The Coronavirus pandemic has hit low-income Black and Latino Americans harder than other groups and, as a result, the income divide in the U.S. will likely rise, according to a new report.
The report released July 23 by Deloitte, states before the coronavirus pandemic and the related recession, Black and Hispanic Americans were more likely to work low-wage positions, lack private health insurance, and have higher poverty rates than non-Latino Whites and Asian Americans. The coronavirus has only made those divides larger.
A lack of healthcare and income will lead to an increase in income inequality, especially in minority communities. According to the report, income and wealth inequality in the U.S. has risen since the early 1970s and was showing signs of growing before the coronavirus hit the U.S.
Since 1990, the proportion of wealth held by those in the top 10 percent of household income has risen from 60.8 percent to 70.0 percent. However, that’s nothing compared with the top one percent.The wealth owned by just the top one percent of income earners has gone up from 17.2 percent to 26 percent. In short, more than a quarter of the country’s wealth is in the hands of the top one percent.
The study also showed occupation largely influences income inequality between races and ethnic groups. Deloitte categorized 22 broad occupations into three wage groups—low-wage, medium-wage, and high-wage—based on mean nominal wages in 2018.
Low-wage occupations, including office and administration positions, transportation and material moving, ground cleaning, and maintenance are overwhelmingly worked by Black and Latino Americans. 50.4 percent of Black Americans work in low-wage positions; that number rises to 51.1 percent for Latino Americans. The percentage of White and Asians working low-wage positions is below 40 for both races.
When it comes to high-wage positions–that is jobs in architecture, engineering, computers, and math–47.3 percent of Asian Americans and 31.3 percent of White Americans fill those positions compared to 25 percent of Blacks (22.8) and Latino Americans (17.0).
Recessions typically make these numbers worse due to wage and position cuts during a recession. The median income for Black-headed households fell by 10% from 2007 through 2010, during which the last recession took place. That number is higher than Latino (-7.5%), Asian (-7.6%), and White (5.7%) Americans.
Making things worse, economic recoveries don’t necessarily make things better. During the economic expansion between 2010 and 2018, the gains in real median household income for Black householders were lower than the gains for householders in the other three racial groups.
Almost immediately after the pandemic started in March, many said low-wage workers and minorities would be disproportionately affected. Between using public transportation to travel to work, working positions that do not allow for social distancing, interacting with strangers, and a lack of healthcare, low-wage workers, which mostly consist of Black and Latino Americans, are more likely to be infected and killed by the virus.
The recession will likely also impact education at all levels including the ability for children of low-wage workers to go to college. Many college-aged children will have to forgo a higher education to help their families make it through the pandemic.
Minority children will be more likely to fall behind due to remote learning while medium- and high-income families have better internet and resources to deal with remote learning and can hire personal tutors.