Inequality and Workforce Development in Maine in the Post-COVID-19 Environment

Abstract

The COVID-19 pandemic has stricken American workers deeply, causing widespread layoffs and accelerating the longer-term disappearance of jobs available to workers with limited skills and education. As a result, its impact has exacerbated inequalities of income and opportunity. A long-term strategy for postpandemic economic development in Maine will require building bridges from existing skill sets to jobs offering greater employment opportunity and security. Existing research shows that when income and security are addressed as a shared responsibility on the part of workers, employers, and taxpayers, economic growth can expand opportunity and reduce inequality. Maine can take advantage of the COVID-19 crisis to restructure the institutional environment in ways that will align the incentives of the public and private sectors and will achieve these goals. and demographic distribution of deaths from suicide, alcohol abuse, and opioid overdoses, which have been highest among white males in the regions hardest hit by the loss of decent-paying jobs. The pandemic has deepened these trends. According to the Centers for Disease Control, the 12-month period from May 2019 to May 2020 saw the highest number of deaths from drug overdoses ever recorded in a one-year span. The pandemic, however, was not the only factor in this increase; overdose deaths were rising in 2019 as well.1 Still, the COVID-19 pandemic has burdened the most vulnerable members of society with even heavier economic and psychological stress. Low-wage workers compose a large share of the country’s workforce—44 percent as of January 2020—and have been more severely affected by the pandemic than higherearning workers (Escobari et al. 2019).2 Layoffs threaten their security in several ways, including the loss of housing and of health insurance (Garfield et al. 2020). Even before the pandemic, about a quarter of those living in rental housing were paying more than half their gross monthly income on rent. By January 2021, about 20 percent of all renters had fallen behind on their rent payments; 40 percent of children in households that rented faced difficulty with food, housing, or both (CBPP 2021; Dougherty 2021). Approximately 30 million people work in the retail and hospitality fields, almost 20 percent of the total US labor force. Most of those people work at wage levels below the median wage (77 percent in retail, 93 percent in hospitality). These are the most vulnerable jobs: wages are low, health insurance coverage is sparse, and the COVID-19 pandemic has led to heavy job losses. Whereas from January 2020 to January 2021, the unemployment rate rose from 4 percent to 6 percent for all workers, it only rose from 2.5 percent to 3.4 percent for people working in financial services but from 5.9 percent to 15.9 percent for those in leisure and hospitality (US BLS 2021). Low-wage workers are the least likely to be able to switch to online work; their educational levels tend to be low; and they are disproportionately likely to be female, Black, and Hispanic. The COVID crisis, therefore, is dealing a severe, multifaceted blow to the low-wage segment of the workforce. Low-wage workers are not only the most likely to be laid off, they are also the most likely to lose employment-based health insurance or to lack it in the first place. Loss of employment due to the pandemic means that close to 27 million people are at risk of losing their health insurance (Garfield et al. 2020). In principle, a majority of these individuals may become eligible for Medicaid or for marketplace subsidies through the ACA but only in those states that have expanded Medicaid. And a certain share of them will not be eligible for ACA subsidies due to income level or citizenship status. For industries that were already losing jobs, the pandemic has accelerated a painful transition and intensified the harsh social and economic consequences of our high and rising inequality. High inequality in the distribution of economic and social opportunity produces a gradient in health. Research shows that there is a direct relation between socioeconomic status and health, whether measured as the number of healthy days people experience in a month or in terms of their overall health status (Case and Deaton 2020). Health levels vary systematically for all racial and ethnic categories by income and education. This is true of geographic inequality as well. Across the country, the impact of the pandemic has varied systematically by population group, industry, and geography (Bahar 2020). People living in densely populated areas and particularly in multiperson, multigeneration households or congregant living facilities are at greater risk for becoming infected and spreading infection more widely. People working in jobs requiring a high, prolonged, and intensive level of face-to-face contact, such as assembly line manufacturing, food processing, retail sales, and personal care services, are similarly at higher risk. Groups that have been systematically disadvantaged in access to good housing, health care, education, and job opportunities—particularly minority and immigrant groups—are at greater risk from the illness due to higher underlying rates of hypertension, heart disease, diabetes, poor nutrition, and other chronic conditions (Owen et al. 2020). Where these risk factors linked to geography, industry, and demography overlap, clusters of illness develop and spread at especially high rates. Maine and the Economic Impact of COVID-19 In some respects, the COVID pandemic has affected Maine in the same ways it has affected the rest of the country, while in other respects, the impact on Maine is distinctive. In recent decades, the labor market in Maine has been slightly tighter than that of the country as a whole MAINE POLICY REVIEW • Vol. 30, No. 2 • 2021 117 POST-COVID-19 WORKFORCE DEVELOPMENT