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What we know (and what we don’t) about post-coronavirus employment

Commentary
June 12, 2020By Audrey Mechling

The City Club of Eugene held an online forum titled "What We Know (and What We Don't Know) About Post-Coronavirus Employment" on June 5. OCPP Policy Fellow Audrey Mechling led off the discussion, examining the vulnerability of low-wage workers prior to the pandemic, the loss of such jobs due to the pandemic, how the unemployment insurance system has responded, and the impact on workers of color. The City Club event also featured Ira Cuello-Martinez, who described the impact of the pandemic on day laborers; Margarita Sandoval, who discussed how the lives of domestic workers have been affected; and Joel Iboa, who explained the need for the newly created Oregon Worker Relief Fund.

Below is the recording of the entire program, as well as an annotated transcript of Audrey's remarks.

Hi everyone, and thank you for letting me virtually be here today to talk about employment in Oregon due to coronavirus. My name is Audrey Mechling and I work for the Oregon Center for Public Policy, a think tank that does in-depth research and analysis on budget, tax and economic issues. The Center’s goal is to improve decision making and generate more opportunities for all Oregonians.

Before I start, I want to take a moment to recognize that while I am here to talk about the coronavirus and resulting economic crisis, we are at the same time living through another crisis that predates our public health emergency, namely, the murder of black and brown people in this country at the hands of the police. The same racist structures that create vast economic disparities by race and ethnicity also lead to state violence being wielded against people of color. At the Oregon Center for Public Policy we stand with Black, Indigenous, and People of Color communities. I felt it was important to recognize this moment before we began.

Today I am going to talk about some of the things we’re seeing in the job sector during the pandemic. So I think it is important for me to acknowledge my privileged position in this sector. I am one of the workers privileged enough to be able to carry out my work from home, while so many others are forced to risk their health in order to work, or have lost their jobs entirely.

In recent weeks, coronavirus has completely changed the lay of the land of employment in Oregon. I am here to share 4 things we know about employment today, and one thing that we really don’t. Coronavirus has massively shifted the ground we stand on, and it has been the goal of OCPP to quickly understand this new and shifting landscape, and what it means for those who are struggling to get by.

The first thing we know about employment today, is that for many Oregonians, the crisis didn’t begin with coronavirus.

A huge share of Oregonians have been trying to get by on low wages for years. In December of last year, I authored a report showing who exactly the minimum wage workforce in Oregon is — and it paints a picture that defies stereotypes. At the time, we estimated that over 400,000 Oregonians worked in minimum or close-to-minimum wage jobs, and would be directly impacted by Oregon’s gradually increasing minimum wage. Most of these workers — over 90 percent — are adults. One in four have children that they need to support on their wages. Most are women, and a disproportionate amount are people of color.

A minimum wage worker working full-time in Eugene makes less than $1,950 a month. That’s far too little to afford the basics — food, rent, transportation, etc.

Before coronavirus made headlines, a lot of families — beyond those earning minimum wage — were skating on thin ice economically. A study from the Federal Reserve last year found that 40 percent of Americans couldn’t afford an emergency $400 expense. So in short, the coronavirus crisis hit our country at a time of already widespread economic insecurity.

That brings me to the second thing we know about employment today: low-wage jobs have been decimated. We are living in a historic moment, where unemployment has skyrocketed almost overnight.

As I am sure many of you know, in the last couple of months Oregon has seen unprecedented numbers of people filing for unemployment. Since March 15, over 400,000 Oregonians have applied for unemployment insurance, and layoffs have been concentrated in lower paying jobs. Oregon has also begun processing claims for many workers who were previously left out of the unemployment insurance program — those who are self-employed or independent contractors.

Nationally, we are seeing the same story play out. Unemployment claims went from an average of about 200,000 per week in January, to a peak of nearly 7 million claims filed in the last week of March.[1] According to the Bureau of Labor Statistics jobs report, job losses in April alone totaled over 20 million, and unemployment rose to 14.7 percent. That unemployment rate broke two records: it is both the highest unemployment rate, and the largest one month increase in unemployment going back to 1948, when the measure was created. Even more startling, these figures are already out of date, and are likely severely undercounting unemployment due to the prevalence of temporary layoffs. This is a problem created by how we measure unemployment - only those who are actively seeking a job are considered “unemployed” — a difficult task in the midst of a pandemic. For context, the best estimate of the unemployment rate during the Great Depression (which was before this measure existed) is about 25 percent.

The third thing we know, is that — as poorly maintained as the Unemployment Insurance system is — we should all be thanking our lucky stars that we have unemployment insurance.

Unlike the one-time stimulus checks that most of us probably received from the federal government, unemployment insurance offers weekly benefits to those who have lost their jobs. That stable source of income allows people to continue paying their bills, making their rent, and put food on the table. Without unemployment insurance, we would be seeing many many more Oregonians falling behind on their rent payments, relying on food banks, or simply going without.

That is why it was so crucial that our Senator Ron Wyden was able to secure huge improvements to unemployment insurance in the last federal aid package. By expanding UI to workers who were previously left out — the self-employed, gig workers, and independent contractors — and boosting the weekly benefit by $600, Congress helped ensure that workers would be supported during this crisis.

Unfortunately, over the decades we have failed to properly maintain our unemployment insurance system. Just like our bridges and roads can fail when we don’t maintain them, so it is with unemployment insurance. The Oregon Employment Department is having to rely on very old computer systems, even from the 1980s and 1990s.

As a result, this crucial resource is taking weeks to actually get to Oregonians. The Oregon Employment Department has been overwhelmed by the volume of claims, and some 200,000 Oregonians are still waiting for their first check. And while they are waiting, their bills are still coming, and their rent is still adding up.

But then again, the system is functioning for more than 200,000 unemployed workers. So in a sense, the economic suffering of Oregonians would be twice as bad without Unemployment Insurance.

Right now, if we measured unemployment insurance by dollars paid, it would be the largest paying subsector of Oregon’s economy. Unemployment insurance is one of the main engines keeping our economy running.

However, the fourth thing that we know about employment in the coronavirus era, is that unemployment insurance is still leaving a lot of people out - most notably, immigrants who lack legal status.

Undocumented immigrants do not qualify for unemployment insurance in Oregon, even though their employers often contribute to the unemployment insurance system on their behalf. By one estimate, some $270 million has flowed to Oregon’s unemployment insurance system due to the labor of undocumented workers.

Because undocumented workers are excluded from unemployment insurance, they are at much greater economic risk when they lose their jobs. This also means that for many of these immigrant workers, their lives are at greater risk. Just last week there was a large new outbreak of coronavirus among the largely Latino workforce at a local berry farm that was defying safety regulations. Unlike workers with legal status who could quit their jobs over safety concerns and collect unemployment, undocumented workers at this business had to choose between risking their lives to put food on our tables, and being able to put food on their own.

This, finally, brings us to what we don’t know about employment and the effects of coronavirus.

While state and national figures give us a sense of the scope of this economic crisis, there is so much that we do not yet know about who is being most impacted. I want to illustrate this point with an example. Last month, The Oregonian ran an article titled “Coronavirus layoffs hit all ethnic and racial groups”. The article makes use of a recent Employment Department report that analyzes the demographic breakdown of unemployment insurance claims to make the claim that while low wage workers have been hit hard by job losses. Quote: “the impacts are spread more evenly across ethnic and racial groups.”

Now, this statement may well be true. Based on the Employment Department report, it appears to be true. But. Based on data that we are seeing nationally, and the quality of the data we have available, I fear it is currently impossible for us to know if it's true. So let’s walk through this a bit more.

Nationally, there have been clear disparities in who has been most impacted by COVID related layoffs. A PEW Research Center survey found that over 40 percent of Hispanic adults in the US have or live with someone who has lost their job due to coronavirus. That is 17 percentage points higher than white Americans.

This finding also makes sense, as the industry hardest hit both nationally and here in Oregon is accommodations and food services. This industry has a long history of employing people of color at disproportionate rates, as black and brown workers have been relegated to low paying service jobs.

In Oregon, the accommodation and food services industry makes up over a third of all unemployment claims. This industry has been far and away the hardest hit by the virus. This industry also disproportionately employs black and brown Oregonians. 35 percent of workers in this industry are people of color, while they represent only 25 percent of Oregon’s population.[2]

It is possible that Oregon is an exception to the national trend of layoffs hitting Latino communities hardest. It is possible that despite black and brown Oregonians outsized representation in the industry that makes up over a third of unemployment claims wouldn’t result in similarly disproportionate levels of layoffs of black and brown Oregonians. It is possible that for reasons that aren’t currently clear, black and brown Oregonians really haven’t been hardest hit by layoffs.

However, it is also possible that the reason we are seeing unemployment claims in Oregon mirror the race and ethnic background of the labor force is because of low quality data and barriers that exist to black and brown Oregonians filing unemployment claims. Reporting demographic data on unemployment claims is optional, and in Oregon, 1 in 5 filers did not disclose their race. This leads to deep uncertainty about the accuracy of these conclusions, as respondents of color may be more likely to not report given the national conversation around race and immigration status. Further, as I mentioned earlier, immigrant workers who lack legal status don’t qualify for unemployment insurance at all, and would not be counted in this data set. There are other barriers too. For example, the online unemployment application is only available in English, and the department’s phone lines – the only way to contact a translator – are jammed with calls. Many black and brown workers may not even know they are eligible for unemployment insurance in the first place.

While we are living in a state of crisis, it makes sense why we are seeking concrete answers to questions. Uncertainty has become a much larger part of our daily lives than we may be comfortable with. However, despite our drive for clarity, we are still at a stage of this economic crisis where there are many more questions than answers.

But let me conclude by saying this. While it may be months, or possibly years, before we have concrete data available to tell us precisely who this economic crisis is hitting hardest, the crisis has only reinforced what was already clear before the pandemic: economic insecurity is widespread among working families. That insecurity flows from jobs that don’t pay enough, public structures left to whither, and persistent racist structures that continue to suppress and exclude our neighbors of color.

My hope going forward is that all of the suffering of Oregon working families becomes a catalyst for change, a catalyst for a more economically just, more secure future for everyone. Thank you.


[1] OCPP analysis of U.S. Department of Labor unemployment claims data.

[2] Accommodation and Food Services industry breakdown based on OCPP analysis of American Community Survey (ACS) 2014-2018 five-year Public Use Microsample Data. Analysis included those who were employed at the time of the survey, and used the North American Industry Classification System (NAICS) recode for the ACS based on 2017 NAICS codes. We defined people of color as any respondents who were not white, non-Hispanic. Oregon population demographic breakdown based on OCPP analysis of ACS 2018 one-year data.