Skip to main content

The Number

003: Unemployment



- [Karen] This podcast is sponsored by the Tecovas Foundation. From Panhandle PBS, I'm Karen Welch. And this is "The Number," a podcast where we add context to statistics that help define our local community. Today's number is 8.8. 8.8% of the workforce living in the Amarillo metro area filed unemployment claims in April, when cases of COVID-19 surged across our region.

- [Trent] That's for the metropolitan statistical area, which is a five county region for Potter County, Randall, Carson, Oldham, and Armstrong. So, 8.8% for the Amarillo MSA for the month of April. That's a very significant number. It represents about 10,400 individuals in that count.

- [Karen] Trent Morris is director of Workforce Solutions Panhandle, which connects job seekers with employers. How much of that, do you know, is related to the pandemic?

- [Trent] Well, obviously probably 50, 60% at least, but we can't forget the oil and gas industry and the impact that it has up here in the Texas panhandle. And so, as we look at the claim activity that the Texas Workforce Commission produces data on, it tells us that restaurants were the hardest hit, obviously. And I think most people could predict that. But right behind the restaurants is the support activities for oil and gas operations. And then some of your medical, general medical, dentists, hospitals are third in line in terms of the impact on the industry. So, I think a large portion of that is certainly COVID related, but the oil and gas downturn is something that we've got to pay real close attention to here in the panhandle as well.

- [Karen] When I touched base with Morris again in June, not much had changed. The Amarillo metro unemployment rate still sat well above 8% in May. Compare that with a rate of about 2% last year. Where are the worrisome spots beyond Amarillo?

- [Trent] Well, I would definitely say that we're looking at Pampa and Gray County. We had a large manufacturing plant decide to shut its doors. And we've got a lot of individuals there that have good paying jobs that those are lost, and we don't anticipate them coming back. And then in Borger, Hutchinson County, those two areas really have caught my attention, because proportionately to the rest of the counties in the panhandle, their unemployment rates are significantly higher, with Gray County coming out at 10.3% unemployment rate for April. In Hutchison County, 10.7%. And we have to anticipate that a lot of that was oil and gas related, possibly manufacturing as well, and including the restaurants and the medical, healthcare related layoffs. But those are two areas that I think really need a lot of our attention here in the workforce development business.

- [Karen] What first goes through your mind when you're seeing that 10% of a workforce is out of work?

- [Trent] Well, the first thing that goes through my mind is in 30 years of this business, I've not seen anything like this. We want to quickly see that rate be reduced because of people being called back to restaurants and jobs that may not be quite the pay scale of your oil and gas related jobs. So we want to see that number go down fairly quickly. We don't have any data between monthly unemployment reports on a county by county basis, but we do anticipate those numbers will go down.

- [Karen] And they have. Amarillo's unemployment rate for June fell to 6%, while Gray and Hutchinson counties had rates hovering around 11% in April and May. Both counties saw a slight improvement in June. Larry Schmidt is Sloan professor of finance at MIT. Schmidt co-authored research published in June about COVID-19's effect on the labor market. Thanks for taking the time. I appreciate it very much.

- [Larry] Of course. My research falls somewhere at the intersection of macroeconomics, finance, and labor economics.

- [Karen] You have a squeaky chair.

- [Larry] I have a squeaky chair. Let me try not to move in It. I have a squeaky child upstairs too, so there's, you know, a non-trivial probability of us being interrupted by a small amount of cuteness. But hopefully won't be too bad.

- [Karen] That's okay. What is your main areas of focus?

- [Larry] In finance, you end up kind of drifting towards studying wealthier households, just because there are assets that are only owned by pretty wealthy individuals. But human capital is not an asset like that. Everyone has it, and everyone is exposed to substantial risk to their human capital. And so a lot of what I try to do is understand sources of risk and kind of how workers cope with those risks.

- [Karen] You must have had a lot to look at during the COVID-19 pandemic.

- [Larry] That's certainly the case. It's definitely not a shock that's going to hit all workers equally.

- [Karen] Who is it hitting most?

- [Larry] I guess what we wanted to do was try to characterize the exposure to kind of the direct effects of the pandemic. There are a number of interesting indirect effects that are being triggered as well, because this is looking like it's going to be a very severe recession. But there are some very substantial direct effects, which we would sometimes call a supply shock in economics. If you think about it, there are a number of businesses which basically are not allowed to produce their product, because perhaps the workers are not allowed to get close enough or access the facilities they would need in order to produce the product. Or they may not be able to sell or distribute the product. So even if you can make it, maybe you need to use sort of retail distribution methods that are not available to you or are substantially impaired. And so we wanted to try to characterize these supply side exposures. And our main way of thinking about this is that there are certain types of jobs in certain industries where it's fairly easy for workers to transition from, say, in person or in office work to working remotely. And so what we did was we leveraged a recent survey that was run for about 10,000 households, where they asked them about their previous experiences prior to the pandemic with working from home. And you can see that there's a lot of heterogeneity in the sense that there are certain types of jobs, especially jobs where you're kind of sitting in front of a computer all day. It turns out you can sit in front of a computer almost anywhere. So those jobs have been fairly not disrupted by the pandemic. And then there are other types of jobs such as arts, entertainment, recreation, restaurants, cruise ships, those types of positions, where there's basically no ability to do that job from home. And what you see is basically that those workers are particularly hard hit. And even kind of within those sectors, you see that it's the lowest income workers that are facing the most pressure in the sense that they're much more likely to have lost their jobs during April, which is kind of what we focus on in the paper, because we have the most complete data available there. This pandemic has been far from hitting all sectors equally and hitting all workers equally. So, you can basically predict very easily which types of firms, which sectors were more likely to be cutting their employment. We can look at data on publicly traded firms. So you can see the stock price reactions, and even forecasts of equity analysts, projections of revenues for these companies going forward. And you see that it's these sectors for which workers cannot work from home that are far more disrupted. So, for example, if you sort companies that are in what we classify as non-critical industries, so, industries that were not permitted to stay open, business as usual, like grocery stores, for example, those would be excluded from this. If you compare companies that are in the top quartile of exposure, so that's gonna include airlines, restaurants, cruise ships, folks like that, with the bottom quartile, which is gonna include, say, software companies, research and development, a lot of very easily work from home-able type jobs.

- [Karen] Yes.

- [Larry] You see that there's almost a 20 to 25 percentage point spread that's emerged in the changes in the evaluation of those companies. So there's actually a lot of sectors. The two I mentioned, information technology, research and development, those types of sectors have experienced almost no employment losses in the month of April. In contrast, if you look at sectors like arts, entertainment, recreation, accommodation, and food services, so restaurants, hotels, those sectors are down almost 50%. Or they were down in the month of April by about 50%. There has been a small recovery, but still, you see that those sectors are absolutely gasping for air right now.

- [Karen] In the Amarillo metro, leisure and hospitality employed more than 13,000 people at the end of 2019. In June, the sector accounted for more than 9,000 jobs, up from around 7,000 in April, during the local coronavirus spike. Tonya Price is in the hard hit restaurant industry. She owns Pescaraz Italian Restaurant in Amarillo.

- [Tonya] Obviously we had to make some extreme changes. We were following the CDC guidelines, listening to the mayor, and respecting everything that she was requesting of us. I attended a meeting that they had with the mayor and the Texas Restaurant Association, and a lot of other restaurant business owners and managers where we all just came together, because we were all so confused and had no idea what we were doing, what the process was gonna be, what their expectations of us was going to be. And so when we had that meeting, they gave us some feedback, suggestions of what they thought we should do. So, one of those were to take some tables out of our restaurant, start practicing social distancing, hand washing, sanitizing at that point. So, we all left that day in hopes of, we can just make these changes. This'll just be temporary. It's how we were all basically thinking. So we go and we make these changes. That was on Tuesday. Well, then by that Friday, we had found out we were gonna have to go down to only being able to do to-goes and curbside service, that we weren't gonna be able to do dining room anymore.

- [Karen] And how is that pivot to make?

- [Tonya] In the beginning, it was very emotionally exhausting, not just for myself and my family, but for my business and my employees, because it was such an extreme change. We had always done to-goes. And so we knew that that was something that we could do, because we had always done it. But just to go in and have an empty restaurant and solely go to to-goes, it was a process and it was a learning curve. And we had to figure out how to maintain the social distancing, to be able to have the phone system, to be able to have the employees to take the orders and then process the orders and get the orders out, just to be able to stay in those guidelines that we were being asked to follow. We had no idea of how long it would be. Was it gonna be one week, two weeks? And then it kind of turned into week after week after week after week.

- [Karen] How many employees did you have?

- [Tonya] I had 25 to 28 that I always keep on staff. And when all of this started, obviously I have a lot of high school kids. And it was their, and I respected that completely, the choice of their parents for them not to be working in the public because they felt that was the best situation for them. I did have some of my kitchen that, because I was gonna have to decrease hours and not being able to employ everybody at the same amount of hours that they had had in the past, I did lose a lot of employees. Some kitchen that went to construction and doing some other things. I had some servers that just, they didn't feel comfortable, and so they opted to go ahead and stay home during this time that we were doing it. I had probably about eight to 10 that stuck with me and through the whole entire thing. I started last Tuesday. So Tuesday, Wednesday, and Thursday, we did 25%, which was actually a great training, regrouping process for us. On Tuesday, I brought everybody that was coming back back and we did a huge spread of breakfast for them. Come in, went over guidelines and regulations and the expectations from the CDC and the city and went over all of that, about all the changes and things, how we have to do things. I even brought somebody in to pray over the business and my employees and my family and other businesses in the community.

- [Karen] Our conversation took place before Texas Governor Greg Abbott reversed course on reopening restaurants due to COVID-19 surges. Eateries that had fully opened have again been limited to 50% capacity. Does it make business sense?

- [Tonya] I didn't think it would, but honestly, the community has honestly stepped up. And so it is making business sense now, just because on Friday when we went to 50% and Saturday and Sunday. Tuesday was a little slow to start, but now that we are at 50%, it is a good business decision on my end because I have such a huge restaurant where that I can spread people out and I can follow those guidelines with social distancing. Tables being apart, separating large parties, and things like that. So I'm blessed in that aspect, but I do know that on some other businesses that are smaller and a little bit more tight with their tables being so close together, that it's not profitable for them because they don't have the ability to do what we were able to do. So I'm slowly getting to bring everybody back. Well, the ones that didn't leave and go to other jobs. Unemployment is throwing a kink in that for everybody, because there are a lot of people that are getting unemployment and some are gonna choose to stay on that. Some are ready to get back out and get back in the workforce. Some just aren't secure enough with numbers in Amarillo being a hot spot to come back out.

- [Karen] Congress had not passed legislation extending unemployment insurance stimulus by the time this episode was completed. Without extension, it was to expire at the end of July. Trent Morris of Workforce Solutions explained the funds added to weekly unemployment insurance checks.

- [Trent] The federal government has kicked in an additional $600 per week on top of the state unemployment insurance amounts. And that's certainly beneficial. The thing that we want to watch and see is we want to make sure that as jobs open back up, that that doesn't become a deterrent for somebody to return to work. And that's where our focus is going to be. Those $600 a week benefits are set to expire the end of July or July 25th, I believe. And of course there's legislation out there that suggests they may look at extending that. But I think the main focus right now is that that money is certainly beneficial, but we want to make sure it doesn't take the motivation away from going back to work when your employer needs you.

- [Karen] Schmidt called unemployment insurance a targeted economic policy.

- [Larry] You only receive them if something bad has happened to you. And generally we would think that those are households that are going to be facing liquidity constraints. They may not be easily able to make their rent payments, their mortgages. I agreed that the $600 a week addition effectively meant that for a number of workers, replacement rates, so that's economist jargon for the amount that you get from the federal program relative to what you were being paid before, actually tend, for the median household, there's a study coming out of some of my former colleagues at the University of Chicago, which shows that the median replacement rate, I think was 134%. Which means you'd get 34% more than your previous paycheck while these additional benefit payments are around. Now, whether you think that's a big problem or not is from a perspective of whether this is gonna change workers' incentives. It is not totally clear. Partly because is temporary. It's not going to last forever. And if I was a worker thinking about my future, I'd be much more worried about the long run effects of losing a job in a recession than a short period of time with $600 a week extra pay. And they're temporary. So they're going to wear off.

- [Karen] Right.

- [Larry] So that part, I'm maybe less concerned about, because UI does not last forever. And I would say that offsetting that is we have, at this point, decades worth of work studying long-term earnings outcomes for workers who lose their jobs and the types of events that you're seeing in these recessions. And you would often find that a loss, essentially, a permanent loss in income of 15% might not be uncommon for a worker who loses a job in a recession. And moreover, the evidence we have suggests that those losses are larger in recessions. So, for the workers who happened to lose their jobs in big recessions like this one, those earnings losses could easily be 25, 30% permanently. So, at least if I was a worker weighing the benefit of $600 extra a week for a few weeks against those long-term risks, I would probably not change my decision on that basis. But that doesn't mean that everyone necessarily has that information. And certainly if you take the perspective of business owners in these low paying sectors, this is kind of a one-two punch. Because not only can you not operate your business, not only are customers scared to come in, but also if your workers don't feel safe and are receiving benefit payments that might actually exceed what their prior compensation looked like, there's not a very strong incentive for those workers to come back, or at least not to come back quickly. On the other hand, while those workers are receiving UI payments, the business owner is not required to foot the bill for their salary. So it might be that there's not a lot of demand for those workers anyway, for the next couple of months. And so that aspect of the transfer scheme, we may actually look back and decide that that wasn't quite as crazy as some people are saying now.

- [Karen] Restaurants, for example, may not need as many employees, 'cause they're operating at 50%?

- [Larry] We all kind of know that there are certain sectors where the demand for labor is depressed, partly because just no one's going to be able to buy the product. And so if those workers are receiving unemployment benefits, that might actually help stop the pressure on their own personal finances in terms of their ability to keep making their mortgage payments, keep making their rent payments. And another thing that's tended to happen for these workers is they've now lost their health insurance during a pandemic.

- [Karen] Yes.

- [Larry] So, it's true that they're receiving potentially more than what their take home pay might have been. On the other hand, a lot of those calculations that I was referring to, they explicitly mentioned that they exclude benefits. And it's probably fairly costly to sign up for health insurance right now in the midst of a pandemic. So, I guess it's a little too early to say for sure what's going to happen. I think without question, there are going to be some sectors where this was a suboptimal policy and it's made things worse, and there going to be other sectors where maybe this kind of helped everyone slog through. And that's not surprising, because it's a uniform policy and this is a very complex situation. And the way it's playing out for every single business, every single sector, every single occupation is a little bit different.

- [Karen] For Amarillo, the education and health services sector in May was down 700 jobs from the same month a year Ago. Employment in the sector had improved slightly by June. Melanie Eggleston is a licensed massage therapist who has closed her business temporarily due to the pandemic.

- [Melanie] I also am an oncology trained massage therapist. So, I work for the Cancer Survivorship Center, and they are currently closed as well.

- [Karen] That's a lot of closed.

- [Melanie] Yeah.

- [Karen] What does that mean for the bottom line?

- [Melanie] I'm not working at all. I don't know when I can work again. Legally I can, as far as my private practice, but I've done a lot of research and none of the professional massage organizations recommend being open right now. They just feel it's too dangerous for the clients and too dangerous for the massage therapists. Although they do realize that there are a lot of massage therapists that will not have the option to not work right now. They will have to go back to work, even though it is dangerous. But I have made the choice for the safety of my clients and for my own health to just kind of stay on pause and continue to monitor the situation. I'm currently able to receive unemployment, but I don't know how much longer I'll be able to receive that. I'm luckily in a pretty good position financially. My husband's work hasn't really changed at all, except luckily he gets to work from home now. But he is a software developer. That's really easy to do from home. So his company is keeping all of their developers at home. So he's safe. He's still making the amount of money that he was before. So, it will definitely affect us in that we just have to be more careful, but we generally live pretty frugally. So, I think luckily we have always been really careful with our money and saved when we could. But I know that I am maybe unusual in that situation where I am definitely, the money is nice, you know, that I make. But for me, the impact of being out of the massage studio is more about that I just absolutely love what I do, and it's part of my identity, and seeing my clients is really important to me. So, there will be a financial impact, but it will not be as severe as it will be for other people.

- [Karen] Talk a little bit about massage therapy and why that is your identity as far as work.

- [Melanie] Oh gosh. You're probably gonna make me cry. I've spent a lot of time crying about this. I think massage therapists are really different, and I think that working in this field is really different because we see our clients, really, at their most vulnerable. I think that my clients, I have a really wonderful client base and I have a lot of regular clients that I see often, and I have for many years. I have some clients I've had for almost nine years. And when I became a massage therapist, I had no idea how it would be woven into me, but I just think that it's part of who I am. And I feel like my role as a person in this world is to be a helper and to make people feel good. So, I feel kind of lost that that's, I'm not really able to do that right now. In addition to the fact that I think that with all of this going on, we're physically distancing from each other. And I'm grateful I have my husband living with me and my daughter lives with me. But I do know that there are people out there who are living alone who really need something like massage therapy, but aren't really able to get it.

- [Karen] How confident are you that massage therapy will be something you can come back to?

- [Melanie] I'm actually, and I hate to admit it, not very confident about returning to massage therapy anytime soon. I'm hopeful that it will get better, but the more I read and the more that I learn about it and the more I watch our numbers, and unfortunately seeing people who are acting like there's nothing going on and actively denying that there is anything going on, it's very discouraging for me. And for me also, my fear isn't even just hypothetical. What if I got a client in my office who didn't know they were sick and I got sick? Or then all the clients I saw after them got sick. When I did decide that I wasn't going to open, even after Governor Abbott said that legally we could reopen, I sent out a text to my clients, and one of my clients actually, I don't think she realized she was admitting any wrongdoing at this point, but she told me that she had been on quarantine from a date that was prior to when I saw her. And that was right before I closed my doors. And that was just absolutely terrifying for me that although she was on a health department mandated quarantine, five days later, because she still felt well, she chose to come to my office and to get a massage and potentially expose me and all my clients. I work not only at the Survivorship Center, but I also work in the chemo rooms at the two cancer hospitals here. And when I let my mind wander to what could have happened if I was incubating it and was going to get sick with it, and if I hadn't decided to close my doors and I went into those chemo rooms or went to the Cancer Survivorship Center or saw my healthy or my non-healthy clients in my private practice, just the rippling effect that could have taken place. And I mean, I just, that is so devastating to me to even really consider. She did eventually get sick, and she and her husband both were very ill.

- [Karen] So, if you're not exactly confident of massage being the way forward, are you looking into other things that you can do?

- [Melanie] I actually am. I'm on this road with the oncology massage therapy where, it's surprising. Or maybe not surprising, but when somebody receives a cancer diagnosis, regardless of what their prognosis is, they start thinking about the end of life. And so I have very often found myself discussing end of life plans and what people are thinking about while they're sick and while they're hopefully recovering from cancer and during their cancer treatment. And I realized that I may eventually want to study to work with people in the end of their lives. Especially, I'm getting older, and some of my healthy clients are a little harder on my body than my non-healthy clients, just because of the amount of physical work it takes to work on them. And so I thought, oh yeah, maybe as I get older, I'll eventually study being an end of life planner, or I could go and support somebody in the end days. And again, with COVID, I don't know how much I can actually go to people's homes and help them have that experience that they want. But I can at least do a lot of virtual work in writing up their plans and what their wishes are. And so I figured that's probably five to 10 years away. And just, I guess that, someday, someday, someday, but then the universe is like, oh, guess what? I think maybe it's now. Because I just, I have this time on my hands and it's something I'm interested in and I feel like there's a need for it. So I'm actually, just last Sunday started a class.

- [Karen] And Melanie is not alone. According to Morris, Workforce Solutions expects many job seekers will want to retrain for something new.

- [Trent] That's just an area we've got to really focus on and educate the public and watch over time to see how it turns out.

- [Karen] Yeah, that is one thing that the attention needs to be to, is what professions are doing well in making living wages as opposed to others?

- [Trent] Exactly.

- [Karen] What are those categories?

- [Trent] We have a have a list of what we call targeted occupations on our website,, under a tab called Labor Market Information. Those would include, again, positions like truck driving, a lot of the trades. Those occupations are not going to be as affected by the downturn of the economy. People still need their cars worked on and their air conditioners running and mechanics and plumbers. We still believe those are good occupations, and ones should be looked at strongly now, as opposed to just everybody thinking that your students need to go to a four-year college and get a four-year degree. Those trade skills jobs I think will be more attractive in the future for sure.

- [Karen] They tend to have a pretty good hourly pay.

- [Trent] Exactly. And they're steady jobs. And they may not always be exactly what somebody is thinking of an air conditioned office, but those jobs pay well, and they're not affected by economic downturns. That list also includes accountants and teachers and bookkeepers and computer support folks, food service managers, truck, tractor, or trailer drivers, machinist, mechanics. So it's just a pretty all inclusive and pretty diverse list that we believe are still very valuable occupations to train for.

- [Karen] Here again is Larry Schmidt from MIT.

- [Larry] What's happened is that the largest job losses in the recession have been for the lowest paid employees.

- [Karen] Yes.

- [Larry] And probably the best evidence we have on this is from a recent paper that uses data from ADP, which is one of the big payroll processors. So they have millions of workers. They're processing paychecks for these people essentially every week.

- [Karen] Right.

- [Larry] And you see very clearly in the ADP data, yes, average wages per worker have gone up, which is consistent with what we see from the employment reports. That's just because you see that the lowest paid workers are more likely to drop out of the sample because they're now unemployed. And so then you're just, that average of who's left over is gonna disproportionately have high income people in it. If you instead follow the same worker over time, which they can do in that data, you see that there's been no increases in wages, not surprisingly, and you see a nontrivial fraction of workers who have already accepted big pay cuts. So, yeah, in terms of the pressure on wages, if anything, wages are likely to be pushed downwards. It could be that over the very short term, there are workers who may be less willing to accept certain types of jobs due to the safety effects and because they currently are receiving benefits that require taking no risk and might even exceed what they were making before. But I don't think those larger UI payments are likely to stick around, or certainly not with the same magnitude that they currently have.

- [Karen] Right.

- [Larry] So, I'm not sure what the long run implications for wages are likely to be. 'Cause again, coming against that is all this evidence we have from lots of countries, lots of recessions, basically saying that you do not want to be unemployed in a recession. The workers who experienced big spells of joblessness during recessions turn out to have very bad outcomes later on.

- [Karen] What do you mean?

- [Larry] So, we've seen that their earnings are permanently Lower. I also have some work that I've done that suggests that the risk to their earnings goes up. So, being unemployed in a recession is far from a pleasant outcome. And I think most workers would like to avoid it to the extent that they can. But what may be happening right now is this bigger challenge, which is that there are some sectors that are likely to have substantially depressed demand because of the social distancing requirements for at least the medium term. So what do we do with those workers who were previously working in those sectors? You probably don't want to pay them unemployment insurance benefits the whole time. You also may not want to fully retrain them and send them elsewhere, because they may have specific skills. So, this could be a situation where actually the right policies look like employment subsidies on the firm side. So, you basically make it easier for the restaurant to keep those workers on payroll than would have been the case otherwise by basically doing the opposite of a payroll tax, right? So right now for each worker, you have to pay some money to the federal government for social security type benefits. We could actually do the opposite. But what I would prefer is that we kind of focus on the really hard hit sectors. Things where it really is a different world than it was four months ago. And we make it easier for them to keep their workers around, to keep their workers paid, but subsidize that cost that those those firms are facing so that we still have small restaurants. We still have all these local businesses that people love, and we help them kind of limp their way through this recession, to the extent possible.

- [Karen] This is not going to be a short recession, from what I'm reading. Is that your take?

- [Larry] Again, it's a little too soon to tell, but I do think one of the things that really worries me is if schools are unable to reopen. People have been discussing this debate purely in terms of outcomes for students and safety of teachers. And obviously, as a parent of three kids, I'm very worried about outcomes for students. But I also think we need to think very carefully about outcomes for working parents. Because in the survey data we look at, for example, one in three of the survey respondents who was employed as of March, prior to this mess starting, had a child under the age of 14 at home. And for those workers, if they don't know whether their kids are gonna be at home or at school, they're not gonna be as productive, regardless of whether they can work from home or they can't work from home. Not having reliable childcare, it has this knock-on effect through productivity that I don't think we're fully acknowledging in this discussion about schools as well. So, my preference would be help schools spend their way out of the problem. If we want to spend money, many of the people who work at R and D, high tech startups, they probably don't need big checks from the federal government. They would keep their workers around anyway. I'd much rather send a big check to the local public school to help them spend money on personal protective equipment or testing or whatever is required to kind of trade off expenditures versus social distancing requirements. Those types of spending measures, the same, it's kind of similar logic to spending money to develop vaccines and treatments, right? They have this huge knock-on effect because they can unlock potential for other sectors of the economy. Well, I just think the same type of argument applies for working parents, as if suddenly they're allowed to kind of figure out how to work from home better, or they're able to actually go into the office if they're in jobs where they cannot work from home. Being able to have school be open and reliable, and of course safe, would have a huge benefit to the private sector as well.

- [Karen] Anything else we're missing in this conversation?

- [Larry] I would also think that it's important for people to remember that not everyone can work from home. And that unfortunately, the types of people who are least likely to work from home are also people who tend to already be in the least fortunate parts of society. So, when we impose policies that, like strict social distancing requirements, we tend to be disproportionately impacting those types of workers. So for example, what we saw in the survey data was that women without college degrees with small children at home, if they were in jobs where you cannot work from home, were three times more likely to lose their jobs in the month of April. So, these choices that we're making, the choice to kind of stay at home is not necessarily safer for everyone. At least not from an economic standpoint. And so we really should acknowledge that there's going to be huge distributional consequences to these types of decisions as well. And that part of the discussion is not always, I'm not always hearing that when people are talking about it. It's like, safety versus economics, and it's not that simple.

- [Karen] What do you mean distributional consequences?

- [Larry] I mean that, if we aren't careful, many of the policy choices we're making right now are going to have concentrated costs on certain members of society. And the way things are lining up right now is that this pandemic is very regressive in the sense that the people who are being hurt the most are those who are already kind of lower in terms of socioeconomic status. So, workers with lower education, lower income, people who are younger, have children around. All of those people are most exposed to the economic costs of the pandemic. And so this is likely to be exacerbating existing inequalities that are already there. So one simple concrete example of that is if you think about schooling, right? The high income parents are gonna be more likely to have the devices, the stable internet access, the types of things you need to make remote learning sort of work, and the lower income parents are not, right? And they're also going to be more likely, statistically, to be unable to work from home. So if they lose access to childcare, for example, it's gonna be the low income workers who are gonna be hurting the most, in the sense that they can't be kind of working from home in one room and having their child on the iPad in the other room.

- [Karen] We've been having a conversation about income inequality in this country for awhile now. Will this only widen that gap between the haves and have nots?

- [Larry] That's certainly what appears to be the case when you look at the data, is that this is hitting the lowest income workers the hardest. It's hitting low income sectors the hardest. And kind of, especially, there's been a big divide between white collar type professions and blue collar type professions, to kind of oversimplify. And I think this is also likely to increase those divides as well.

- [Karen] You said you wouldn't want to retrain everyone because some people have unique skills that are needed and in certain sectors, but is this a time for some of those who are doing the jobs that are hardest hit to think about retraining?

- [Larry] Potentially. And actually we have, there has been precedent for this sort of thing in the past. So, the federal government introduced a policy called trade adjustment assistance, which had a somewhat similar idea in mind, which is that if you think about opening up the country to international trade, that tends to make everyone better off in the sense that we get access to more goods. It tends to make things less expensive. You can buy these great things at the grocery store that might not have been available before. But they often impose concentrated costs. So then we see that certain workers, certain areas have been hardest hit by being exposed to foreign import competition. And the government introduced a program called trade adjustment assistance, which basically allowed workers to receive kind of better unemployment insurance, longer unemployment insurance payments. But it was also coupled with job retraining opportunity. And what's interesting is that there's recent work that came out which suggests that this worked pretty well. So, the evidence on job training programs is somewhat mixed. But this particular one actually seemed like it worked pretty well in terms of workers' long-term outcomes. You see workers switching sectors. You see them experiencing pay increases when they switched sectors. And it could be that this is an opportunity for some workers to, rather than just wait, or even when they come back, they may be facing forces that are gonna put downward pressure on wages. This could be a great time to acquire different skills and to move into other sectors. So the likely kind of multiplier on subsidizing that activity could be quite large. Multiplier is just economist jargon for the benefits are likely to exceed the costs.

- [Karen] Like most of us, Melanie Eggleston couldn't anticipate how career altering a pandemic might be.

- [Melanie] We always think, oh, those things never happen Here. Sort of, maybe it's the American way that, sure, there was MERS and there was SARS, but those didn't come here. And there was Ebola. It never really got here. So, I think that it was a false sense of security, but it was something I never really contemplated could close my business temporarily or permanently.

- [Karen] And you want to hope that this is a one time situation, but now you understand folks looking at the kind of work they do.

- [Melanie] Oh, of course, of course. My daughter for years has said she wanted to be a tattoo artist. Now she's like, oh hell no. I don't want to be that close to people. One of my, in fact, my best friend for many, many years worked security at several different bars in Chicago. And they're all talking about reopening. And he's so nervous about it, you know? And it's just trying to think, he has sort of made this life about working in the bar scene there. And it's really served him well up until now. And so, all these things you never would have thought. It's funny, even things like my husband and I went to Disney last year and we loved it. And we came back and we immediately started saving our money to go back. And now I'm like, yeah, they're opening, but I don't think you could pay me enough money to go back right now.

- [Karen] It's changed everything.

- [Melanie] It really has. Every single thing that we do, I think you need to weigh the benefit versus the risk with everything. And sometimes the risk might be worth it. Sometimes taking a small trip somewhere where you're going to stay kind of isolated from people, even though you may have the risk of being in a new environment or stopping for gas along the way, the benefit of doing that might outweigh the extra risk. But then there's other things, I feel like the benefit doesn't outweigh the risk. And sadly, I feel like massage falls into that category of, it's important and it's wonderful and a lot of us really feel like we need it, but is it worth risking your life?

- [Karen] That's the big question. That wraps up another episode of "The Number." Thanks for joining us. If you'd like to learn more about these topics, we have resources on our website, We'll be back next week with more statistics, context, and community.


From Massachusetts Institute of Technology:

Papanikolaou, Dimitris and Schmidt, Lawrence, Working Remotely and the Supply-Side Impact of COVID-19 (June 23, 2020). Find the PDF here.

Workforce Solutions Panhandle labor market information:

Local support provided by

August Featured Underwriter


Sewing Nook