Job Losses Among Low-Income Households – Lee Chandler

Thirty-nine percent of employed individuals who make a household income of less than
$40,000 were temporarily laid off or lost their jobs as the pandemic hit. The unemployment rate
has reached a historic high since the Great Depression in April, rising to 14.7%. One of the main
driving forces of this is the increasing irrelevance of jobs that most low-income people perform,
which ends up widening the gap between high income and low-income families.
Picture this: you’re eating at multiple Michelin star restaurants every day, hiring personal
chauffeurs to travel around the city and house cleaners to regularly keep your mansion spotless,
and staying at luxurious hotels for multiple nights on end. You are now at the top of the
socioeconomic pyramid; your wishes are made by people who are willing to meet your demands.
However, let’s take a step back; who are the people who are diligently serving you, and how
much are they making? Furthermore, can their jobs be easily replaced by automated technology?
Especially in today’s world, technology drives everything. Even before the pandemic, the
fear that advanced technology will replace the jobs of low-income individuals was already
prevalent. Now that social distancing is put in place, the increasing telepresence among work
environments has made offices become desolate. While numerous Wall Street and City of
London financial services firms are beginning to realize that a hybrid work lifestyle is needed
sooner rather than later, many high-income families are currently using this time to move to
suburbs or rural areas where they can not only save on their cost of living, but they also have
home offices––some that are even bigger than one in their actual office building. This negatively
impacts lower-income individuals who work for businesses in the business travel
industry––including hotels, restaurants, and transportation services––because they will have no
revenue stream, and thus, lose their job. Additionally, the increased adoption of innovative
technology in warehouses and factories threatens low-income communities whose labor can be
swiftly replaced by these robots. The economy has stopped the creation of jobs for
undereducated, low-wage workers due to the fact that these machines increase productivity and
lower labor cost––and now more than ever, they protect individuals from potentially contracting
the virus.
While technology has been one of the major factors that have helped our economy
continue to function, low-income individuals are unable to cope with this disruption. New
technology replacing human labor may seem beneficial in the long run, but in the short run, these
underprivileged communities continue to suffer greatly.
References:
https://www.wsj.com/articles/covid-19-is-dividing-the-american-worker-11598068859
https://www.cnbc.com/2020/05/14/40percent-of-low-income-americans-lost-their-jobs-in-marchaccording-to-fed.html

The article was written by Clara Yang
https://www.linkedin.com/in/claraiyang/

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