Minnesota’s Economic News – W/E 4/16/21
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Throughout the duration of the coronavirus, it has become clear that the effects of the virus are being borne disproportionately. Older people and people with pre-existing conditions seem to make up a majority of COVID-19 deaths. Small businesses have made up a huge number of most permanent business closures. And when it comes to job losses, low-income individuals have been hit the hardest with job losses.
Job losses have disproportionately been concentrated in the hospitality industry. This is mainly because lockdowns targeted businesses in this sector. According to the Bureau of Labor Statistics, in May 2020, the hospitality industry had 50% fewer jobs compared to May 2019. The heavy implication with this is that most job losses have occurred to people in that industry. And the hospitality industry employs a lot of minorities.
Nearly 1 in 2 Black workers in Minnesota have applied for unemployment benefits since mid-March. For white workers, it is about 1 in 4, according to the Minnesota Department of Employment and Economic Development (DEED).
Some have returned to work as businesses have reopened, but a wide racial imbalance remains among those who are still jobless. More than one-quarter of Black workers were still making weekly unemployment claims last month compared with 9% of white workers.
It is partially true that some businesses were already losing customers before the lockdowns were instated. And it is quite possible that people were going to stay at home more even without a stay at home order, which would have meant some businesses shutting down. But the majority of the job losses (temporary or permanent) in the hospitality industry were brought on by the widely mandated lockdown orders which hugely targeted sectors deemed nonessential.
According to data, not only were minority employees disproportionally affected by this decision, minority-owned businesses were also hit the hardest by the lockdowns. And the fact that the hospitality industry was hit so hard means it will take a long time to recover. This translates to a slow labor market for groups usually employed in the sector.