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Business News/ News / World/  Covid hit US jobs much more than 2008 crisis
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Covid hit US jobs much more than 2008 crisis

A new study finds service sector jobs, especially in the leisure and hospitality sectors, were hit harder now than in 2008

Photo: HTPremium
Photo: HT

Unemployment in the United States has risen to historic highs in recent months due to covid-19. Businesses struggled to stay afloat due to social distancing rules, and livelihoods were lost, much like the 2008 financial crisis. But a new study finds that the current crisis has hit the US economy even harder.

In the working paper, Ippei Shibata of the International Monetary Fund uses US employment data to estimate the impact on jobs in various industries in both 2008 and 2020. The study makes this comparison across worker demographics such as age, race and gender, job characteristics and wages. Shibata defines jobs that were allowed during the pandemic as “essential", those that need human interaction as “social" and those that could be done from home as “teleworkable".

The study finds service sector jobs, especially in the leisure and hospitality sectors, were hit harder now than in 2008. Except for agriculture, construction and finance, the current crisis has hit more jobs across industries. “Social" jobs have been affected more, while those termed “essential" less so in the current recession.

In both crises, the study finds those who could work from home easily, such as management or business professionals, to be less affected. But among those who could not, the current crisis led to higher unemployment than the previous one.

The authors also find more women to be unemployed by the current pandemic, than in the aftermath of the financial crisis. The study finds similar groups of workers—young, less educated, people of colour and women—to be affected the most in both these episodes. But the less educated and Black and Hispanic workers have lost more jobs in the current recession.

Also read: The Distributional Impact of Recessions: the Global Financial Crisis and the Pandemic Recession

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Published: 09 Jul 2020, 11:59 AM IST
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