The blog of the Urban Institute
May 8, 2020

Latinx Unemployment Is Highest of All Racial and Ethnic Groups for the First Time on Record

Since the national emergency declaration for COVID-19, more than 33 million Americans have filed for unemployment insurance, and economic forecasts place the United States on the path to recession. No group has escaped the devastating economic effects of COVID-19, but today’s US Bureau of Labor Statistics (BLS) report on nationwide, industry-level job loss data (the first evidence showing how racial and ethnic groups have fared across industries amid COVID-19) show that job losses have hit Latinx workers harder than any other group.

For the first time since 1973, when the BLS began tracking unemployment by ethnicity, the Latinx unemployment rate is the highest of all racial and ethnic groups, at 18.9 percent in April. The unemployment rate is 16.7 percent for Black people, 14.5 percent for Asian people, and 14.2 percent for white people (though it’s likely even higher for all groups, as these survey data reflect responses collected during the week of April 12 to April 18).

A long legacy of exploitation and occupational segregation of workers of color has disproportionately concentrated Latinx workers in low-wage industries, many of which have proven most vulnerable to layoffs during this crisis. Understanding the disproportionate unemployment risk facing Latinx people can inform strategies to help workers hit hardest by the COVID-19 employment crisis.

Latinx workers are least likely to have jobs that can be done from home

The Urban Institute’s Health Reform Monitoring Survey (HRMS) conducted in March and April of this year found that only a quarter of Latinx workers could do at least part of their job from home—the lowest rate of all racial and ethnic groups. The relative inability for most Latinx workers to work from home means they are at greatest risk for losing their jobs or continuing to work outside their homes, putting them at a greater risk of contracting COVID-19.

The high Latinx unemployment rate is largely driven by overrepresentation in the hard-hit leisure and hospitality industry

The leisure and hospitality industry, where 37 percent of all April job losses occurred, is the second-largest employer of Latinx workers (following construction). According to BLS data, Latinx workers make up 18 percent of the total workforce but account for 27 percent of workers in the leisure and hospitality industry. Job losses in this sector were concentrated in food and drinking places (5.5 million of the 7.7 million jobs lost in the industry overall), where Latinx workers also make up 27 percent of workers.

If the jobs lost in leisure and hospitality in April were distributed proportionally to the share of Latinx workers in this industry, more than 1.7 million Latinx workers would have lost their jobs in the leisure and hospitality industry last month, accounting for more than half (52 percent) the total increase in Latinx unemployment.

Latinx workers are also overrepresented in other hard-hit industries and subindustries. In “other services” (a category that includes jobs in laundry, repair, and maintenance services) and in construction, Latinx workers make up 20 percent and 30 percent of the workforce, respectively.

Latino workers jobs day unemployment chart

Unemployment data don’t tell the whole story of employment-related cuts

These BLS data provide an important window into the disproportionate burden that communities of color have shouldered from COVID-19-induced unemployment. But they do not capture negative effects on other employment-related indicators, such as cuts to hours or pay.

The HRMS survey found a higher share of all adults had their work hours reduced or lost work-related income than lost their jobs altogether. The survey found 57 percent of Latinx adults experienced one of these outcomes, compared with 41 percent of Black adults and 38 percent of white adults. Latinx adults living in families with noncitizens were substantially more likely to have experienced one of these outcomes (69 percent) than in families where all household members are citizens (49 percent).

How can we make sure relief reaches workers who have been hit hardest?

Make unemployment insurance more available and more accessible

The current unemployment insurance supplement expires in July, but efforts to extend it could help stabilize families for longer. Also, people who are undocumented or live in mixed-status families, many of whom are Latinx, are ineligible for unemployment insurance. The federal government could make unemployment insurance available to everyone who files tax returns and is income-eligible, regardless of immigration status, the same way it has with stimulus checks from the Coronavirus Aid, Relief, and Economic Security Act.

Additionally, California has committed to providing $125 million in financial relief to its undocumented workers through a public-private partnership. The federal government could follow California’s lead and provide stimulus support to all Americans who fall within the income eligibility guidelines, regardless of immigration status. 

Continue to refine the Paycheck Protection Program (PPP)

The misallocation of PPP dollars could harm Latinx workers. The accommodation and food services sector (where Latinx workers are overrepresented) experienced 31 percent of all April jobs losses but received only 9 percent of dollars in loan assistance to small businesses during the first round of the PPP.

This could affect workers and business owners. Even though initial data releases about PPP-aid recipients did not include information on the race or ethnicity of the business owner receiving the loan, early reports suggest only a small share of eligible person-of-color-owned businesses received aid through PPP.

Efforts to ensure more PPP dollars get funneled to minority- and women-owned business enterprises would better connect resources to business owners of color (PDF). Setting aside sufficient resources for community banks (PDF), which have higher rates of engagement in communities of color, would also help address this loan gap. And requesting that loan applicants provide proof of revenue losses could also improve the allocation of PPP dollars to ensure this support reaches those most in need.

Extend safety net benefits, particularly health insurance

Losing a job, even if unemployment is compensated, is burdensome on workers and their families. Beyond causing general anxiety, many workers also lose their health insurance at a time when it’s most needed. This risk is exacerbated by the fact that workers of color are already uninsured at higher rates. Sustaining the health insurance protections established under the Families First Coronavirus Response Act beyond its expiration date could help families keep their insurance, and increasing the federal Medicaid matching rate could encourage states to expand their protection.

Develop a jobs program to train and hire people for new jobs

Reports estimate that anywhere from 30 to 50 percent of restaurants will permanently close as a result of the COVID-19-related lockdowns. Given the relatively high percentage of Latinx workers employed by restaurants, many face the prospect of needing to find new careers. A jobs program may help not only with the economic recovery by boosting employment but also with training people for careers with better pay and stronger protections.

Wendy Melendez, a 46-year-old custodian at Tufts Medical Center, poses for a portrait outside the hospital on March 25, 2020 in Boston. Since the coronavirus swept into Boston two weeks ago and sent most office workers home with a laptop in tow, Burley has continued to clean up after the few employees who still trickle into the Back Bay buildings. She did so up until Tuesday, even as the states confirmed cases soared past 1,000 and deaths reached the double digits. She is just one of more than 1,000 cleaners and custodians in Massachusetts and Rhode Island facing unemployment as building tenants cut costs and employers shrink their payrolls during the pandemic. Meanwhile, those who remain at work, in hospitals, grocery stores and condominiums, fear for their lives and their livelihoods each day. (Photo by Jessica Rinaldi/The Boston Globe via Getty Images)

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