Monitoring the Recovery of Vulnerable Workers and Their Families

October 14, 2021

In the Institute for Economic Equity’s Labor Day 2021 message, we pledged to monitor the economic well-being of workers at all levels, but especially those who face the greatest hurdles. This commitment is critically important because of the COVID-19 pandemic and the ensuing recession, Congress’s unprecedented pandemic relief and recovery investments, and widespread attention on narrowing economic gaps within society. All contribute to demands for a shared recovery and an end to persistent disadvantages that women, people of color, and others face.

This blog post provides the framework for one of the ways in which the Institute will monitor the nation’s promises for greater equity.

Definitions and Target Populations for Analysis

We define “vulnerability” as being more sensitive to economic downturns and shocks such as the COVID-19 pandemic. Part of this vulnerability stems from historical challenges that make it harder to be resilient to shocks.

We use the employment-to-population ratio as our key metric. It captures the dramatic drop in employment opportunities that occurred during the pandemic.

The following groups fit our definition of being economically vulnerable and are our primary focus:

  • Teenagers (ages 16-19)
  • All adults with no more than a high school diploma (age 25 and older)
  • Black men
  • Black women
  • Women, all races
  • Latinos (both men and women)
  • People with a disability (age 16 and older)

Of course, other groups and communities face systemic and structural hurdles. They include out-of-school youths, American Indians and Alaska Natives,The Bureau of Labor Statistics reports that in 2019, the American Indian and Alaska Native jobless rate was twice the national unemployment rate. The share of women employed during the same period was 53.5%, well below the economywide percentage of 60.8%. and residents throughout the Eighth Federal Reserve District,Headquartered in St. Louis, the Eighth District includes the entire state of Arkansas, as well as parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee. particularly those in the Mississippi Delta. We define the Mississippi Delta region in the Eighth District as the 38 counties across Mississippi and Arkansas on each side of the Mississippi River. See Reaching Out to Delta Communities for details. The following unemployment data are from the Bureau of Labor Statistics and was downloaded using Policy Map. Before the pandemic began, the unemployment rate in the Mississippi Delta was at 6.6% (February 2020). By April 2020, this had jumped to 12.5%. The recovery is trending in the right direction, but in July 2021 the unemployment rate was still at 7.6%—higher than before the pandemic and the national jobless rate. When monthly data are available for these groups, we will document their recovery. Since the analysis is based on monthly releases, our conclusions will change from month to month.

Finally, for purposes of addressing the economic challenges that vulnerable groups experience, we define “responsive equity” as providing individuals and communities with enough resources to address current inequalities, and “structural equity” as providing resources to address not only current inequalities but also those remaining of the past.

Persistent Differences in Employment-to-Population Ratios

Whether in good times or tough times, the employment-to-population ratios of women, Black men, teenagers, and adults with only a high school diploma are lower than the economywide employment-to-population ratio (all workers age 16 and older). These groups started the recovery with a weaker attachment to the labor force, as shown in the figure below.

Monitoring Jobs Chart EP Ratio

NOTE: High school graduates are adults whose highest level of educational attainment is a high school diploma.
SOURCES: Bureau of Labor Statistics and authors’ calculations.

Over the same period, the unemployment rates of women, Black men, Latinos and teenagers were higher than the overall jobless rate. These groups began the recovery with higher jobless rates, so starting at a disadvantage made it more difficult for them to withstand the pandemic’s health and economic impacts.

The Experience of Vulnerable Groups during the Current Recovery

The overall employment-to-population ratio has recovered faster during the current jobs recovery than during the four previous recoveries. (See the second figure.)

Monitoring Jobs Chart Overall

NOTE: Month 1 of the jobs recovery is the first month of the economic expansion as defined by the National Bureau of Economic Research.
SOURCES: Bureau of Labor Statistics and authors’ calculations.

The next figure shows the employment-to-population ratio for each vulnerable group. The ratio for those with only a high school diploma, women, and Black men track the overall pattern of recovery. In contrast, the employment-to-population ratios of Latinos and teenagers have recovered faster than the overall ratio, while the ratio for people with a disability rebounded slower.

Monitoring Jobs Chart Current

NOTES: High school graduates are adults whose highest level of educational attainment is a high school diploma. Month 1 of the jobs recovery is the first month of the economic expansion as defined by the National Bureau of Economic Research.
SOURCES: Bureau of Labor Statistics and authors’ calculations.

The next figure reports the unemployment rates of each vulnerable group. Compared with the overall unemployment rate, the jobless rate of Black men has been the slowest to fall. The unemployment rates for adults with only a high school degree, women and Latinos closely track the overall unemployment rate. The unemployment rate of teenagers has fallen much faster than the overall unemployment rate.

Cumulative Change in Unemployment Rates since April 2020

NOTES: In the legend, the number on the far right represents the unemployment rate in April 2020. The value on the y-axis is the cumulative change in percentage points.

Reasons for the Recovery Patterns

There are a couple of important differences between this recovery and those that came before. First, the CARES, the Consolidated Appropriations and the American Rescue Plan acts injected unprecedented amounts of relief and recovery funds into the economy. This fiscal aid helped many households to stay afloat while members were out of work, as broad swaths of the economy closed. Fiscal stimulus was much smaller during the previous four recoveries.

Second, unlike the typical recession, in which households and businesses must fix their balance sheets, production and demand quickly returned after initial public health lockdown procedures were removed.See, for example, the website Opportunities Insights for detailed analysis of the pandemic’s economic impact.

Vulnerable groups benefited from both factors. For example, the largest number of jobs recovered since April 2020 has been in the leisure and hospitality industry. Women represent just over half of the employees in this industry. Almost 1 in 5 Black Americans work in leisure and hospitality, and young people are also concentrated in this industry. Additionally, fiscal aid has buttressed vulnerable groups and their communities relatively more than nonvulnerable groups.

Unfinished Business: Closing Pre-Pandemic Employment Gaps

The economy is 18 months into its recovery. That several of the vulnerable groups are experiencing a jobs recovery at the same pace as the overall economy is reassuring, but the current trends show little, if any, narrowing of pre-pandemic racial and gender gaps and differences by education and disability status.

Many of the relief and recovery responses provide responsive equity. They focus on the differences that emerged during the pandemic rather than those that existed prior to the pandemic. This partly explains why several of the vulnerable groups described above are only recovering at the same pace as the general labor market. The supportive unemployment insurance benefits and expansion of the child tax credit have proven helpful during the recovery, but they have addressed only new sources of financial insecurity.

A structural equity approach would not only narrow gaps that emerged during the pandemic but also make progress in addressing historical disadvantages that have accumulated over time. If this were pursued, the recovery for these groups would become faster than the overall economy.

Utilizing equity-based policies, particularly if they are structural in allocating resources, will be more effective and impactful. If pursued, they represent a win-win for the nation: greater productivity growth, less inequality, stronger economic growth and greater financial security.

Stay tuned for our periodic updates on equity in the U.S. labor market.

Reference and Notes

1 The Bureau of Labor Statistics reports that in 2019, the American Indian and Alaska Native jobless rate was twice the national unemployment rate. The share of women employed during the same period was 53.5%, well below the economywide percentage of 60.8%.

2 Headquartered in St. Louis, the Eighth District includes the entire state of Arkansas, as well as parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.

3 We define the Mississippi Delta region in the Eighth District as the 38 counties across Mississippi and Arkansas on each side of the Mississippi River. See Reaching Out to Delta Communities for details. The following unemployment data are from the Bureau of Labor Statistics and was downloaded using Policy Map. Before the pandemic began, the unemployment rate in the Mississippi Delta was at 6.6% (February 2020). By April 2020, this had jumped to 12.5%. The recovery is trending in the right direction, but in July 2021 the unemployment rate was still at 7.6%—higher than before the pandemic and the national jobless rate.

4 See, for example, the website Opportunities Insights for detailed analysis of the pandemic’s economic impact.

About the Authors
William M. Rodgers III
William M. Rodgers III

William M. Rodgers III is vice president and director of the St. Louis Fed's Institute for Economic Equity. Read more about the author and his work.

William M. Rodgers III
William M. Rodgers III

William M. Rodgers III is vice president and director of the St. Louis Fed's Institute for Economic Equity. Read more about the author and his work.

Lowell Ricketts
Lowell Ricketts

Lowell R. Ricketts is the data scientist for the Institute for Economic Equity at the Federal Reserve Bank of St. Louis. His research has covered topics including the racial wealth divide, growth in consumer debt, and the uneven financial returns on college educations. Read more about the author and his research.

Lowell Ricketts
Lowell Ricketts

Lowell R. Ricketts is the data scientist for the Institute for Economic Equity at the Federal Reserve Bank of St. Louis. His research has covered topics including the racial wealth divide, growth in consumer debt, and the uneven financial returns on college educations. Read more about the author and his research.

This blog offers relevant commentary, analysis, research and data from our economists and other St. Louis Fed experts. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System.


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