Race and the Economic Fallout from COVID-19 in New York City
Irene Lew
New York City, once the epicenter of the coronavirus epidemic in the US, continues to see a steady decline in new COVID-19 cases, related hospitalizations and deaths. Meanwhile COVID-19 infections have spiked in two dozen states, including Texas, Florida and Arizona, all of which reported record numbers of new COVID-19 cases in July. But nearly five months after the start of the coronavirus pandemic, New York City is faring much worse economically than the rest of the country. Between mid-March and mid-July, more than 1.5 million people in New York City filed for unemployment, a staggering number that exceeds the cumulative number of initial claims filed in most states over the same period. In June, the national unemployment rate fell to 11.1 percent but New York City’s rate rose to 20.4 percent. In the Bronx, which has been hit hard by COVID-19, nearly a quarter of residents were out of work in June, the highest unemployment rate of the five boroughs.
Communities of color in the Bronx and elsewhere in New York City have disproportionately shouldered the burden of the economic and public health fallout from COVID-19. Although Black and Latinx New Yorkers make up 51 percent[1] of the population in New York City, they account for two-thirds of confirmed coronavirus cases in New York City and are twice as likely as white New Yorkers to die from COVID-19. Joblessness remains more widespread among communities of color in New York than among people of color nationwide. As of June 2020, citywide unemployment rates are now 21.1 percent among Asian residents, 23.7 percent among Black residents and 22.7 percent among Latinx residents, compared to just 13.9 percent among white New Yorkers.[2] Meanwhile, national unemployment rates for workers of color were seven to eight percentage points lower than among New Yorkers of color: 13.8 percent of Asian workers, 14.5 percent of Latinx workers, and 15.4 percent of Black workers nationwide were unemployed in June.[3]
Data collected between mid-June to early July by the Census Bureau for its weekly Household Pulse Survey provide a more detailed, up-to-date snapshot of the disparate economic impact of the coronavirus on communities of color in New York City.[4] As Congress considers a new relief package, it should extend Federal Pandemic Unemployment Compensation (FPUC), the supplementary $600 in federal unemployment benefits that have already expired in New York State and are set to expire nationwide at the end of this week. In New York City, the end of the extra $600 a week will fall hardest on families of color, who have experienced job loss and hardship at higher rates than white households since the start of the COVID-19 crisis.
New Yorkers of color more were more likely to lose employment income since the start of the pandemic.
New Yorkers were more likely than adults nationwide to live in a household that lost employment income since the start of the pandemic, reflecting the far more severe coronavirus outbreak and the slower economic reopening. But the pain has not been felt equally. Compared to 51 percent of white adults, 56 percent of Black, 58 percent of Asian and 66 percent of Latinx adults in the New York City metro area lived in a household that experienced a loss in employment income since mid-March, when mandatory shutdowns led to widespread business closures in the region.
Figure 1
Asian and Latinx New Yorkers were hit hardest by COVID-related layoffs, reduction in business and widespread business closures.
Pre-pandemic, Latinx and Asian New Yorkers, the majority of them immigrants, were more likely than white New Yorkers to be working in low-wage sectors like personal care, accommodation and food service,[5] precisely the industries hit hardest by widespread COVID-19-related business shutdowns and drastically reduced business volume. While the city has gradually loosened restrictions over the past two months, allowing restaurants to proceed with outdoor dining and for personal care businesses like nail and beauty salons to re-open, many restaurants and other non-essential businesses closed during the pandemic will remain shuttered. Between mid-June and early July, 49 percent of Asian and 41 percent of Latinx adults in the New York City metro area reported that their main reason for not working in the past week was due to a layoff, an employer reduction in business, or their employer closing temporarily or permanently due to the coronavirus, compared to 35 percent of white adults and a third of Black adults who listed these reasons.
Latinx workers were most likely to report being sick with COVID or being concerned about their risk for infection as their main reason for being out of work
Between mid-June and early July, Latinx New Yorkers were three times more likely than white New Yorkers to report that their main reasons for not working in the past week were due to previously being sick with COVID-19, currently being sick with COVID-19, or being concerned with contracting COVID-19 and spreading it to others (see Figure 2). Many Latinx New Yorkers have continued to work onsite for essential businesses throughout the pandemic, making deliveries, cleaning buildings and re-stocking shelves at grocery stores. Since they have frequent interaction with customers and don’t have the luxury of social distancing, they have continued to face the greatest risk for contracting the coronavirus, often working without additional compensation or an adequate supply of personal protective equipment. Overall, 61 percent of Latinx New Yorkers were out of work in the past week due to COVID-19-related reasons, compared to just 39 percent of white New Yorkers.
Figure 2
Financial insecurity was more prevalent among Black and Latinx New Yorkers even before the pandemic hit
Pre-pandemic, Black and Latinx New Yorkers had a much smaller financial buffer than their white counterparts to cushion the blow of job loss, reduced income or unexpected expenses.[6] According to CSS’s 2019 Unheard Third survey, 40 percent of Black New Yorkers and 39 percent of Latinx New Yorkers have zero or less than $500 in emergency savings, compared to only 16 percent of white residents. A third of Black New Yorkers and 45 percent of Latinx New Yorkers said that they worried all or most of the time about having enough income to pay their bills, in contrast to just 17 percent of white New Yorkers who felt this way.[7] (These numbers may not add to the amounts shown in the charts below due to rounding.)
Figure 3 and Figure 4
Compared to people of color nationwide, New Yorkers of color are more likely to turn to unemployment benefits to meet their spending needs
With little to nothing in savings set aside before the pandemic, New Yorkers of color were ill-prepared to weather the wave of job loss triggered by the mandatory shutdown of non-essential businesses in mid-March. In the absence of savings, unemployment benefits have been an important safety net for many New Yorkers, especially those of color. In New York City, a higher proportion of those who lost employment income in their household were able to draw on unemployment benefits to meet critical spending needs. A third of Latinx New Yorkers turned to unemployment benefits to pay for necessities in the past week, in contrast to less than a quarter of Latinx nationwide. Unemployment benefits have been particularly helpful for Asian New Yorkers in paying for necessary expenses—52 percent reported using these benefits in the past seven days, compared to 34 percent of Asians nationwide. A recent Century Foundation analysis found that Asian Americans have utilized unemployment insurance benefits at high levels in New York and other states like California and Washington that were impacted by the earliest COVID-19 outbreaks.
Figure 5
Without FPUC, many New Yorkers of color will lose an important lifeline that is helping them pay the rent and meet other necessary expenses. While detailed data on the racial breakdown of those receiving enhanced federal unemployment benefits is unavailable, the Congressional Budget Office found that, nationwide, 42 percent of those reliant on FPUC in June were non-white.
Food insecurity is more prevalent among Black and Latinx New Yorkers
Prior to the pandemic, data from CSS’s 2019 Unheard Third survey showed that food insecurity was more widespread among Black and Latinx New Yorkers: 36 percent of Black and 45 percent of Latinx New Yorkers experienced a food-related hardship[8] in the past year, more than double the share of white New Yorkers who did. Black and Latinx New Yorkers were also three times more likely than white residents to rely on SNAP benefits to afford food: just 8 percent of white New Yorkers we surveyed in 2019 said that they received SNAP benefits, compared to 27 percent of Black New Yorkers, and a similar share (29 percent) of Latinx New Yorkers.
Overwhelmed by demand, food pantries and soup kitchens are struggling to meet the need of hungry New Yorkers during the pandemic, especially in hard-hit communities of color. Despite an unprecedented expansion of public and private food assistance programs in the city, people of color are more likely than white people to struggle with food insecurity: between mid-June and early July, 18 percent of Black adults and 19 percent of Latinx adults living in the New York City metro area said that their household sometimes or often did not have enough to eat in the last seven days, while just 6 percent of white adults said their household lacked sufficient food. Latinx adults were also five times more likely than white adults to rely on free groceries or a free meal in the last week.
Figure 6
Asian, Black and Latinx tenants were three times more likely to report falling behind on their rent
As we highlighted in a recent post on race and evictions in New York City, Black and Latinx renters are at higher risk than white tenants for losing their housing when New York State’s moratorium on evictions expires on August 20. In the New York City metro area, people of color have disproportionately suffered from COVID-19 related business closures and job loss, which is now threatening their housing stability. As of early July, Asian, Black and Latinx tenants were three to four times more likely than white tenants to report that they had fallen behind on their rent or deferred payment. Asian, Black and Latinx tenants were also two to three times as likely as white tenants to have little to no confidence that they could pay next month’s rent on time. Latinx tenants faced the highest rates of housing instability: more than a third are behind on their rent and nearly half had little to no confidence in their ability to make next month’s rent on time. Compared to renters nationwide, Asian and Latinx tenants in the New York City metro area are at much greater risk for losing their housing. As of early July, only 14 percent of Asian tenants nationwide said that they fell behind on their rent or deferred payment, but the share more than doubles among Asian tenants in New York City. (These numbers may not add to the amounts shown in the charts below due to rounding.)
Figure 7
Figure 8
Recommendations
In the New York City metro area, people of color were hit harder by the economic fallout of COVID-19 than white residents. However, the Census Household Pulse survey data revealed noticeable differences in economic impacts within communities of color. Food insecurity was most prevalent among Black and Latinx New Yorkers. Asians and Latinx New Yorkers were much more likely than Black New Yorkers to be out of work due to concerns about contracting the coronavirus or COVID-19-related business closures, layoffs and reduced business volume. Since Asian New Yorkers were hit hard by reduced business and business shutdowns, they were most likely to draw on unemployment benefits to help meet their spending needs. Housing insecurity is highest among Latinx New Yorkers, who have been disproportionately impacted by income and job loss since the start of this pandemic.
The next Congressional coronavirus relief package should include an extension of FPUC and other critical expansions in unemployment benefits that have helped more than a million New York City residents keep food on the table, pay their rent and meet other needs. In addition to FPUC, the CARES Act created two other unemployment benefit programs that are set to expire at the end of this year: the Pandemic Unemployment Assistance program (PUA), which expanded the pool of workers eligible for unemployment benefits to include those who are gig workers or self-employed, and the Pandemic Emergency Unemployment Compensation (PEUC) program, which provides up to 13 weeks of additional jobless benefits to those who have exhausted their regular state unemployment insurance benefits. These expansions have helped low-wage workers who often do not qualify for regular state unemployment benefits or those who typically receive low benefit levels even when they do qualify. To improve food security, the next relief package should also include an increase in SNAP benefits for all participants. The Families First Coronavirus Response Act signed into law by President Trump in April had included a 40 percent increase in monthly SNAP benefits, but had left out the poorest households.
The extensions of these federal relief measures should be paired with state and local programs to provide direct financial assistance to workers who have been excluded from unemployment benefits and other government relief programs because of their immigration status. New York City and a number of other states and municipalities have created emergency relief funds to support undocumented workers impacted by the pandemic. New York state should consider creating a larger-scale, longer-term state-funded unemployment or wage replacement program to provide weekly payments to undocumented workers who don’t qualify for state unemployment benefits.
To address increased housing insecurity and eviction risk among tenants of color, the state should pass Zellnor Myrie’s Emergency Housing Stability and Tenant Displacement Prevention Act, which would halt residential and commercial eviction and foreclosure proceedings for a year after the state’s emergency declaration is lifted. The state should also pass Brian Kavanaugh’s proposed Housing Access Voucher Program, which would provide emergency rental assistance to individuals and families in homeless shelters and those at risk for becoming homeless due to COVID-19-related loss of income. On the local level, the city should prioritize an immediate expansion of Right to Counsel citywide to provide all low-income tenants facing an eviction in housing court with the right to an attorney. Longer term, the city should expand Right to Counsel to moderate-income tenants as well.
1. CSS analysis of 2018 American Community Survey data from the Census Bureau.
2. CSS analysis of Current Population Survey (CPS) June 2020 data, accessed from IPUMS. Among New York City civilian population in the labor force aged 16 and older. Since the New York City sample in the CPS data is relatively small, the monthly unemployment rates by race and ethnicity have high margins of error associated with them, occasionally causing large fluctuations in monthly rates.
3. Bureau of Labor Statistics, Table A-2. https://www.bls.gov/news.release/empsit.t02.htm and Table A-3. https://www.bls.gov/news.release/empsit.t03.htm
4. New York City refers to the New York City metropolitan area, which also includes parts of Long Island, Lower Hudson Valley, Northern and Central New Jersey, and one county in northeastern Pennsylvania. Unless noted, the Census Bureau’s Household Pulse survey data cited in this piece is based on a pooled four-week sample from weeks 7 through 10 (June 11 to July 7, 2020). Due to the small sample size for the New York City metro area, data was pooled over four weeks to get a larger sample for analysis.
5. In 2018, 12 percent of Asian adult New Yorkers and the same share of Latinx adult New Yorkers worked in accommodation and food service, triple the share of white New Yorkers (4 percent). Latinx residents made up 42 percent of New Yorkers employed in accommodation and food service, and 37 percent of those in personal care industries. Based on a CSS analysis of 2014-18 Five-Year American Community Survey data.
6. The Report on the Economic Well-Being of U.S. Households published by the Federal Reserve describes the difficulties experienced in dealing with a $400 unforeseen emergency by 37 percent of households nationwide.
7. The Unheard Third is a scientific telephone survey designed by Community Service Society in collaboration with Lake Research Partners who administer it using Random Digit Dialing and professional interviewers. In 2019, 1,829 New York City residents were reached by cell phones and landlines from June 18 to July 20. Interviews were conducted in English, Spanish and Chinese. The margin of error for the entire survey is +/- 2.29 percentage points and +/- 2.97 percentage points for the low-income component.
8. Food-related hardships include going hungry, skipping meals, receiving free meals from family or friends or receiving food from a pantry or soup kitchen.