere 

The economic impact of the COVID-19 pandemic, specifically the jobs lost as a result of the economic shutdown, has spanned across sectors and occupation types – with many factors influencing the ability of a sector, employer, or position to adjust to fit the new reality. Between March 1 – July 11, 2020, King County residents filed 435,905 new unemployment claims – resulting in a jump from the January 2020 unemployment rate of 2.7% to an unemployment rate hovering just over 14% in May for the total workforce.

Figure 1: Initial unemployment claims among highly impacted sectors in King County

During the height of the COVID-19 related job loss, five sectors were hit especially hard, accounting for nearly half of all initial unemployment claims filed: Accommodations and Food Services, Health Care and Social Assistance, Retail, Manufacturing, and Construction (Figure 1). In addition to a higher risk of job loss, the annual wages in four of these five highly impacted industries fall below the King County average of $94,764, with individuals working in the Accommodation and Food Services industry receiving the lowest average annual wage of $31,284 (Figure 2).). Job loss can impact all aspects of a person’s life, including mental health, housing stability, food access, loss of health insurance, and inability to pay for and/or access health care. These risks and impacts are often much more severe for low income individuals who may have limited ability to build savings and wealth over time and often have little or no access to “healthy” credit as a potential stopgap measure in the case of job loss.

Figure 2: Average annual earnings within highly impacted sectors in King County

Prior to the pandemic, jobs in these five highly impacted sectors represented 42% of the workforce in King County – but represented a higher proportion of the jobs within communities of color, in particular the Latinx, Black, and Native Hawaiian/Pacific Islander communities (Figure 3). This fact has left many communities of color not only at higher risk for job loss, but also highlights the economic inequities that existed before the pandemic and have now contributed to disproportionate economic impacts. In a recent interview, Janice Deguchi, executive director of Neighborhood House, stated that “the low jobless rates of the past several years masked just how precarious the financial picture was. The reality was that many people, particularly in immigrant communities and communities of color, were balancing multiple low-wage jobs just to get by, and the coronavirus has now toppled that house of cards.”

Figure 3: Jobs within highly impacted sectors in King County

While employment in low wage jobs and industries can place anyone at economic risk, what is seen nationally and locally in King County is ongoing wage gaps for communities of color and women. The average pre-pandemic annual wage in King County was $94,764, but examining average wage by race and ethnicity, it quickly becomes apparent that the only communities whose average wages meet or exceed that county-wide average are white and Asian individuals. For all other race groups, the average wage falls below the county average, with the widest disparity impacting the Native Hawaiian/Pacific Islander community who have an average annual income of $57,520 ($37,344 below the county average). This wage gap exists across all five of the highly impacted sectors, meaning that even within these already low-wage jobs, communities of color bring home lower wages than white and Asian workers within the same sector (Figure 4). It is important to note that these data for Asian Americans are not disaggregated, and the wage gap among Asians Americans continues to grow. These inequities are compounded by gender, with women of color experiencing the most persistent and pervasive wage gaps when compared to their white, male counterparts. The wage gaps across race/ethnicity and gender persist even when factors such as education level and job position type are accounted for, meaning that for communities of color and women, the positive economic impacts of seeking higher education and more senior work positions are never fully realized.

Figure 4: Average annual wages of King County by race/ethnicity and sector, Q1 2020

These wage disparities existed before the COVID-19 pandemic, and left many communities vulnerable to the severe impacts of job loss and the related risk of losing access to basic needs, including safe and stable housing, consistent access to nutritious food, and accessible, necessary healthcare.

Figure 5: Reasons for not seeking health care or not taking prescriptions,2019 HealthierHere Consumer Voice Listening Project Results, King County, Washington

These communities will be impacted even further if Congress fails to pass a stimulus package and allows the $600 monthly unemployment bonus to expire this week. These inequities, as well as their direct impact on the health of communities already experiencing significant health disparities both before and during the pandemic, will continue through the economic recovery and beyond unless efforts are made to address the structural racism and inequities that created and perpetuate them. 

Originally posted on July 23, 2020