As the economy boomed, the labor market tightened and employers desperately sought workers last year, Tyhesui Scott was struggling to get by on the $8.25 an hour she earned as a home health aide. Then she grabbed an opportunity to train as a chef and landed a job with a Houston catering company.
With a starting wage of $14 an hour, the divorced single mother of six was able to catch up on bills, afford new clothes for her children and see a future for herself as she planned to work her way up through the food service industry. It all fell apart in March, when the coronavirus pandemic forced the cancellation of events large and small and the catering company laid her off.
Scott is working in home health care again, but only part time. The bills are piling up. She’s late with the rent. And she’s not sure how she’ll keep paying for the internet her children need to attend school remotely.
“I’m in debt now because I’ve been so late on everything,” said Scott, who lives in northeast Houston. “Some days, I’m super late on rent, and then there’s a late fee, and then I have to figure out how I’m going to pay that.”
Reversal of fortune
2019: 5.4 percent
2020: 13 percent
2019: 4.2 percent
2020: 10.5 percent
Workers with disabilities
2019: 7.2 percent
2020: 13.2 percent
Workers without high school diploma
2019: 5.4 percent
2020: 12.6 percent
2019: 3.7 percent
2020: 8.4 percent
Scott’s reversal of fortune is just one example of how quickly the trajectory of the U.S. economy has changed and set back the hopes and dreams of millions of Americans. As the nation celebrates another Labor Day, the outlook for workers has dramatically worsened from a year ago, when a decade of steady economic growth was finally reaching people historically pushed to the margins of society and the economy.
That progress has all but disappeared with the pandemic, which spurred the worst economic collapse since the Great Depression. Black unemployment, which fell to a record low of 5.4 percent last year, was 13 percent in August, while Latino unemployment, which also hit a record low, at 3.9 percent, was 10.5 percent.
Unemployment among the disabled in August soared to 13.2 percent, nearly double the 7.2 percent a year earlier. The jobless rate for workers without a high school diploma more than doubled to 12.6 percent from 4.7 percent in August 2019.
All are well above the national average of 8.4 percent.
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A recent report from the Federal Reserve Bank of Dallas found that minorities, workers who earn less than $60,000 a year, and individuals without college degrees are less likely to have jobs that can be performed at home, making them particularly vulnerable to layoffs and leaving them with few options to find work.
“Based on current conditions, they’ll probably have less opportunities,” said Yichen Su, the economist who authored the report. “The people who are already disadvantaged are experiencing that more so during the pandemic.”
‘No one helping’
Scott, 34, is trying to find full-time work — she hopes as a chef — but restaurants are closing and those that haven’t are fighting to survive with limited capacities and declines in consumer spending. Scott said she has applied for several jobs but never heard back.
Even if she finds full-time work, she’s not sure she could take the job because child care is in short supply. She said her children’s father isn’t in the picture, so she’s solely responsible for putting food on the table and helping her six boys with virtual schooling.
“I have no one helping me,” she said. “Every day, I face this by myself.”
The record economic expansion began in mid-2009 as the nation emerged from the worst recession in 70 years, advancing slowly, then steadily under President Barack Obama. The unemployment rate, which peaked at 10 percent in 2009, fell by more than half to 4.7 percent by the time Obama left office in January 2017.
The growth, supported by tax cuts, increased government spending and low interest rates, continued under President Donald Trump. In July 2019, the expansion became the longest in U.S. history, then it continued, driving the national unemployment rate to a 50-year low of 3.5 percent. Unemployment in Texas reached a record low of 3.4 percent.
With the tight labor market, employers expanded their recruiting to find workers, in many cases hiring and training people on the fringes of the labor force, including those who had given up looking for work. It all came to an end in February, just before the rapidly spreading coronavirus forced the shutdown of businesses across the country.
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Laura Alter, manager of employment services for Jewish Family Service of Houston, a nonprofit social services agency, witnessed the change. Clients who had just found jobs last year started calling about temporary work after getting furloughed. Soon after, she said, they were calling about finding new jobs after getting laid off.
The pandemic hit workers with disabilities particularly hard, Alter said. A study by the Kessler Foundation, a New Jersey charity that supports job training programs for the disabled, found that employment among working-age people with disabilities plunged by 20 percent in March and April, compared with 14 percent for those without disabilities.
Workers with disabilities face greater difficulties in finding jobs when unemployment is high and the labor pool is deep, Alter said, because some employers view them as “risky” hires requiring additional training and other accommodations.
Before the pandemic, Alter said, “employers were more open to hire people that may need more time to train, but now they are in survival mode.”
The coronavirus recession has set back workers and families of all backgrounds. A year ago, Stephanie Torres, 29, a manager at a convention hotel in Dallas, saw a bright future ahead. She was up for a promotion early this spring, but then cancellations began pouring in.
Not long after she interviewed for the job, she dialed into a conference call and was told she would be furloughed. And not long after that, Torres, who was six months’ pregnant, was laid off.
Her husband, a chef, also lost his job. Now, with a newborn son, they are plowing through savings as they try to find work and Torres studies to gain certification to teach.
“We knew we had a baby coming, so we had been saving for day care. Now, that savings isn’t going to day care,” Torres said. “It’s going to diapers, rent and our car payments. The savings account isn’t bottomless.”
Shape of recovery
Many economists expect the economy to rebound slowly, although they disagree on the shape of the recovery. Some argue for a U-shaped recovery, meaning a long stretch of weak gains before the economy picks up strength. Others forecast a “W,” shorthand for a short period of recovery, then another recession before a more sustained expansion.
Mark Zandi, chief economist at Moody’s Analytics, the research unit of the bond rating agency, described a “K” shape recovery, as some groups rebound quickly from the recession while others continue to struggle. The split will come along the same lines of race, income and education exposed by the recession, he said.
Those with jobs, skills and access to technology to work from home will prosper, while those without — particularly in customer-facing industries such as restaurants and retail — will fall further behind.
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“It’s a big divide with winners and losers,” Zandi said. “It’s going to be harder for those on the front lines and were not able to adjust to the pandemic.”
Ultimately, the speed and shape of the recovery will be determined by progress in controlling the pandemic, Zandi said. An effective, widely available vaccine would likely lead to a strong rebound, he said. Without one, the economy faces a slow adjustment as more effective tests and treatments are developed.
The November election also could affect the path of the recovery, Zandi said, as the next president and Congress confront issues such as health care, housing, education and child care.
With her 11-year-old son at home and attending school virtually, Carma Bennett of Dallas has been trying to find a job that would allow her to work from home since she was laid off in March from a job verifying insurance at a doctor’s office. But it hasn’t been easy for Bennett, 46, who doesn’t have a college degree.
Bennett was among the millions of Americans who left the labor market during the past decade but were able to re-enter as the economy boomed. When she took the job in the doctor’s office two years ago, she had a seven-year gap in her résumé while she was a stay-at-home mom.
The extra money allowed Bennett and her husband to start saving to buy a home. Her husband, a truck driver, is still working, but the loss of her income has pinched the family budget and forced them to dip into savings and delay the dream of owning a home.
“I want to be able to provide for our family, so we can live in a decent neighborhood where we have decent schools,” Bennett said. “I’m pretty much open to doing any (job) from home at this point.”