The blog of the Urban Institute
October 26, 2020

There’s Been a Concerning Lack of Progress for Communities of Color During the COVID-19 Crisis

October 23, 2020

Since March, more than 8.3 million American have contracted COVID-19, and more than 222,000 Americans have died. The economy lost more than 22 million jobs in March and April and has gained only half those jobs back since then.

Data show we’re experiencing a “K-shaped recovery.” This means higher-income households have essentially fully recovered, while lower-income families continue to suffer. And throughout the pandemic and its recovery, people of color have been disproportionately harmed by the “most unequal recession in modern US history.”

In July, the Urban Institute launched a tool that disaggregated data from the first phase of the US Census Bureau’s Household Pulse Survey to track racial and ethnic inequities in key social, economic, and health indicators. It helps users understand the effectiveness of recovery efforts for people of color. Today, we’re launching a new tool, using data from the second phase of the Household Pulse Survey, which started in late August.

We find that even after several months of substantial policy interventions and a partial economic comeback, people of color continue to suffer disproportionately from the pandemic’s economic fallout.

These four indicators show the persistent hardship and stark inequities of the COVID-19 recession.

1. More than one-quarter of adults live in households that drew down their savings or sold possessions to meet spending needs within the past week

As of late August, 27 percent of adults lived in households in which someone had used savings or sold assets within the previous week. Though research is limited on how frequently people drew down savings before the pandemic, these new data suggest that several months into the pandemic, more than one-quarter of adults did not have enough regular income to cover their spending needs. And Latinx adults were more likely than any other group to live in households that used savings or sold items to pay for spending needs in the previous week.

Adults in Households in Which Someone Used Savings or Sold Assets to Meet Spending Needs in the Previous Week

Other recent surveys found 14 percent of adults had completely exhausted their savings by August, so Pulse Survey figures likely understate the extent of economic hardship, only reporting those households that still had enough assets saved or worth selling.

2. Nearly 15 percent of adults live in households in which someone used unemployment benefits to meet spending needs within the previous week

As of August 15, more than 14.5 million people (PDF) nationally were still receiving unemployment insurance (UI) benefits, and 15 percent of adults were living in households in which someone had used UI benefits in the previous week. Consistent with their higher unemployment rate, people of color are significantly more likely than average to live in households with some UI use.

Adults in Households in Which Someone Used Unemployment Insurance Benefits to Meet Spending Needs in the Previous Week

Again, these data may understate the problem. It’s possible that people of color are still underrepresented (PDF) among UI recipients relative to their unemployment rates and that they’re receiving less benefits.

3. In mid-August, 15 percent of households were still behind on rent, with a higher share among Black and Latinx households

In May, 20 percent of adults reported living in households that had either not paid rent or deferred rent the previous month. By mid-August, an added question to the survey’s second phase found 15 percent of adults reported living in households that were still not caught up on rent payments. Communities of color fared worse than average for this measure: 19 percent of Asian adults, 20 percent of Latinx adults, and 24 percent of Black adults lived in households currently behind on rent, compared with 11 percent of white adults.

Renter Households That Are Not Caught Up on Rent

Though the Centers for Disease Control and Prevention’s eviction moratorium lasts through the end of the year, tenants are still responsible for paying rent, or they risk eviction when the moratorium lifts. Because people of color face greater job losses and decreases in benefits, many have serious financial constraints that hamper their ability to catch up to rent.

4. More than a quarter of adults expect an income loss in their household in the next four weeks

Despite a declining unemployment rate over the past months, in August, more than 26 percent of adults still expected to lose employment income in the following four weeks. And the share of expected losses is higher among communities of color, ranging from 31 percent among Asian households to 38 percent among Latinx households.

What could be responsible for these high percentages? First, income volatility is more common in lower-paying and hourly and service industry jobs, in which workers of color are overrepresented. Workers in these industries often find out the days and number of hours they are working with short notice.

Adults in Households with Someone Expected to Lose Employment Income in the Next Four Weeks

A second reason could be reductions in hours because of family care obligations. With many school districts starting the school year remotely, parents frequently must adjust their work schedules to accommodate children’s online learning. Thus far, these shifts have more severely affected women in the workforce, who have been reducing hours or leaving their jobs altogether at high rates.

What can policymakers do to close the gaps?

Multiple federal proposals aim to address the underlying challenges driving these ongoing disparities. Both the US House of Representatives and the White House have plans to restore some form of supplemental unemployment insurance and release another round of stimulus payments (though with some notable differences). However, neither of these packages is likely to be implemented before the election.

After the election, policymakers should work quickly to provide additional relief to prevent the damage of the past few months from solidifying into a more permanent social and economic devastation, and they should do more to explicitly address the challenges facing people of color.

 

Coronavirus survivor Azareth Amaya Gamez, right, embraces her mother Glenda Yaneth Amaya Gamez, left, inside their home in Miami Gardens, Florida, on August 11, 2020. (Photo by Chandan Khanna/AFP via Getty Images) 

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