High Wage Vs. Low Wage: Comparing Economic Recovery In America

Economic Recession

The Briefing

  • The economic recession caused by COVID-19 has been especially devastating for low wage workers
  • While the recession is nearly over for high income earners, fewer than half the jobs lost this spring are back for those making under $20/hr

High Wage vs Low Wage: Different Economic Recoveries

While it’s not uncommon for low wage workers to bear the brunt of an economic recession, this year’s economic collapse has been exceptionally brutal for America’s lower income employees.

Employment rates for high wage workers have bounced back from their spring slump, but unfortunately, the recovery hasn’t been as pronounced for low income workers.

Less than half the jobs lost earlier this year have returned for those making under $20 per hour. To give you a broader perspective, here’s a look at the percent change of employment rates from February through to November 2020:

(Click on image to enlarge)

As the table above shows, this recession has been tough for low wage workers. But why?

It’s Not You, It’s Your Industry

There are various elements at play, but one key factor driving this unequal recession is the type of work that’s been impacted by the global pandemic.

The sectors that have been most affected, such as accommodation and food services, are the industries that typically employ low wage workers. On the flip side, many high income workers are employed in industries that allow them to work from home.

Although several COVID-19 vaccines are now in sight, a return to “normal” can’t come soon enough for workers in hard-hit industries such as travel, tourism, and food services.

Disclosure: None.

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