Coronavirus layoffs hurting low-income workers the most, study finds

More than 30 million Americans have joined the unemployment roll over the past 6 weeks

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Americans who earn the least are especially vulnerable to the historic surge of layoffs triggered by the coronavirus pandemic, according to a new study published Monday.

Workers earning less than $20 per hour were 115 percent more likely to be laid off, compared to their counterparts who earned more than $30 per hour, according to an analysis of payroll data by Gusto.

Since the virus gained a foothold in the U.S. in mid-March — prompting a majority of states to direct residents to stay at home to mitigate its spread — the layoff rate for hourly employees was 5.2 percent, more than double that of salaried employees. Hourly workers earning less than $20 per hour were laid off twice as much as higher earners (5.8 percent versus 2.7 percent).

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The higher layoff rate among hourly employees was likely driven by the impact of the virus on service industries like restaurants, bars and hotels. The vast majority of workers in food, beverage, accommodations and salon and spa industries are paid hourly (about 80 percent). More than 75 percent of those employees are paid less than $15 per hour.

The tidal wave of job losses was also more heavily concentrated in low-income areas. Employees who worked in businesses located in lower-income areas were 25 percent more likely to have been laid off, the study found.

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The dual health and economic crises is also disproportionately likely to impact younger employees: Workers under the age of 25 were 93 percent more likely to be laid off than those over the age of 35, according to the study.

Roughly 30 million Americans have joined the unemployment roll since the pandemic began. Unemployment at this scale hasn’t been recorded since the Great Depression, when the jobless rate peaked at 25 percent. With a total workforce of about 162 individuals, this brings the unemployment rate around 18.5 percent.

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Several states, including Georgia, South Carolina and Tennessee, have started to navigate reopening their economies, though it may do little to staunch the bloodbath in the labor market, according to Daniel Zhao, senior economist at Glassdoor.

"We may be past the peak of initial claims, but we aren’t out of the woods yet," Zhao said.

Congress has passed four massive economic-relief packages designed to blunt the pain from the crisis, including the $2.2 trillion CARES Act signed at the end of March, which expanded unemployment benefits by $600 per week through the end of June.

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