People who make less than $30,000 have lost their jobs at higher rates during the, and struggle to find new ones, a new analysis shows — even as higher earners have seen their job prospects recover.
Employment for lower-wage workers remains 14% below pre-pandemic levels and is trending downward, according to the Federal Reserve Bank of New York analysis, as President Joe Biden and others warn of a so-called "K shaped" recovery where a portion of the American workforce gets left behind even as others see a rebound. Employment for high-wage workers is now slightly above its level from when the pandemic first hit nearly a year ago.
"The American people are hurting," Biden said in an Oval Office meeting Tuesday with business leaders to discuss his ". "A lot of people are in real, real trouble." He argued they need to move quickly on both getting the virus under control and addressing the economy.
Low-wage workers, the Fed's analysis found, are people who typically earn less than $30,000 a year and work in jobs such as food servers, cashiers, home health aides and childcare workers. High-wage workers include those who earn more than $85,000 a year in professions such as lawyers, software developers, engineers and other business executives.
Employment for workers in the middle — those earning between $30,000 and $85,000 per year — was also slightly below pre-pandemic levels from a year ago.
"Given the number of people who have lost their jobs and the likelihood that some will struggle to find work in the post-pandemic economy, achieving and sustaining maximum employment will require more than supportive monetary policy," said Federal Reserve Board Chairman Jerome Powell in a Wednesday speech to the Economic Club of New York. "It will require a society-wide commitment, with contributions from across government and the private sector. The potential benefits of investing in our nation's workforce are immense."
While one of the Fed's greatest tools for influencing the economy is its setting of interest rates, Powell said that he did not foresee raising rates. Powell said they are setting policy to "best achieve maximum employment and price stability."
His comments come as some lawmakers raise concerns about the level of debt and the size of the federal budget.
"My own view is fiscal authorities will need to return to this question, and the time to do that though is not now when the economy is weak, when we have 10 million people unemployed," said Powell. "It's just not the right time to be focused on addressing those issues. That time is when the economy is strong, unemployment is low, taxes are rolling in. That time will come."
Lawmakers working to passare discussing a proposal that would change the income limits for people eligible to receive stimulus checks. In past rounds, individuals who made less than $75,000 and couples who made less than $150,000 received the full amount, but some lawmakers are
Nearly a year into the pandemic,and in-person activity remains severely limited to help stem the spread of the virus as officials slowly distribute vaccinations.
According to the new study, part of what is contributing to the employment gap between high and low wage workers is the ability of high-wage workers to work from home. The analysis found, on average, nearly 60% of workers in the high-wage group reported being able to telecommute during the pandemic, but less than 10% of lower-wage workers could work from home.
The study finds more low-wage workers voluntarily or involuntarily leaving jobs to stay home than high wage workers — who may not have had to risk going in to work during the pandemic. Part of the Federal Reserve Bank of New York's latest findings examined cell phone data to identify workers who continued to commute to work during the pandemic versus those who were able to stay home. It showed a greater decline in commuting for higher income counties.
The cellphone location data also suggests workers in counties with more people of color transitioned to working from home later than in counties with smaller minority populations, where workers began to work from home before the shutdowns began.
Meanwhile, majority-minority counties also saw workers return to work at higher levels than other counties, indicating employees there rely on jobs where they were less likely able to work from home.
This comes as COVID-19 in the United States has proven to have a, suggesting the inability to work from home rather than commute to work contributed to higher levels of COVID-19 vulnerability.
Participation in the workforce fell more dramatically for Black workers at the beginning of the pandemic, and the recovery for Black workers has continued more slowly. The analysis found while the Black-white unemployment gap has narrowed as of the end of the year, the rate of Black workers not participating in the workforce remains higher.
The income and racial gaps in the workforce and uneven recovery have been something Biden administration officials have warned about now for months.
Speaking last week with Black Chambers of Commerce, Treasury Secretary Janet Yellen warned economic crises hit people of color "harder and longer" and push the country further toward inequality.
"I'm worried that the current crisis will do this again," said Yellen. "In fact, I know it will unless we act."