Unemployment Drops — but 200,000 Jobs are Still Missing

Washington's underlying economic problems won't be fixed without strong rescue and relief

While Washington’s overall unemployment rate dropped from 10.2 percent in July to 8.5 percent in August, the state still has 200,000 fewer jobs than in February. Maintaining strong public health measures and avoiding state budget cuts will be crucial for rebuilding the job market — but the state’s economic problems go much deeper.

Leading up to the pandemic, stagnant wages and rising prices created a precarious economy for millions of Washington residents. Since the pandemic began, many high-wage employees have been able to work from home at full pay – but low- and middle-wage workers in restaurants, child care, retail, and health care have either lost hours, been laid off, or forced to put themselves and their families at risk by continuing essential jobs in the community.

Today, unemployment is disproportionately higher among workers who are younger, lower-income, and Black, Indigenous, or People of Color. Basic needs like housing, health care, and food security are at risk for hundreds of thousands of Washington residents.

Congress needs to act now — and state lawmakers need to step up when the legislature convenes in January — to make substantial public investments in those areas in order to enable people to rebuild their lives and put the state’s economy on sound footing.

Strong public health measures, increased state spending crucial for rebuilding job market

Maintaining public health measures to stop the spread of COVID-19 is crucial for economic recovery. Forty-nine percent of the jobs that have disappeared since peak employment in February are in three sectors that typically have a high degree of public interaction: Accommodation and Food Services (-53,050 jobs); Health Care And Social Assistance (-22,400 jobs); and Arts, Entertainment, and Recreation (-22,300 jobs).

Tax reforms that ensure the state’s wealthiest households start paying their fair share (and thereby increase state revenue) are crucial for restoring another 30 percent of those missing jobs, in Local Government (-34,650 jobs) and State Government (-23,550 jobs). These positions are vital for protecting our state’s working and unemployed people, children and families, students and seniors, and vulnerable populations.

Tableau
Leading up to the pandemic, stagnant wages and rising prices created precarious economy for many

Many people — especially those with low-to-moderate incomes — were on an economic knife edge, even before the COVID-19 pandemic struck. During the economic expansion that followed the Great Recession, Washington’s employers added high salary jobs in technology, business, and other professions — but also many low wage jobs in restaurants, retail, and other services.

The state’s strong minimum wage law helped ensure the lowest-paid workers don’t lose ground, but high-salary earners saw the biggest gains in income. Most people’s wages simply kept pace with inflation. Meanwhile, costs for housing, health care, child care and higher education far outpaced the (very) modest increases in a typical family’s income.

Tableau
Unemployment disproportionately higher among workers who are younger, lower-income, and Black, Indigenous, or People of Color

As of mid-September, unemployment claims among workers who:

  • Are age 18 to 34 have averaged 1.9 percentage points higher than for those age 35 to 64;
  • Have not completed a college have averaged 3.2 percentage points higher than for those with a Bachelors/advanced degree;
  • Are Pacific Islander, Black, or Native American have averaged 6.6, 4.5, and 1.7 percentage points higher, respectively, than for Caucasian workers.
Basic needs like housing, health care, and food security are at risk for hundreds of thousands

The latest survey results from the U.S. Census Bureau highlights how difficult the economic circumstances are for many Washington residents. Of those surveyed:

  • 48 percent (1.1 million) of people with incomes below $75,000 report losing employment income since mid-March.
  • 8.9 percent of renter households (139,700) are behind on rent payments, and 18.5 percent (289,000) have little to no confidence they’ll be able to pay next month’s rent.
  • 7.7 percent (273,800) of people age 18-64 have no health insurance.
  • 6.4 percent (376,800) of people report sometimes or often not having enough to eat.
Tableau
Washington’s underlying economic problems won’t be fixed without intervention by lawmakers

Federal and state lawmakers can rescue families and small businesses — and rebuild a more equitable and resilient economy — through significantly increased investments in housing, child care, health care, higher education, income supports, green infrastructure, and other essentials. Congress should act immediately to pass an aid package for state and local governments.

State lawmakers, for their part, should remember this key lesson from the Great Recession: Budget cuts in the midst of a recession will worsen job losses and force more businesses to permanently close. Adjusted for inflation, nearly every state agency already has significantly less funding per capita in 2019 than in 2008.

Unless legislators reform Washington’s tax code to generate additional funding, they’ll have to cut funding for health care, education, mental health, housing, child welfare, and other services that are helping keep residents afloat now, and will help rebuild our economy for the future.

  • Leave a Reply

Your email address will not be published. Required fields are marked *

More To Read

State of Working Washington

October 2, 2020

The Wealth Divide: It’s Not Race vs. Class — It’s Both

Bold policy choices can address gaps between (and within) racial/ethnic groups

State of Working Washington

March 4, 2020

Unemployment is at a 40-year low — why aren’t wages rising more?

There's some slack in the labor market -- and a lack of worker bargaining power

State of Working Washington

September 5, 2018

The Unemployment Rate Isn’t All That Matters

“Slack” is why wages are low even when unemployment is down