In order to slow the spread of the coronavirus pandemic, businesses have had to shut their doors, causing industries such as the restaurant industry, airline industry, and hospitality industry to furlough or fire millions of workers. In the US, nearly 10 million filed for unemployment during the last two weeks of March, with experts estimating that the unemployment rate is at about 13%. Some economists say that the coronavirus pandemic could result in over 47 million Americans losing their jobs and send the unemployment rate over 32%.
According to a new study, done by the Institute for Fiscal Studies, young workers, low earners, and women will be hit the hardest during the coronavirus pandemic. While the study took a look at the situation in the UK, the results are likely to be similar to those in the US.
Low-wage earners were likely to work in an industry that is shut down
The report estimates that before the virus began to affect the country, around 15% of those employed in the UK worked in a sector that has largely or entirely shut down during the COVID-19 lockdown.
Low earners have been hit the work, according to the report. Those who are considered low earners are seven times as likely as high earners to work in an industry that is shut down. According to the report, about 33%of employees in the bottom tenth of the earnings distribution work in shut down sectors, compared to only 5% of those in the top 10% of the earnings distribution.
Young workers are likely to be out of work
According to the analysis, workers 25-years-old and younger are two and a half times as likely to work in a sector that was forced to suspend operations. Companies forced to close under social distancing measures employed 30% of all employees under 25, 25% of young men and 36% of young women.
Of workers who are 25-years-old or older, only 13% of their companies saw closures. These numbers do not include workers who are in full-time education. For example, students who work part-time in restaurants or bars.
One factor that is reassuring is that a majority of younger workers affected live with their parents or other whose earnings are less likely to be affected.
“There is a remarkable concentration of younger and lower-paid workers in the sectors most affected by the current lockdown,” said Xiaowei Xu, a senior Institute for Fiscal Studies research economist and coauthor of this analysis. “Fortunately, in the short run, many will have the cushion of the incomes of parents or other household members. But for the longer term there must be serious worries about the effect of this crisis on the young especially and on inequality more generally.”
Women were more likely than men to work in an industry affected by coronavirus
Women are also at risk during these uncertain financial times as they are one-third more likely to work in a sector that has been shut down. For example, women make up a bulk of retail and hospitality workers, so they are more likely to be affected by closures due to the coronavirus.
According to the report, one in six female workers worked for a business affected by the lockdown, compared to one in seven of their male counterparts.