Low-wage job losses fuel the US stimulus debate
May 11, 2020 | By Kristina Hooper, Chief Global Market Strategist
A perspective from our Global Market Strategist
As expected, the US Employment Situation Report for April was abysmal. Unemployment rose dramatically as pandemic lockdown measures were implemented across the US, with hospitality and leisure posting the biggest job losses. Amidst all the terrible data, there was one obvious and glaring takeaway: Job losses were concentrated among low-wage workers. In fact, so many lower-paying jobs were lost that wage growth rose markedly, underscoring how hard hit lower-income workers have been by this pandemic.
Of the 20.5 million jobs lost in the US in April, respondents categorized the vast majority of losses (18 million) as temporary.1 However, we would caution that the length of the job losses is dependent on the ongoing policy response — particularly the health response and the fiscal response. A temporary loss can turn permanent if fiscal stimulus is inadequate or if the lockdown protocols are loosened too quickly, resulting in a resurgence in infections.
Learn more about:
- The financial health of US households
- Consumption as a critical driver of US gross domestic product (GDP) growth
- Additional fiscal stimulus
- How ending lockdowns prematurely could lead to a slower recovery
1 US Bureau of Labor Statistics, as of May 8, 2020