Even as the economy recovers, pain from the COVID-19 lockdowns still lingers.
The U.S. economy may be slowly pulling itself out of the doldrums inflicted by social distancing and government lockdown orders promoted as efforts to stem the spread of COVID-19, but many Americans continue to suffer.
Half of Americans who lost their job because of the pandemic are still out of work, and the resulting damage to finances falls hardest—as you might expect—on lower-income people who have little cushion against hard times. That’s something to keep in mind as politicians contemplate renewed restrictions, especially given the potential for economic pain to worsen already-simmering social tensions.
“Overall, 25 percent of U.S. adults say they or someone in their household was laid off or lost their job because of the coronavirus outbreak, with 15 percent saying this happened to them personally,” Pew Research reported last week. “Of those who say they personally lost a job, half say they are still unemployed, a third have returned to their old job and 15 percent are in a different job than before.”
What makes the situation even worse is that the burden falls hardest on those who can least afford it. “Lower-income adults who were laid off due to the coronavirus are less likely to be working now than middle- and upper-income adults who lost their jobs (43 percent vs. 58 percent),” Pew adds.
Among those who have continued working or are back to work, many are making do with reduced hours and pay cuts. About a third of adults report they or their households have suffered such trimmed income opportunities. That means less money in-hand and greater difficulty in making ends meet.
“A quarter of U.S. adults say they have had trouble paying their bills since the coronavirus outbreak began,” the Pew report notes. “Among adults with lower incomes, 46 percent say they have had trouble paying their bills, and about a third (32 percent) have had problems paying their rent or mortgage since February—significantly higher than the share of middle- and upper-income adults who have faced these struggles.”
Fortunately, the economy shows signs of recovery, though not full health by any means. An economic index created by Moody’s Analytics and CNN shows unemployment declining from its pandemic peak and both hiring and hours worked at small business on the rise. But overall economic activity is only at 81 percent of where it was when lockdowns began back in early March. While not everybody is affected to the same extent, we’re living in a poorer country than we did just months ago.
And the effects are expected to linger.
“The ongoing public health crisis will continue to weigh on economic activity, [ … ]