2020 was on record to deliver one of the strongest economics on record until the coronavirus pandemic hit.
Prior to the pandemic, the U.S. economy was booming, U.S. consumer confidence was at an 18-year high, and Americans in every demographic were celebrating financial success — from pay raises to lower taxes to higher rates of business ownership. In February, there were over a million more job openings than job seekers. Last year, the poverty rate fell to the lowest recorded level of 10.5%. Median household income reached an all-time high of $68,703 in 2019. Over the last year, average wages for workers in the private sector have increased 3.0%. Pro-growth policies that raise labor demand and incentivize employers to invest more in their employees resulted in income and wage gains for historically disadvantaged Americans.
However, mandated lockdowns, shelter-in-place orders, and business closures in March and April brought our economy to a near halt and shed over 22 million jobs. The national unemployment rate skyrocketed to 14.7% in April.
Because the pre-pandemic economy was so robust and as lockdowns and restrictions have been lifted over the summer, the economy has regained about half of the lost jobs and the unemployment rate has fallen back to 6.9% in October. This is perhaps the fastest jobs recovery. In just five months, we have regained more jobs than were regained in nearly five years following the 2008 financial crisis. In the third quarter of 2020, the economy grew at an unprecedented annual rate of 33.1%.
The American economy is resilient and we will rebound from COVID-19 to return to pre-pandemic prosperity.
That is unless policymakers change course and reverse the pro-growth policies which invigorated our economy: the Tax Cuts and Jobs Act, decreasing regulations, and other financial incentives.
Here is how various demographics of Americans have been economically impacted by the coronavirus:
The unemployment rate for black Americans reached a near historic low of 5.9% in February 2020. Real median income grew by 7.9 percent for blacks in 2019, outpacing growth for the past decade. The poverty rate for blacks fell to an all-time record low and dipped below 20 percent for the first time. The employment gap between black and white workers had been narrowing and the unemployment gap between blacks and the general population had fallen.
Additionally, there are 2.4 million small businesses owned by black women, making these women the only racial minority with more business ownership than their male peers.
The pandemic forced the black unemployment rate back up to a high of 16.8% in May, a level not seen since March 2010 during the Great Recession. Black households have been hard hit by the coronavirus as workers are clustered in occupations hard hit by the pandemic such as leisure, retail, hospitality, and transportation.
However, their unemployment rate is steadily falling, reaching 10.8% in October. Undoubtedly, we have more to do to regain these employment and income losses due to the pandemic, but as consumers resume spending, dining out, and other activities, this demand will drive job growth.
Small business owners have been particularly affected by the pandemic-induced lockdowns and the recent social justice protests across the country. For some, the higher costs for Personal Protective Equipment for their employees is an additional cost that they struggle to meet so that they can reopen while keeping themselves and their employees safe.
For a while, coronavirus stimulus packages, which included programs like the Paycheck Protection Program, supported many of these small businesses. But as lawmakers in Washington have not negotiated new stimulus packages, many of these small businesses continue to struggle to stay afloat. Despite these challenges, small businesses optimism has rebounded and in September reached a new high as owners anticipate the economy recovering from the pandemic.
As of October, the female unemployment rate is 6.5% down from pandemic high of about 16%, but still above the 3.5% rate before the pandemic. This is even lower than the male unemployment rate. In 2019, median household incomes for single mothers and single women rose while their poverty rates fell to new lows. Women drove the increase in full-time year-round workers in 2019 as their labor force participation rate increased.
Before the pandemic, there were nearly 13 million women-owned businesses. That’s a 21% increase since 2014 when there were about 9.1 million* women-owned firms. Women started an average 1,817 new businesses per day in the U.S. between 2018 and 2019, greater than the daily average created before, during and after the recession through the end of the Obama Administration. And women franchise owners now make up 42% of the market, up from 20% just five years ago.
Unfortunately, the pandemic has likely affected these numbers. Between the difficulties of juggling children at home with schools and childcare centers closed and the forced closure of many businesses due to the pandemic shutdowns, women-owned businesses have likely suffered.
As of February 2020, the unemployment level was 3.5%, its lowest rate since 1969. Real median household income reached an all-time record high of $68,700 in 2019 with the largest one-year increase in median income on record of 6.8%. The poverty rate fell 1.3 percentage points to 10.5% as more Americans experienced economic mobility and moved into the middle class.
Today, the unemployment rate has fallen to 7.9 percent after jumping to 14.7 percent in April 2020 amid the coronavirus pandemic, and in September, 661,000 jobs were added to the U.S. economy. The latest jobs report indicates that the U.S. economy is in recovery mode as millions of Americans get back to work.
As of October, the female unemployment rate is 6.5% down from pandemic high of about 16%, but still above the 3.5% rate before the pandemic
Prior to the pandemic, the Hispanic/Latino unemployment rate reached the lowest on record. Under President Obama, Hispanic unemployment averaged 1.9% higher than the general population. But under President Trump, the unemployment gap has narrowed to about 0.5% for Hispanics. In addition, in 2019 Hispanic poverty rates reached a record low and their median incomes hit new highs.
While the pandemic drove their unemployment rate to 18.9% in April, it has since fallen back down to 8.8% in October.
There are nearly 11 million minority-owned businesses across the United States, but firms owned by women of color grew at nearly three times the rate (163%) of women-owned businesses and account for half of women-owned businesses. Hispanic business owners are the fast-growing small business owners in the nation.
Blue Collar Workers
Prior to the pandemic, over half a million manufacturing jobs had been created since 2016. Nearly half a million of these jobs were added from January 2017 until June 2019, a 4 percent increase. On top of that, wages were growing at their fastest pace in a decade with worker wage gains outpacing wage gains of managers and supervisors.
Unfortunately, the manufacturing industry lost 1.4 million jobs in March and April at the start of the pandemic. Since April, however, 716,000 manufacturing jobs have been recovered, more than half of the losses. In September alone, 66,0000 new manufacturing jobs were added to the economy.
The youth unemployment rate is 13.5%, up from 8.0% earlier this year before the pandemic. This is an improvement from July, when the youth unemployment rate was 18.5%. Unfortunately, this is still about twice as high as a year earlier as youth employment has been affected by the coronavirus pandemic, as has overall American employment.