Working Wisconsin faces new challenges in the COVID-19 pandemic

The COVID-19 pandemic imposed significant new hardships on American workers — and it’s exposed just how much hardship many of them have been enduring for years.

That’s a central conclusion of  a report published today, the 2020 edition of the State of Working Wisconsin. The report is published by COWS — formerly the Center on Wisconsin Strategy — a policy research and analysis organization at the University of Wisconsin-Madison.

In its 25th year, the State of Working Wisconsin comes in a new form for 2020. Instead of being released on Labor Day, the report is being published six and a half weeks earlier. And instead of a static, annual summary looking back on the previous year, the authors are using data produced in nearly real time, and promise to update it regularly on the report’s website.

The report maps three broad trends. Although they’re already familiar, it examines them more thoroughly than periodic statistical snapshots offer:

• Unemployment remains at record highs, while the safety net for jobless workers has become increasingly frayed.
• So-called essential workers are among the poorest paid, most economically vulnerable, and also most at risk for COVID-19.
• For a segment of the workforce, jobs have shifted home — and while they’re “the most privileged workers in the COVID-19 context,” the report states, they also shed a light on the pandemic’s emerging crises of child care and education.

Throughout, the report unveils how “racial inequality runs through the reshaping of work, in a state that is at the highest end of racial disparities that are growing in the nation,” says economist Laura Dresser, COWS associate director.

All of those trends are rooted in underlying and longstanding gaps in the state’s economy that have left workers farther and farther behind, the report observes. “COVID 19 exposes and exacerbates all of these underlying issues,” Dresser says.

Record job losses

The immediate numbers show the dramatic loss in jobs since the pandemic took hold in Wisconsin in March, prompting a state health emergency order that shut many businesses, restricted public gatherings and instructed residents to stay home as much as possible. They also show the beginning of a comeback, albeit one that is “insufficient and fragile, and full recovery remains far off,” the report states.

By April,  Wisconsin had lost 465,000 jobs, a 15.5% decrease compared with February — “the last ‘normal month’” before the pandemic, as the report puts it — and almost three times the 5.8% of jobs lost at the depth of the 2007 Great Recession.

“In one month we lost enough jobs to take our labor market back to the size it was in 1994,” Dresser says.

In May, the state recovered 74,900 jobs, and in June, another 104,600, bringing the state’s net job loss by June to 299,600, or 10% of the February baseline — all of which takes  the state’s job count back to what it was in 1998.

Although an improvement, that deficit “is substantial and a serious problem for working people in the state,” the report says. “The recovery from April to June appears to be strong and consistent but with COVID-19 on the rise, gains may be impermanent.”

After peaking at 14.1% in April, the state’s unemployment rate improved to 8.5% by June — still more than twice February’s 3.5%.

The leisure and hospitality industry, including restaurants, bars, hotels and related businesses, suffered the most dramatic job loss, with 88,600 positions eliminated — a 31% drop. And the faces behind those jobs reflect the other central theme of the 2020 report.

“Even before the collapse, the industry’s workforce of waitstaff, bartenders, dishwashers, housekeepers, and others suffered low wages, volatile and unpredictable hours, and few benefits,” the report states. “These workers – more likely to be women and people of color – are now facing a new reality. Finding steady work in the industry is likely to remain difficult.”

County-by-county data included in the report show that the economic impact from the pandemic isn’t limited just to a handful of urban areas in the state.

“The story we get there is that the dislocation and disruption is really widespread,” Dresser says. “This is not just a Milwaukee story.”

Pervasive challenges

Notwithstanding the job growth in May and June, the report points out the persistence of severe economic impacts from the pandemic.

Unemployed workers have encountered roadblocks to getting jobless pay, and a federal $600-a-week supplement will stop at the end of the month if Congress doesn’t renew it. And undocumented immigrant workers — whose wages are subject to taxes that support the unemployment insurance system just like those of other workers — get neither unemployment compensation nor access to other federal safety net programs.

Job loss also leaves displaced workers without health insurance, at least until they can get coverage through other sources. The report notes that the U.S. is the only developed nation that ties health coverage to work — driving up the cost and producing poorer health outcomes.

For essential workers remaining on the job — not just  healthcare and public safety employees but also  grocery, food processing, transit and childcare workers along with those in a number of other fields — the pandemic has highlighted wages often near poverty level and the absence of benefits such as paid sick leave.

Those workers also need personal protective equipment because so many of them work in situations where they are likely to be exposed to others in close quarters, putting them at risk for COVID-19 infection.

“A lot of people are being forced into exposure who might not be thought of as essential any more,” Dresser says. “They get to still work, but in their work they face the danger of getting sick.”

The report says worker safety would be enhanced by a voice on the job — along with information and job security that allows them to report safety violations — protections that would be offered by easier unionization.

“Owing directly to Act 10 which undermined public sector unions and ‘right to work’ which undermined private sector unions, Wisconsin workers are unfortunately less likely to be union members than workers in the nation as a whole,” the report states.

The report also summarizes the difficulties faced by workers who have children — whether they’re among the 30% who are able to stay on the job at home, or the majority who lack that option.

With schools closing in the spring and a growing number now expecting to start the new school year this fall online to help reduce the risk of transmitting the virus, parents “will now face the impossible choices of last spring, seeking to balance work and school in the home, for those lucky enough to work in their homes,” the report states. “For those who must work outside their homes, finding care is likely to be very hard.”

The continuing racial gap

The report emphasizes the role of racial disparities in understanding the lives of Wisconsin workers, building on a COWS report last fall on racial economic inequality in the state and across the Midwest.

It also includes short biographies of three Milwaukee workers, all in jobs deemed essential during the pandemic. As time goes on, Dresser says, more such vignettes will be added from around the state, along with guest commentary.

The pandemic helped inspire the report’s change in presentation as well as in the timeline.

Past State of Working Wisconsin reports have analyzed data from the previous calendar year. “But in this economic crisis, what happened to wages in 2019 is no longer relevant,” says Dresser. “It doesn’t mean anything for looking forward.”

For that reason, the new report pulls the most recent available numbers from the U.S. Bureau of Labor Statistics (BLS). Dresser says the data will be updated month to month and new analyses and other material will be added.

“This is an economic crisis the likes of which almost no one I know has lived through,” she says. “We need to be grappling with what is going on in the economy in the context of this crisis as soon as possible and as much as possible.”