This story is part of TRACE (Toward Response and Community Equity), a year-long series that will track how and where the region’s government, philanthropic, civic and private sector is working toward a more just recovery.
Prior to the pandemic, America was working, and unemployment was historically low. This is the oft-cited evidence that jobs will be to the economic recovery what the vaccine will be to country’s physical recovery.
However, many in the city — especially minority women — were working poorly-paid service sector jobs during these pre-pandemic boom times. According to the Economy League, Philadelphia is not only the poorest big city, it has the highest percentage of working poor — 27.2%. The Harvard Business Review describes these low wage service jobs as driven by “the decisions of the highly paid workers about what to consume, where to live, what to spend their money on.”
Even in the best of times these jobs never equated to the American Dream.
If a person works fulltime at the federal minimum wage level of $7.25 per hour, they will make $14,500 — about $2,000 more than the official poverty level. Ironically, many of these same workers are being hailed as essential as we are going through the pandemic — nurse aides, day care teachers, grocery store workers, delivery people.
Poor people go to work everyday but their economic reality is their ends do not meet. Although employed, they don’t make enough to work themselves out of poverty and are bedeviled by burgeoning utility debt, missed rent or mortgage payments, and a flagging financial ability to provide even the basic essentials for their children. According to the Brookings Fellow Marcus Casey, middle class and working class workers have born the brunt of the pandemic — the illness, the economic disruption, the layoffs and the job closings.
Now, some economic experts question if even these jobs will return post pandemic.
As highly skilled workers forgo the office to work from home and technological innovation advances, it is wreaking job havoc for less skilled workers.
“Although the economy will eventually recover, the structure and job composition of that economy may be quite different,” said Casey. “This possibility has important implications for workers who previously worked jobs or industries that have been fatally damaged by the pandemic.”
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Current unemployment numbers seem to support the prediction.
In March 2020 about 160,00 Philadelphians were unemployed. A month later that number almost tripled to over 470,000. Now, the city’s unemployment rate is declining — falling in January to 227,149 — but unemployment has not reached its pre-COVID lows and the recovery has not been equal.
According to Harvard’s Opportunity Insights tracker employment in high-wage sectors has almost completely recovered. It is the low-wage industries, where minorities are over-represented, that remain down 28%from a year ago and may not ever recover to pre-pandemic numbers.
“We think that there is a very real scenario in which a lot of the large employment, low-wage jobs in retail and in food service just go away in the coming years,” said Susan Lund, head of the McKinsey Global Institute.
Working poor is not a new problem. It’s a problem made visible by COVID.
According to MIT’s The Work of the Future report, work as a tool for economic mobility began to sputter in 1980, although for the most-educated, the engine still worked:
“But during the same period, earnings fell steeply among adults without college degrees. Even worse, among men without college degrees working fulltime, real weekly earnings in 2018 were actually 10 to 20 percent below their levels in 1980, nearly four decades earlier.
“This stagnation of earnings hit minority workers particularly hard. Between 1980 and 2015, the gap between black and white workers’ earnings (27 percent in 1980), failed to close by even one percent. Meanwhile, the gap between Hispanic and white earnings expanded, from 29 percent in 1980 to 31 percent in 1990.
“Earnings of women of all races and ethnicities grew closer to that of white men during these years, but the gains were much greater for white women than for either black or Hispanic women.”
Two years ago, Philadelphia Works put out a research report and it noted that “workers in service occupations were most likely to live in poverty while workers employed in management, professional and related occupations were much less likely to be among the working poor. The working-poor rate for these two groups were 15 percent and 4.1 percent, respectively.”
The Philadelphia Works report also explained that:
- More women than men were working poor
- Young workers over older workers were more likely to be working poor
- Blacks and Asians were about twice a likely, and Latinx about three times as likely, as whites to be working poor
- Blacks accounted for 43% of the city’s working poor
- Workers without a high school diploma had the highest working-poor rate, at 17%.
Going forward, it will be critical for policymakers to look past job quantity into job quality.
According to the MIT report,“countries that make well-targeted, forward-looking investments in education and skills training should be able to deliver jobs with favorable earnings and employment security to the vast majority of their workers — and not exclusively to those with elite educations.”
Last month, Philadelphia City Council announced its New Normal Jobs Initiative — a $4 million effort to boost employment programs across the city including a same-day-pay program which put people to work cleaning vacant lots, a jobs training program to provide home health aides with nursing certifications (Note: In full transparency, my employer District 1199C Training & Upgrading Program is the partner for this program) and an employment training effort to revitalize neighborhood commercial corridors.
“The programs being funded by this jobs initiative have a common denominator — they improve Philadelphia and they focus on finding people jobs,” said Council President Darrell L. Clarke.
This month, Council added another $5 million to this jobs effort.-30-
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