Report: COVID-19 will worsen income inequality

By Meghan Holmes
Contributing Writer

A report released last week shows that the Coronavirus will worsen income inequality and disproportionately impact people of color, with the New Orleans metro area having the seventh-highest percentage of high-risk workers (13.7 percent) in the nation. High-risk workers are those who are unable to work remotely, and are employed in industries deemed “non-essential.

“Metros like New Orleans, where the local economy is rooted in the tourism and service sectors, are likely to have more of the high-risk workers hit hardest by the quarantine economy, while technology hubs will experience a softer blow,” said Justin Chaplin, a content associate with Apartment List, the website who released the report. “The new quarantine economy has forced hundreds of millions indoors, and the ability to work from home has emerged as a key factor in determining who can and cannot continue to do their jobs. However, the ability to work remotely is far from universal and varies by geographic market.”

Using data from the Census Bureau, the Department of Labor, and the Bureau of Labor Statistics, the report, called “The Quarantine Economy,” examines the impact of the Coronavirus on the nation’s workforce, using the concepts of essentiality and the ability to work remotely to give a nuanced breakdown of workers and determine which people are at the greatest risk of economic uncertainty.

The report shows a stark correlation between income and job flexibility, with America’s lowest-earners also being least likely to be able to take advantage of remote working arrangements. Among workers who earn $100,000 annually or more, a majority (51.7 percent) say they can do their jobs from home. Meanwhile, remote work is possible for just 15.3 percent of those who earn $25,000 per year or less.

High-risk workers include people like cooks and maids, who average around a 12 percent poverty rate and are incapable of working from home. The report categorizes workers in four ways, with the aforementioned high-risk category as well as secure, low-risk and exposed classifications. Secure workers, like financial analysts and tax preparers, and low-risk workers, like web developers and architects, will bear the least economic burden, and are more likely to be able to work from home. Exposed workers are those who work in industries deemed “essential,” and might face less of an economic impact than high-risk workers, but also run a greater risk of contracting Coronavirus.

Exposed workers are not only at a higher risk of getting sick, but many do not receive benefits. Fifty percent have no sick pay and 30 percent are uninsured.

The report also shows that people of color disproportionately represent high-risk and exposed workers. Nationally, 45 percent of exposed workers and 46 percent of high-risk workers are non-white. Non-white workers make up 32 percent of secure and 30 percent of low-risk jobs.

“Workers who risk losing their jobs are more likely to be low-income, racially-diverse, and have less health coverage. This means the negative effects of the quarantine economy will be disproportionately concentrated among Americans who are already economically-burdened,” Chaplin said.

As cases of Coronavirus rapidly increase throughout Orleans and Jefferson parishes, government officials work to get more supplies and set up a makeshift surge hospital at the convention center. More than 1,000 cases have been reported in Orleans Parish alone, and last week Mayor Cantrell issued a stay-at-home order to attempt to mitigate the virus’s spread. In a press conference, the mayor estimated a $100 million budget shortfall due to lost tourism revenue, and thousands have filed for unemployment in the last two weeks.

“This is going to be the disaster that defines our generation,” Collin Arnold, director of the city’s Office of Homeland Security and Emergency Preparedness, said.

This article originally published in the March 30, 2020 print edition of The Louisiana Weekly newspaper.