by StreetWise Partners

October 22nd, 2021


Job loss during the COVID-19 pandemic was catastrophic, but gradual reopenings across the country signal hope for a sustained recovery. Experts ask: for whom?


Since the initial loss of 22 million jobs in the first two months of the crisis, the U.S. economy is still down 7 million jobs, long-term unemployment is up, and many workers and families continue to struggle. A recent Brookings study found that low-wage workers were hit the hardest by the pandemic with the closure of restaurants, hotels, retail business and travel — displaced from jobs that are built on face-to-face interaction, which suddenly threatened employees and customers alike.


Much of the displaced low-wage workforce was in an economically precarious position before the pandemic, earning only $10.40 per hour (equivalent to $22,000 annually if working full time). Compared to the mid/high-wage workforce, this group tends to be younger, more racially and ethnically diverse, and has completed less formal education.


As a result, low-wage workers face unique barriers for reentry into the workforce as employers look to hire again. Their decision must take into consideration limited child care availability, greater risk of COVID-19 infection, and, fundamentally, a return to jobs that don’t pay enough to make ends meet (and never did). 


The fact is: there are not enough jobs paying decent wages for people without college degrees (who make up the majority of the workforce) to escape low-wage work. COVID-19 has shown us that low-wage workers cannot be coaxed back into the labor market simply for the sake of employment — and this shortage could be permanent. 


This potential “great reassessment” is causing workers to reevaluate their jobs and seek new careers. McKinsey & Company predicts that as a result of the pandemic, “more than half of displaced low-wage workers may need to shift to occupations in higher wage brackets that require different skills to remain employed.”


In response, the government is considering $80 billion in funding for workforce development in the form of education and training. But without additional job search resources, and without changes in exclusive hiring practices, workers will lack the necessary information and networks to successfully transition to higher paying jobs


According to Tom Dawson, interim CEO and president of ​​Strada Education Network, “What workers need are better wayfinding tools — resources like coaching and insights to help guide workers and students along their path, and personalized approaches, like last-mile training programs and apprenticeships, that make the most of the skills workers already bring to the table. These remove friction from the matching process by identifying the most efficient and cost-effective way to get individuals to the job they aspire to have.”


The dust may have been shaken from storefronts, but the labor market is still unsettled. We must seize this moment to funnel resources that will uplift displaced low-wage workers and make real progress towards a more inclusive economy.

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