Accelerate Recovery, Three Months In: Inequitable Impact and the Education Alignment Imperative

Tuesday, June 16, 2020
Kelly Van Beveren
Senior Associate

Three months into the coronavirus pandemic, millions of Americans—particularly people of color and low-income individuals—are still struggling, even as the economic freefall has begun to show signs of slowing. New data showed that the national unemployment rate unexpectedly dropped to 13.3 percent in May from 14.7 percent in April. Earlier in June, unemployment claims also dipped below two million for the first time since the coronavirus pandemic began wreaking havoc on the economy in March. Double-digit unemployment overall and 1.5 million claims in a single week are still painfully high numbers, but the gradual stabilization of the economy means we need to focus on recovery.

As we take stock of where the economy is right now and continue to build strategies to accelerate an equitable recovery, here are a few top-line trends to bear in mind.

People of color continue to feel a disproportionately heavy economic impact.  

As protests for racial justice and equity sweep the nation, it’s important to remember that people of color have been the hardest hit by the pandemic – both from a health perspective and in terms of economic impact. Non-white employees were overrepresented in the losses of non-essential jobs hit first and hardest by the economic downturn. Weekly surveys by the Strada Education Network found that from the start of the pandemic, people of color were more likely to have lost income, had reduced hours, or be laid off.

As the economic crisis deepened, gaps in impact continued to widen. Data from a U.S. Census Bureau Household Pulse survey in late May showed that 56 percent of Black adults have experienced a loss of employment income in their households, compared with just 43 percent of White adults. Even the newest numbers, which appear to be encouraging, mask discrepancies in recovery; although the national unemployment rate dropped in May, a closer look reveals that White unemployment dipped to 12.4 percent while it increased to 16.8 percent for Black Americans. The impact of the pandemic has not been felt equally, and so the strategies for recovery will need to be focused on providing needed resources and training to those who have been hardest hit.

A shifted labor market means a greater need for adult education and training.

The labor market that will emerge after the pandemic will not be the same one as before. Recessions prompt enormous shifts in industry, from altered consumer behavior to accelerated trends in automation that replace labor. A recession tied to a global health crisis is likely to be even more transformative for many industries as significant physical restrictions and concerns remain in place. Consequently, many displaced workers will find that they need new skills or credentials to be competitive in the new and emerging job market. Early indications are that many of these individuals are likely to seek quicker routes to new skills; Strada survey data showed that a majority of the adults planning to enroll in education or training in the next six months prefer non-degree credentials. It will be incumbent on institutions to ensure that their shorter-term offerings are of high quality and intentionally aligned with new and evolving labor market demands.

The transition to postsecondary education for high school graduates is more important than ever.

Although the economic impact of the pandemic has been felt across the board, those with more education have fared much better than those with just a high school diploma or less. In May, the unemployment rate for individuals with a bachelor’s degree or higher was 7.2 percent, compared with 12.9 percent for individuals with some college coursework and 15 percent for high school graduates. In addition to supporting adults who need to return for more education or training, it’s critically important to keep high school students on track to pursue higher education in order to equip them for success in a challenging job market. Yet the financial impact on families combined with uncertainties surrounding what higher education will look like in the fall have caused many students to alter their plans. Students of color are more likely to have changed or canceled their postsecondary plans than their white peers, a dangerous trend that is almost certain to exacerbate existing gaps in postsecondary attainment if left unchecked. Economic recessions put the advantages of more education – and the disparities in who possesses more education – into particularly sharp relief. If high school graduates fail to successfully transition to higher education, as many risk doing this summer, the long-term ramifications are devastating.

Despite some early signs of turnaround, economists are warning that the road to recovery will be a long one. To ensure a successful recovery, we need clearly-articulated, high-quality pathways that begin in high school and continue through higher education, culminating in credentials with real labor market value. The economic state of affairs in June reinforces the fact that we must prioritize equipping both youth and adults – particularly individuals of color – with high-value education and training in order to set a course for success.