Labor Market Misery

October 26, 2020

During October the dismal employment situation observed in September of 2020 has been analyzed from the perspective of the different components of the U.S. population. The repercussions of the crisis have been analyzed with some detail on the previous essays written this month; "Labor Market September 2020", "Labor Dynamics September 2020", "Labor Market Distress September 2020", "Additional Labor Market Inequity", "Other Labor Market Developments 2020", "Native and Foreign Born Labor", "Latinos and the Covid-19 Recession" and "The U.S. Asian Population amidst the Pandemic".

The purpose of this last essay of the month is to examine the consequences of the Coronavirus Recession on the labor market conditions of September of 2020 by summarizing the data and through ranking and contrasting. The Bureau of Labor Statistics collects data for the populations 16 years old or older and 20 years old or older and by dividing them into different segments. Thus there will be one section for each of this and a final one attempting to reconcile the two.

Population 16 years old or older

Graph 1 attempts to recapitulate the September of 2020 distress amongst different segments. A caveat is that the addition of all them is not equivalent to the whole population, since, for example, the segment native-female is contained within the segment native. Thus the two cannot be added. Then, each must be evaluated on its own although they can be compared to the others. The group "Other" corresponds to the residual from the Total of the sum of the Asian, Black and White portions. Thus, it should include the Native Hawaiians, Other Pacific Islanders and theoretically people of mixed race or others that do not fit within the rest of the population.

The top-left panel lists the unemployment rate for 15 different segments of the population ranking them from highest to lowest. The graph confirms the intuition, observed throughout the month, concerning the higher unemployment rate for the groups that have been traditionally unable to fully participate on the economy. Thus, the top three highest unemployment rates are observed for the Black, Foreign-Born Female and Latino populations.

On the top-right panel the impact of the recession is more blatant. The top five groups with the largest increases in the unemployment rate ranging from 165% to 261% are; Latino (165%), Foreign-Born Male (202%), Foreign-Born (231%), Asian (261%) and Foreign-Born Female (261%). From this perspective it seems that the Foreign-Born, which are close to 16% of the U.S. population, are bearing the brunt of the recession. Both, the Latino and Asian populations contain a comparatively larger number of foreign-born individuals. Notwithstanding a decline, between 2018 and 2020, of 1.3 million individuals in the foreign-born population, equivalent to 3% of its total, it shows the largest increases in the unemployment rate. These and other "insights" are molding these difficult times as the "Foreign-Born slump", which in fact may not have started in March of 2020 but much earlier.

The bottom-right panel shows the average annual growth rate in the number of people employed. The relatively higher employment growth, between 2007 and 2020, among the most negatively affected sectors, as shown on the top-right panel, was not enough to avert the current catastrophe for them. It virtually reveals that the types of jobs held by them are, or were, much more "volatile" than those held by the rest of the population leading to the devastation in progress within the foreign-born population.

By looking simultaneously at the bottom panels of Graph 1 the fact that employment is highly correlated with population growth is easily exposed. Indeed, all the population segments above and below the total coincide almost one to one between 2007 and 2019 (blue bars) and between 2007 and 2020 (green bars).

Population 20 years old or older

Graph 2 is analogous to graph for the population 20 years old or older. Again all data corresponds to September of each year

The top-left panel shows a similar situation to the one observed on Graph 1 in the sense that females and other "less mainstream" groups tend to have higher unemployment rates than the rest of the population. The situation is particularly worrisome for the Black and Latino segments of the population, in particular for Black males that currently endure the highest unemployment rate, in addition to other social and economic woes. However, the situation is turning out to be not much better within the Latino inhabitants.

In fact, the top-right panel portrays a dreadful panorama of the situation. The unemployment rate for Latino males increased almost 200% between 2020 and 2019, similar to what happened to Latino females and the group denominated Rest. The group Rest corresponds to the residual from the Total population of the sum of the White and Black segments. Therefore, this group presumably contains Asians, Native Hawaiians, Other Pacific Islanders and theoretically people of mixed race or others that do not fit within the rest of the population.

The bottom-left panel depicts the average annual population growth rates between 2020 and 2007 of each of the groups 20 years old or old, with Rest being at the top of the list with (3.5%). The group Other included in Graph 1 is not analogous to the group Rest since the former includes all the Non-White and Non-Black populations, in particular the set of Asians.

Between 2007 and 2019 employment had been growing at a slower rate than the population, 0.74% and 1.0% respectively. Thus, job growth was somehow keeping up with the population. However, the situation in September of 2020 has changed drastically, showing a decline in the annual average growth of both variables to 0.1% and 0.9% correspondingly and as shown is the foreign born population the most negatively affected by these developments, in particular Asians and Latinos.

Summary

In order to reconcile the two populations, 16 and 20 years old or older, an index quantifying their relative distress, brought about by the Covid-19 recession, has been created. It takes into account two main aspects of labor misery; the absolute level of unemployment as calculated by the unemployment rate and a relative level of suffering as measured by changes in the unemployment rate. It has been denominated the "Labor Market Misery Index" where smaller values represent lesser levels of despair and anxiety. Lower values of the Index convey better conditions in the labor market whereas larger ones suggest ever higher levels of devastation.

Graph 3 easily confirms the intuitions brought throughout each of the previous October discussions and the current one in the two prior sections. From looking at the Graph the first striking point is that there are practically two groups in the population that tend to be closer together. The first one with, relatively lower levels of suffering starts with the group "Other" 16 years old or older and "Non-Latino Male" 20 years or older and ends with the segment "Female" 20 years old or older. The second, and much more distressed group starts with "Black Female" 20 years old or older, with the lowest index value (187), and ends, at the top of the list, with the largest and worst index for the "Foreign Born Female" 16 years old or older with a value of 252.

Only minorities are found in the relatively worse off group, in particular Asians show the second largest value of the Index (237) allowing room to speculate as to whether Asian females are even higher on the scale than "Foreign Born" females, something impossible to verify with the current series as the Bureau of Labor Statistics does not collect the relevant data for the Asian population. Another striking feature of the graph is that within the top and bottom groups the variation in the coefficient of the Index is very different. While the bottom and top of the better off group are separated by 20 points the same calculation in the worse off group climbs to 65 points.

The asymmetry of the U.S. labor market is now even more palpable stressing the need for enhanced protections, at least during times of crises, for these less represented groups that contribute immensely to the economy and gain comparatively less during the good times but loose relatively more during the bad times. The picture that emerges from the facts is not one of harmony, compassion, generosity and security but one of discord, selfishness, greed and upheaval. It is time for a change.