A new report, out Thursday, reveals that COVID-19 lockdowns had a far worse effect on working-class Americans than high-wage Americans.
Data from Harvard University, Brown University, and the Gates Foundation show dramatically different job market recovery for “high wage,” “middle-wage,” and “low wage” workers.
Between January 2020 and March 2021, Americans earning above $60,000 observed a 2.4% overall increase in employment. Meanwhile, workers earning below $60,000 and workers earning below $27,000 saw 4.5% and 23.6% decreases, respectively.
While Americans in the “Professional & Business Services” sector saw a 0.5% decrease in employment, the “Retail & Transportation,” “Education & Health Services,” and “Leisure & Hospitality” witnessed dips of 3.5%, 6.4%, and 20.7%.
Writing for the Foundation for Economic Education, Brad Polumbo commented:
The findings reveal that government lockdown orders devastated workers at the bottom of the financial food chain but left the upper-tier actually better off… They offer yet another reminder that government lockdowns hurt most those who could least afford it.
Polumbo also noted that the lockdowns themselves — not COVID-19 — were the most compelling culprit behind the economic fallout:
Some critics argue that the pandemic, not government lockdowns, are the true source of this economic duress. While there’s no doubt the virus itself played some role, government lockdowns were undoubtedly the single biggest factor… And don’t forget the fact that heavy lockdown states have consistently had much higher unemployment rates than states that took a more laissez-faire approach.
Indeed, job market recovery significantly differed on a state-by-state basis. While Florida, South Carolina, and Arizona saw 16.1%, 15.3%, and 13.3% employment rate increases, California, New York, and Hawaii saw 6.8%, 5.1%, and 1.7% increases.
With a 9.8% decrease in employment, Washington, D.C., trailed the rest of the nation in labor market prosperity.
Moody’s Analytics and CNN Business recently produced a “Back-to-Normal Index” revealing that Florida, South Dakota, Rhode Island, Nebraska, Idaho, and other states that quickly rescinded lockdown orders have returned to — or exceeded — pre-recession economic output. Meanwhile, New York — which aggressively enforced its lockdown orders — trails the rest of the nation at 79% of pre-recession capacity.
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