As many as one-third of U.S. jobs may be vulnerable as a result of the coronavirus pandemic, and it will disproportionately displace low-income workers that do not have the financial cushion to absorb the economic blow.
Why it matters: The dire economic ramifications of the national shut-down stand to devastate those that can least afford it. Nearly 10 million Americans have filed for unemployment claims in recent weeks.
The latest: According to an analysis by McKinsey Global Institute, up to 86% of the vulnerable jobs paid less than $40,000 a year, and almost all (98%) of at-risk jobs paid less than the national living wage for a family of four ($68,808).
- Almost 40% of the vulnerable jobs are in small firms with fewer than 100 employees, which are less equipped than big companies to weather the storm.
By the numbers: An estimated 13.4 million vulnerable jobs are in the restaurant industry.
- Another 11 million vulnerable jobs are in customer service and sales (including 3.9 million retail clerks and 3.3 million cashiers).
- These are also the job categories likely to pay a median annual wage of less than $30,000, per McKinsey's data.
The potential job carnage spreads far beyond the service industry, affecting builders, transportation services, health aides, mechanics, social workers and some business and legal jobs.
- "If we have 25 to 30% of people not earning income, it's a huge shock" to the economy, Lund said.
A separate Brookings Institution report found that the workers most vulnerable to job loss are those with a high school diploma or less.
- "Even in a strong economy with low unemployment, these workers were already at the lowest run of the ladder" in terms of financial security, said Brookings Metropolitan Policy Program Fellow Martha Ross.
- About half of low-wage workers are either primary earners or contribute substantially to family expenses.
Depending on the region, Brookings found between 30% and 62% of workers earn low wages — with median hourly earnings ranging from $8.40 to $12.65. (This interactive tool lets you drill down into metro area.)
The largest metros have the most low-wage workers in absolute numbers. In the L.A. region alone, there are 2.7 million, including 500,000 retail workers, cooks and food servers, per Brookings.
- Tourism-dependent states like Nevada, Florida, Louisiana and Hawaii are likely to be hit hardest, McKinsey predicts.
- For example, more than half of jobs in the Las Vegas area are vulnerable as the casinos, hotels and restaurants went dark.
The other side: Demand is surging in other areas. The McKinsey report estimates that up to 3 million workers could find short-term employment in grocery stores, pharmacies, hospitals, e-commerce warehouses and as delivery drivers.
- Yes, but: Worries about exposure to the virus may prevent workers from seeking employment in those settings.
The big picture: The lack of protections — paid sick leave, safety rights and equitable wages — are now more apparent than ever.
