Economists project post-pandemic boom may not benefit hardest hit demographics

The United States economy is projected to begin recovering in the spring, though female- and minority-led industries may recover slower, UCLA economists said.

A National Women’s Law Center January analysis of the Bureau of Labor Statistics’ monthly job report showed that in December, women lost 156,000 jobs, comprising 100% of U.S. net job loss. The U.S. lost 140,000 net jobs in December, with men gaining 16,000 jobs, according to the NWLC.

The highest loss of employment came from industries that have high rates of female employment, such as the hospitality, education and civil service sectors, said Leo Feler, a senior economist for the UCLA Anderson Forecast, a monthly economic outlook.

Unlike the 2008 Great Recession, which hurt male-dominated industries, such as manufacturing and construction, Feler said.

Feler said he believes industries that employ more women and minorities may not fully recover because demand will not bounce back to pre-pandemic levels, even after mass vaccination.

“It is going to be very difficult for you to generate the demand that (was) previously seen in central business districts, for restaurants, for hospitality, for leisure, and so because of that some of these jobs just might not come back,” Feler said.

In the forecast, Feler and Martha Olney, an economics professor at UC Berkeley, predicted the economy will recover rapidly from this recession, comparing the upcoming surge to the 1920s. Olney said in the forecast that just as the creation of repayment plans facilitated spending in the 1920s, shifting demand will also stimulate the economy in the 2020s.

Since then, Olney said the U.S. has implemented measures, like banking reforms, to prevent a repeat of the 1930s economic collapse that followed this burst in spending.

However, Leila Bengali, an economist for the UCLA Anderson Forecast, said in an interview that the comparison to the 1920s should not be taken too literally.

“I don’t want to draw too many parallels because, you know, after the 1920s came the 1930s, which was a very big depression,” Bengali said. “It’s almost like the reverse in this case; we’re talking about a pretty big economic decline followed by a higher period of growth.”

Bengali said pent-up demand – from doctor visits to trips to the salon – will contribute to the predicted gross domestic product growth.

But while the forecast projects the GDP will grow by around 3.9% in 2021, California tends to have higher unemployment rates compared to the rest of the U.S., Bengali said. California had a 9% unemployment rate in December, compared to a 6.7% national unemployment rate.

While economists are optimistic about national and regional economies, some demographics may not benefit from the recovery, Feler said.

Women of color were disproportionately affected by rising unemployment caused by the pandemic, said Gbenga Ajilore, a senior economist at the Center for American Progress, in the November/December UCLA Anderson Forecast.

Compared to a national unemployment rate of 6.7%, Latina women had a 9.1% unemployment rate and Black women had an 8.4% unemployment rate, according to the BLS. In the November/December forecast, Ajilore said a lack of child care infrastructure has only worsened conditions for working women.

However, even if female-led industries recover, Till von Wachter, an economics professor at UCLA and faculty director of the California Policy Lab, said he warns that even if women can reintegrate into the workforce, it may not improve their working conditions.

“Many of these women had extremely low earnings, and so one thing to keep in mind is that the status quo we’re going back to, for many of these workers, wasn’t a particularly great status quo,” von Wachter said.