Research | Spring 2021 Issue

COVID’s Losses: Lives, Jobs, Hope

The unequal toll of a devastating year and the challenge ahead

By Jon Regardie

COVID-19’S IMPACT ON PEOPLE OF COLOR in Los Angeles County has been harrowing. On March 3, 2021, a year into the pandemic, the death rate for Black people was 175 per 100,000 individuals, com- pared to 111 for White residents. The figure was even starker for Latina/os: 316 per 100,000 inhabitants, with 10,753 Latina/o people dead, according to the County Department of Public Health.

As unnerving as the disproportionate health impact has been, it may be exceeded by COVID-19’s economic battering of Los Angeles’ communities of color. A staggering array of job losses and the corresponding ripple effect stand to exacerbate long-standing inequities. This raises the likelihood that, even as vaccines slow the spread and lethality of the virus, historically struggling communities will take far longer to recover than wealthier enclaves.

The picture that emerges from academic and government reports, along with interviews of service providers, elected leaders and others, is of physical and economic devastation. And though the arrival of vaccines has begun to turn the crisis, its effects will stretch into the future, with especially lasting implications for the region’s Black and Latina/o communities.

“It is practically impossible for anybody who is breathing to ignore the economic hardships this [pandemic] has imposed, sector after sector,” said Los Angeles 10th District City Councilman Mark Ridley-Thomas, who has represented many communities of color during his 30 years in local elected politics. “It has racial as well as gender implications that are quite consequential in an adverse way.”

The reason for concern is laid out in a 46-page report released in December by the UCLA California Policy Lab. A quartet of authors dove into unemployment insurance data accumulated since the onset of the pandemic. Their research reveals that 85% of Black people in the state labor force have filed for unemployement insurance (UI) or Pandemic Unemployment Assistance (PUA, available to freelancers, independent contractors and others who may not quality for traditional benefits) at some point during the crisis, almost double the overall statewide level of 45%. The median weekly benefits received by Black and Latina/o people (in a two-week sample period in November) was, respectively, about $327 and $333. This compares to a median benefit for White recipients of $409. Men recorded a median benefit of $446, compared to $302 for women.

The suddenness of the coronavirus-fueled economic crisis put a twist on the common downturn. Till von Wachter, faculty director of the California Policy Lab and an author of the study, pointed out that in a traditional recession, many low-wage service jobs are safe havens, as even in a tanking economy people still eat at restaurants, shop and get haircuts. However, COVID-19 arrived with gale force, as on March 19, 2020, Mayor Eric Garcetti and Gov. Gavin Newsom both issued stay-at-home orders, shutting down business for restaurants, bars, theaters and other establishments. And while some white-collar work transitioned to Zoom, less-skilled positions disappeared altogether.

“Those vulnerable workers were being much more strongly affected than usual,” said von Wachter, who is also a professor of economics at UCLA. “So all the problems and inequalities that were pre-existing, in their access to wealth, to other sources of income, their inability to get on UI, all those were being strongly exacerbated.”

Inequality persists

The UI and PUA payments were a lifeline for millions across the country, and the weekly $600 supplemental benefit provided by the federal government through July helped families pay rent, buy groceries and cover bills. However, the California Policy Lab report shows that even as this money rolled, there was an underlying thread of inequality.

The analysis of UI data reveals that relatively wealthier neighborhoods saw a greater percent- age of eligible claimants sign up for benefits than occurred in communities with higher poverty levels and more people of color. The report concluded that if all neighborhoods saw people file for benefits at the rate of the wealthiest areas, then an additional $445 million a week would have flowed to needy Californians at the height of the crisis.

The researchers zeroed in on East Los Angeles, determining that if residents there filed at the rate of claimants in more affluent communities, as much as $7 million more each week could have been injected into the neighborhood. One theory is that participation levels are lower in predominantly Latina/o communities due to households with undocumented workers (who are not eligible for benefits) or people who don’t sign up because they mistrust government.

Whatever the reason, the economic impact extends beyond the household. If an eligible individual does not access unemployment benefits, then the “multiplier effect” of the funds being spent at area businesses — and perhaps keeping those entities alive — is never felt, further magnifying the downturn.

“We are already talking about individuals that were often struggling before the crisis, so them missing out on UI payment puts a strain on the community,” said von Wachter. “If individuals don’t have the funds to spend, or spend less, that will be hurting everybody’s purse, so to speak.”

A constricted UI stream is far from the only problem. A 10-page January report by the non- partisan state Legislative Analyst’s Office found that Californians whose incomes were impacted by the coronavirus owe a cumulative $400 million in unpaid rent, and while eviction moratoriums have kept many people in their apartments for the time being, an estimated 90,000 households are behind in paying the landlord. The Los Angeles Housing and Community Investment Department in early March estimated that low-income renters in the city who have missed payments owe an average of $4,200 to $7,000. Although city leaders are directing hundreds of millions of dollars to local rent-relief programs, eventually aid will run out and protections will expire. Ridley-Thomas pointed to the long-term harm that can spin from an eviction.

“It ruins your credit. It is hard to get a leg up under those circumstances,” he said. “We need more creative, imaginative intervention strategies that help people from being subject to practically a criminal sentence because they were evicted.”

Then there is perhaps the most daunting challenge: What happens to people who lost jobs, particularly low-wage earners in fields devastated by COVID-19?

That is the focus of another report, this one commissioned by the L.A. County Workforce Development, Aging and Community Services Department. Caroline Torosis, the department’s director of Economic and Business Development, said the February analysis, titled “Pathways to Economic Resiliency,” identified where jobs have been lost and seeks to help the county determine strategies of recovery — with the idea of addressing inequality.

“We’ve seen the pandemic has really blown wide open the racial wealth gap and has high- lighted the inequities we have specific to L.A. County,” said Torosis. “We’ve had a significant job loss, and it’s really affected our communities of color and women.”

The 50-page report (with a 300-page appendix) was conducted by the Los Angeles Economic Development Corp. It paints a nightmarish portrait of the economic crisis, and of the long road to recovery.

One finding notes that 20,000 county residents became homeless between last February and November. That was on top of the 66,000 people already experiencing homelessness in the county.

The report also states that 1 million county living-wage jobs (defined as paying $14.83 an hour for a single adult with no children) disappeared at the height of the crisis. Though some positions have returned, the authors found that the county will not reach the pre-pandemic level of 4.16 mil- lion living-wage jobs until 2024.

Similar to the California Policy Lab report, “Pathways to Economic Resiliency” reveals that the people hit hardest are those who can least afford a diminished paycheck: tens of thousands of low-wage restaurant workers, retail sales clerks and more. It’s a situation where frustration is exacerbated by ineptitude that dealt communities of color a further blow; Stephen Cheung, chief operating officer of the LAEDC, noted that in the first round of Paycheck Protection Program grants, it took an average of 62 days for Black-owned businesses to receive approval from participating banks, and 57 days for Latina/o-owned businesses. Meanwhile, funds for White-owned businesses flowed in an average of 43 days.

Maps provided with the report show that areas with the most job losses are in lower-income communities.

Poverty compounded by job losses

“Already there is poverty in those areas, and now you add unemployment. That’s why we’re so concerned,” Cheung said. “The statistics showed us that the most vulnerable of our populations are worse off.”

As communities struggle, von Wachter, Toro- sis and Cheung all mention one often-overlooked discrepancy that may further harm impoverished neighborhoods: lack of affordable or reliable broadband service. The connectivity many people take for granted impacts everything from kids wrestling with distance learning to registering online for a coronavirus vaccine.

“Due to COVID-19, a lot of folks are basically asked to work remotely, and if you don’t have reliable and affordable Internet access, you’re basically being asked to be displaced out of a job,” Cheung said.

The challenges facing lower-income communities are no secret; there has been ample discussion of a “K-shaped” recovery, the term that refers to the number of Americans whose wealth has risen at the same time that others struggle mightily.

Yet some worry that the full scope of the economic divide is still not being grasped. UCLA’s von Wachter questions what occurs when people exhaust unemployment benefits or the PUA pro- gram ends, particularly if it takes years to return to pre-pandemic employment levels.

“What will happen to these communities as we move into the recovery” he asked. “Will we be able to get them back into the workforce? And how will they be affected by changes that will be occurring in these lower-wage sectors?”

Torosis said the county is looking not just at getting people who lost jobs back into the labor pool but at how to move them into stable, well-paying positions. “Pathways to Economic Resiliency” identifies sectors primed for growth such as healthcare — “there is always a shortage of registered nurses,” Torosis said — and construction, particularly for major infrastructure projects. Ridley-Thomas points to opportunities for historically underrepresented communities in the biosciences field.

Still, moving displaced workers into next-level jobs requires a functioning pipeline and protocols that match employers with eligible candidates. Some systems exist, including training programs at community colleges, but everyone involved recognizes the need for improvements.

“We have a system, but we need to really match our dislocated workers with, depending on their skill set, the growth opportunities,” Torosis said.

Therein lies the challenge that will face the region, long after the pandemic ends.

Jon Regardie

Jon Regardie

Jon Regardie spent 15 years as editor of the Los Angeles Downtown News. He is now a freelance writer contributing to Los Angeles Magazine and other publications.

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