Economic and Workforce Impact of COVID-19 Insights from:
Overview
Skills for Chicagoland’s Future is a nonprofit organization that was founded during the Great Recession, to partner with employers to get the unemployed and underemployed back to work.
As a data driven organization, we start and end our work by looking at data to inform our decision making and create programmatic projections based on the needs in the market. Additionally, as a collaborative member of the workforce community, we are happy to share the data we have accumulated from reliable sources, as well as models we have built. Our goal is for this information to create a wider understanding of the significance of this unprecedented moment on unemployed individuals.
We are committed to regularly updating this data and adding new information sources to it. If you have any questions please click here.
COVID-19'S IMPACT ON UNEMPLOYMENT
COVID-19'S IMPACT ON EMPLOYMENT AND JOBS
A decade of job gains lost in a matter of weeks
Post the end of Great Recession, the U.S. economy created 22 million jobs.
In just 5 weeks the U.S. economy lost 26 million jobs.
Source: BLS, Dept. of Labor, Hover Analytics, Deutsche Bank Research
42% of pandemic related layoffs are estimated to be permanent, which equates to 11.6 million jobs.
Source: University of Chicago and BLS
The unemployment-population ratio, the lowest since tracking started in 1948.
Have had both their historic highs and historic lows of unemployment rates in 2020, including IL.
Employment Rate
- Employment Population Ratio is down 7% from the same time last year
- Lowest Ratio on record was in April at 51.3
- Prior to 2020 the lowest was in 1949
IL workers hit with joblessness
From February - May 9th, IL unemployment dropped 19% to below 50%
Previous low 58% during the Great Recession.
Since January 2020 Chicago's employment rate has decreased by 5.9%
- -28.7% Employment rate change for low wage workers ($<27k)
- +1.4% Employment rate change for middle wage workers ($27k-$60k)
- -3.3% Employment rate change for high wage workers ($>60k)
Source (9/23/20): Opportunity Insights
Chicago's Frontline and Vulnerable Jobs
71.6% of frontline jobs are held by people of color in Chicago; nationally, black workers make up 17% of the frontline workforce
Where in Chicago Low-Income Jobs are being Lost
Top 5 Industries with Low-Income Jobs Lost
- Accommodation and Food Services (120,141)
- Retail Trade (36,954)
- Arts, Entertainment and Recreation (30,993)
- Administrative and Support and Waste Management and Remediation Services (30,645)
- Health Care and Social Assistance (26,816)
Date: 5/8/2020, Source: Urban Institute
Most Severe Impact on Chicago's South and West Side Neighborhoods
The neighborhoods that have the highest proportion of essential workers with increased health risks are the same neighborhoods that have the highest proportion of workers facing economic risks of continued unemployment and underemployment. These neighborhoods are predominantly on the west side, but there are also high concentrations of at-risk workers on the northwest and south sides of the city.
Workers in labor and customer service occupations are most heavily concentrated on the west side. These workers are more likely to be uninsured than citywide averages, have lower median incomes, and face both health and economic risks due to COVID-19.
Date: 6/23/2020, Source: Urban Labs
COVID-19'S IMPACT ON CONSUMER SPENDING
Consumer Spending and Optimism
34% of Americans believe the economy will rebound within two to three months (down 10% from March 16th)
COVID's Impact on Consumer Confidence in Chicago
Date: 6/17/2020: Source: Chetty, Freidman, Hendren, Stepner, and the OI Team
COVID-19'S IMPACT ON POPULATION SEGMENTS
The Recently Unemployed due to COVID-19
Job Loss Variances
- Workers without bachelor's degrees are twice as likely to hold vulnerable jobs
- April Unemployment Rate: 21.2% for individuals with less than a HS diploma
- Minorities are more likely to hold vulnerable jobs, especially in large cities
- 25% of the newly unemployed are racial minorities
- White workers are 37% more likely to hold WFH jobs
- Younger workers are 35% more likely to hold vulnerable jobs
- April unemployment rate: 32% for teens
- Women sustained most of the initial job losses, 59% female
- April unemployment rate: 16.2% Female I 13% Male
Individuals in Illinois Most Impacted
The Economic Fallout of COVID-19 has Hit Low-Income Households Harder
Almost 40%
of households earning less than $40,000 a year experienced at least one job loss in March
About 1/3
of households who have lost a job or had their hours cut cannot cover their expenses for the month
Date: May 14, 2020, Source: Federal Reserve, Wall Street Journal
COVID-19'S IMPACT ON LABOR DEMAND
How the Hiring Rate has Changed
National Labor Demand Based on Job Postings
The labor market collapsed at the same time across the U.S. irrespective of the early spread of the virus or the timing of state-level policies imposed.
30% Decline
in online job postings
>50%
Decline in non-essential retail job postings
Chicago's Job Postings
23% Decline
LOOKING AHEAD BASED ON THE CURRENT STATUS AND IMPACT OF COVID-19
The Anticipated Reemergence of Industries and Sectors
The Wave of Unemployed in Illinois
Based on the above data, projected unemployment claims, and labor market trends, below is Skills' projection of the impact to Illinois' labor force. The amount of unemployed in need far exceed the capacity of the workforce system and anticipated job demand.
