Household Experiences: Employment and Income Loss

Earlier in the pandemic, we explored unemployment data at the state and national level and explained some of the limitations of the data. When we published that post in mid-May, there were over 1.3 million Michiganders receiving unemployment insurance. Recently, the US Department of Labor reported over half a million Michigan residents are still receiving unemployment insurance. However, there was an increase in new claims, indicating that there might be a new surge of unemployment as businesses continue to manage the financial impact of the pandemic.  

While the unemployment rates and unemployment insurance data highlight critical trends in employment during the pandemic, they don’t help explain who is underemployed, losing income, or losing their jobs. The Census Bureau’s Household Pulse survey is an experimental data collection process to help understand in closer-to-real-time how the pandemic is impacting different aspects of life for American households. With this survey, we can begin to understand the impact of income loss on Americans and Metro Detroit residents.

This data is from Week 8 of the surveying and was sampled June 18-23.  It is reported for the Detroit-Warren-Dearborn Metropolitan Statistical Area (Detroit MSA).

What Industry are People Employed in?

Before digging into employment income loss, it’s important to understand the employment landscape in the Detroit MSA compared to the rest of the state and country. To do so, we broke down some of the most common occupation categories for the Detroit MSA earlier this year in an initial look at the unemployment situation in Michigan. There, we identified two of the hardest hit industries – production and food service, accounting for about 14% of the Detroit MSA’s workforce.

In this Household Pulse survey, the data is aggregated to types of employers. About 47% of Detroit MSA respondents reported being employed, which is similar to the Michigan rate, and slightly lower than the national rate of 54%. While this is slightly alarming, the survey is not asking about unemployment or previous employment in this question—only what industry a respondent worked in during the last seven days, and some individuals report not working because they are retired or disabled, as we’ll see later.

In the Detroit MSA, the bulk of the economy is in private companies, at a rate almost 10% higher than the national average and 5% higher than the state. On the other hand, almost 10% of respondents work in family businesses or are self employed.  This is lower than the national rate of self-employment. The Detroit MSA also has lower rates of government employees (10.1% vs. 15.1%) and non profit employees (7.8% vs. 9.2%) than the overall rate in the United States.

Why Are People Not Working?

Over 50% of respondents reported not working in the last 7 days. When asked why they were not employed, about a third of respondents said they are either retired or disabled. Another small percentage reported that they were caring for elderly (1.7%) or did not want to be employed (8.4%). Direct impacts of the coronavirus pandemic on household employment or health account for most of the remaining respondents who reported not working in the last 7 days.

About a quarter of respondents reported that their lack of employment stemmed from their employer cutting their hours or position, or temporarily closing. Almost 9% of respondents said they were caring for children who did not have school or daycare.  While this number probably includes voluntary stay at home parents, it is likely higher than average due to the closure of many daycare centers and lack of childcare options.  Understanding the number of people who have exited the workforce due to the impact of coronavirus on childcare availability would help us understand how to better engage this part of the potential workforce.

Lastly, from a health perspective, 5% of respondents who did not work were sick or caring for someone with coronavirus symptoms. Another 5% were concerned about getting or spreading coronavirus. While the coronavirus is life-threatening and requires at minimum a 14-day quarantine period, only 1.3% of respondents reported that they used paid leave. About 3.8% of respondents said they received full pay, but did not utilize their leave. However, the vast majority of respondents (87.1%) said they received no pay. It’s unclear based on the Pulse Survey data what percentage of people not working are normally not part of the workforce, so conclusions to be drawn are fairly limited.

As restrictions on the economy continue to ease up and especially with schools in Detroit opening for summer school, understanding the impact of coronavirus on childcare and the mental health of Detroit residents will be imperative to supporting households through the pandemic crisis.

Where is Employment Income Loss Greatest?

Overall, there is a higher rate of income loss in the Detroit MSA compared to the US and Michigan. However, Detroit MSA residents have a similar rate of expected loss of income over the next few months. While 58.2% seems like a very high percentage of Detroit residents experiencing income loss, consider 58.6% employees in the country work in hourly wage positions as of 2018.   

While not every hourly employee suffered income loss, there were significant salary cuts at many Detroit-based companies like General Motors, where engineers’ salaries were cut significantly, and local hospitals like Henry Ford Hospital where layoffs and salary cuts both occurred. 

These estimates are also fairly consistent with other surveying completed by the Urban Institute, which indicated that 43.4% of adults surveyed reported job or income loss in their household.

Who is most likely to face employment income loss?

Minority households, those with low educational attainment, young households, families with children, and low-to-middle income respondents were most likely to report income loss or expected income loss in their households.  

While gender did not impact experienced income loss significantly, minority respondents are much more likely to experience loss of income or to expect income loss in future weeks in their households. This income loss exists despite there being very small differences in the number of respondents who reported being employed in the last 7 days.

While the disparity in income loss is a lot (around 7-10%) for white households compared to minority groups, the disparity grows significantly for expected loss. Only 22.2% of white households expect there to be income loss in the next four weeks compared to 54.9% of Hipsanic households and 41.4% of Black households. This could indicate that white respondents are in more stable employment solutions that are being less impacted as the total shutdown of the state’s economy has been relaxed.

Similar to reports of food insufficiency and online education access issues, respondents with less than a high school education report much higher rates of employment income loss (83.2%) and future potential loss (55.8%). These rates are significantly higher than the MSA as a whole.  So similarly targeted resources to census tracts with larger proportions of adults who did not complete high school could provide a larger impact.

Only about a quarter of the 18-24 year old respondents reported being employed in the last 7 days. Young adults (18-24 year olds) in the Detroit MSA report the highest rate of experiencing employment income loss (88.8%) and future income loss (42.6%). The BLS report found that while young adults under 25 consist of 1 in 5 hourly workers, they make up 40% of minimum wage. 

Households with children also report higher losses in employment income. Almost 70% of households with children report employment income loss and nearly 37% are concerned about future income loss compared to households without children (51% and 25% respectively). As we detailed in our post about education transitions during the beginning of the pandemic, the switch to distance learning impacted the time parents and guardians had to help their children learn. The employment income loss and expected income loss. 

Our State of the Detroit Child portal can help examine communities throughout the Detroit MSA to determine which areas and communities have the highest rates of people impacted the greatest by the pandemic.

Do you have additional questions about the data surrounding employment or other changes that have been brought on by the COVID-19 pandemic? Just AskD3! We are committed to thoroughly answer all of your data-driven questions during this uncertain time.