New Steady data shows another way Black Americans are paying the steepest price during COVID-19
Of Steady’s emergency cash grant recipients, nearly half the people who have lost the majority of their income are African-American.
From the time COVID-19 struck, there have been numerous warnings that the economic fallout would hit African-Americans the hardest. Unemployment among Blacks was already much higher than for other racial groups, and that difference remains, with the latest figures from the Bureau of Labor Statistics placing unemployment more than five percentage points higher among Blacks than among whites.
That’s just one of many measures that highlight the disparities. McKinsey reported that Black Americans are “almost twice as likely to live in the counties at highest risk of health and economic disruption.” They’re also on average about 30% “likelier to have health conditions that exacerbate the effects of COVID-19.” And they’re “overrepresented in nine of the ten lowest-paid, high-contact essential services, which elevates their risk of contracting the virus… Black workers are putting their lives and health on the line to provide goods and services that matter to our society.”
As a Bloomberg headline put it, “COVID is hurting Black Americans more in almost every way.”
Now, new data from my company, Steady, shows how this economic disaster is playing out in the lives of hundreds of thousands of people across all 50 states. Our large data set provides unique insight into the realities of workers in today’s economy, in which millions of people have hourly or gig work, and nearly half the workers in the country have a “side hustle.”
Data from Steady Together
At Steady, our goal is to help people find paid work, increase their income and plan a financially stable future. In April, Shaquille O’Neal and I announced the creation of Steady Together, a new targeted initiative to help workers find high demand jobs quickly, earn cash grants, and have access to telehealth medical support during COVID-19. Shaq, a Steady advisor, shared his own stories from his childhood in discussing the importance of this initiative.
It was in determining grant recipients that the team at Steady found big racial disparities.
A large portion of our 2 million members give us access to their bank accounts so we can track their income, see trends, and help our members find solutions. Of this cohort, approximately 23% is African-American.
To select recipients for grants, we looked to see who was being hardest hit financially during the pandemic. We started by narrowing down the cohort to people who got much of their income from industries that have been most heavily impacted, including food services, hospitality, retail, and gig work such as ridesharing. (For more on these and other industries, see my interview with Bloomberg Law.)
Within this group, we then looked to see who had lost more than 50% of their income to determine recipients of our emergency cash grants. We found that of the people who met this criteria, 46.5% are African-American. In short, nearly half the people in this data set who have lost the majority of their income are Black.
There are numerous reasons for this disparity. For example, while African-Americans make up about 13% of the population, they’re about 27% of the gig workforce, according to a study by Edison Research and Marketplace. Black workers are therefore even more likely to be without stable, continuous income and a plannable schedule.
The ongoing protests over the killings of innocent African-Americans by police also serve as a powerful reminder that racism is systemic and widespread, creating all sorts of problems, including economic disparities and inequality.
The role of unemployment benefits
There’s also a role being played in unemployment benefits during the pandemic. When we look at our entire cohort, we find that 18% of total income is coming from unemployment insurance payments.
Studies have shown that Black workers receive less in unemployment than white workers on average. “Overall, the states with more Black workers have less generous unemployment benefits,” Kathryn A. Edwards, associate economist at the Pardee RAND Graduate School, explained in a blog post this month. And it’s not just the size of unemployment checks that differ. “Black workers are less likely than white workers to receive unemployment at all, a difference that cannot be explained by education or prior job tenure.”
The Urban Institute found that this was also the case during the Great Recession, and was “an especially adverse outcome given that African Americans likely have fewer assets to fall back on.”
Through my work in recent months, I’ve seen that some states with higher African-American populations are doing a particularly bad job of getting employment checks out to people who are supposed to receive them.
As more and more Americans turn to hourly and gig jobs to try to build a steady flow of income, racial differences must be addressed. For there to be a successful, functioning economy, everyone needs an equal shot. When government and business leaders take steps to alleviate the current suffering, they need to take a close look at the inordinate impact on Black workers — and ensure that any solutions help create a more level playing field.
