This Recession Is Particularly Harmful To Asian Workers

This recession has brought a lot of suffering for people looking for a new job. This is especially true for many Asian workers. And things could get much worse for these workers, mainly women, as the labor market is slowing amid the accelerating pandemic.

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The Asian unemployment rate has remained above that for White workers throughout the recession. The unemployment rate for Asian workers shot up to a high of 15.0% in May before dropping to 6.7% in November. In comparison, the White unemployment rate rose to 14.2% in April and stood at 5.9% last month. White workers were more likely to have a job when the recession started and those, who became unemployed, were back in a job quicker than was the case for Asian workers.

The situation is even worse for Asian workers than comparisons of unemployment rates by race suggest. Asian workers have the longest unemployment spells of any racial or ethnic group. The average weeks of unemployment for Asian workers stood at 32 weeks in November, compared to 22.9 weeks for White unemployed workers. Asian workers are on average out of job looking for a new one 39.7% longer than their White counterparts. Longer unemployment spells are not new for Asian workers. This time around, there are just a lot more Asian workers without a job than in previous recessions.

The economic pain for all unemployed workers is about to get worse. Congress failed to extend added unemployment insurance benefits beyond the end of July. Now long term unemployment is widespread and on the rise, especially among Asian workers. And Congress has so far failed to extend relief for longer-term unemployed workers beyond December.

The difference in unemployment rates between Asian and White workers is unusual. In the Great Recession from 2007 to 2009, for example, Asian workers, especially Asian women, had one of the smallest increase in unemployment rates, as economist Diane Lim points out.

This trend reversal in about a decade reflects two important factors. First, the Asian community is quickly growing and becoming more diverse, with economically insecure populations growing faster than others. The Asian community is a rich, vibrant and fast growing community, reflected also in its occupational diversity. Some are highly concentrated in management and professional occupations, while some groups disproportionately work in low-wage service sectors. As a result, many groups of Asian families have high levels of poverty. These include Burmese, Bhutanese, Hmong and Malaysians, for example. As the share of economically insecure groups grows within the broader Asian-American community, indicators of economic vulnerability such as unemployment rates will show more widespread economic pain during a recession. After all, people without a lot of wealth and family income have no other option than to stay looking for a hard-to-come-by job in a recession.

Second, this recession hit service industries hard, where Asian workers are concentrated. Asian workers, similar to other people of color, frequently experience labor market discrimination. Occupational steering and outright discrimination on the basis of race and national origin limit Asian workers’ entry into many sectors. Asian workers are concentrated in restaurants and hotels, personal services, household services and health care. Many health care providers lost incomes and cut jobs because doctors’ offices and hospitals had to close during lockdowns and because patients put off elective procedures out of fear of infection. A wide range of low-wage and high-wage sectors, where Asian workers are concentrated, took a hit during the pandemic.

The burden of unemployment has also fallen harder on Asian women than on Asian or White men due to the intersection of racial, ethnic, and gender discrimination. Asian women started with one of the lowest unemployment rates pre-pandemic at 3.0% but experienced the greatest change in unemployment during the recession, peaking at 16.4% in May. The unemployment rate for Asian women was 7.3% in November, well above the 6.2% for Asian and White men. Much of this difference stems from women working more in especially affected industries such as restaurants, hotels, and personal services, but also across the health care spectrum than is the case for Asian men.

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The unemployment gap is especially large among married women. Married Asian women had an unemployment rate in November that was almost twice as high as that of married White women, 7.1% compared to 3.8%.

For much of the pandemic, older Asian women suffered especially large job losses. From March to June 2020, the unemployment rate for Asian women from 55 to 64 years old averaged 15.1%. This rate was higher than for any group of men or other groups of women in those ages. It was also higher than for Asian women 25 to 54 years old. In contrast, the unemployment rate for older White, Black and Latina women was lower than that of younger women during those months. The initial large job losses among older Asian women likely reflected especially large job losses in restaurants, hotels and other services in metro areas, where Asian-Americans tend to be more represented than in other areas.

As the recession lingered, the unemployment rate for younger Asian women, those 25 to 54 years old, eventually exceeded that of older Asian women. While the employment of older Asian women recovered most of its lost ground over the summer and into the fall, from June to November, employment gains were much slower for younger Asian women during that time. As a result, the employment to population ratio of 62.0% for younger Asian women was 5.1 percentage points lower than it was in February 2020. In comparison, the employment to population ratio for older Asian women was 54.2 percent and 3.7 percentage points lower than in February of this year. All Asian women continued to suffer in the slowing labor market recovery, but the slow job gains are especially noticeable among younger Asian women. This likely reflects a slower job recovery in sectors, where younger Asian women work, such as health care and services such as laundries, personal care and household services.

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Unemployment is widespread among Asian workers with often dim prospects for finding a new job. As the labor market recovery is losing steam and could soon end, long-term unemployment, which is more widespread among Asian workers, will continue to wreak havoc on people’s livelihoods. Yet Congress is about to let extended unemployment benefits lapse at the end of December after failing to expand added benefits when they expired in July. Congressional inaction is adding to insult to injury, which impacts many Asian lower-income workers worse than White ones.