Recession Led by Services Sector Is Particularly Painful for Latino Workers

Recovery for in-person occupations heavily populated by Hispanics likely to be slow amid ongoing pandemic, economists say

By Harriet Torry of The WSJ. Excerpts:

"Prior downturns were largely led by lower spending on such things as cars, houses, and factories while this one is hitting the service industries. That change has meant Latino and Hispanic workers are being particularly hard hit, and economists expect the jobs recovery to be slow and halting as Covid-19 cases accelerate around the country."

"Hispanic or Latino workers last year made up 17.6% of the total workforce but accounted for about half of all maids and housekeeping cleaners, painters and roofers, according to the Labor Department.

Services sectors shed jobs in droves in April as coronavirus quarantine orders shut down swaths of the economy. In June, the jobless rate for workers of Hispanic or Latino ethnicity was a seasonally adjusted 14.5%, more than three times its rate at the start of the year."

"Restaurant owners say they have little sense of when and how consumers will feel safe to eat out again. Latinos make up more than a third of cooks and dining-room attendants, according to the Labor Department.

“This is a supply shock, in the sense that restaurants are no longer able to supply a meal that carries no health risks as they once were able to, as opposed to a demand shock in the sense of a reduction in purchasing power,” said Harvard University economist Raj Chetty during a recent online discussion of research documenting the real-time impacts of Covid-19.

High-income households have cut spending more than middle- and low-income Americans, mostly on in-person services like restaurants and entertainment, according to an analysis of credit- and debit-card data by the nonpartisan research group Opportunity Insights."