Less-educated Asian Americans among hardest hit by job losses during pandemic
In May, Kang Vanchiasong lost her job on the assembly line of a medical device company in Georgia. To make ends meet, she started selling lemongrass from her farm in Jefferson and decided to sell it on Amazon (AMZN) after the local farmers market closed due to the pandemic.
Vanchiasong, a Lao immigrant who moved to the United States 45 years ago, represents one of the communities hardest hit by the pandemic: Asian Americans with just a high school education.
"Those who are out of work right now, I don't know what else to do," Vanchiasong, 63, told Yahoo Finance. "I have my farm, so I survived on it."
A recent study by the Federal Reserve Bank of Chicago finds that 77% of Asian men and 56% of Asian women with a high school degree or less were employed prior to the pandemic.
In the depths of the crisis, employment in these subgroups fell to 46% and 32% respectively - worse than in other groups when the same level of education was controlled.
Using microdata from the latest Census Bureau population survey, the Chicago Fed found that Asian men and women without college degrees suffered the worst job losses in the pandemic. (Photo credit: David Foster / Yahoo Finance)
"There are big differences between groups, including all minority groups, but the group that was hardest hit in the immediate aftermath of the pandemic are Asian Americans with no college education," Luojia Hu, senior Chicago Fed economist, told Yahoo Finance.
For workers like Vanchiasong, questions arise as to why the Asian-American community is so badly affected - and what the consequences are for years to come.
Reduction of Asian unemployment
The unemployment rate for Asian Americans was 8.9% in September, worse than the white unemployment rate of 7% but better than the black and Hispanic unemployment rate of 12.1% and 10.3%, respectively.
But as research by the Chicago Fed shows, the overall unemployment rate for Asian Americans may mask the economic impact on low-skilled, less-educated workers.
Kang Vanchiasong works on her farm in Jefferson, Georgia. Photo: Zepha Gerber
A report by consulting firm McKinsey finds that Asian Americans have the highest intra-group income inequality in the country - the top 10% of the workforce earn 10.7 times the income of the bottom 10%.
"Often the narrative comes back: we don't have to worry about Asians, they are really great, they all go to Ivy League schools," McKinsey partner Emily Yueh told Yahoo Finance, adding that the Asian American community none is monolith.
The McKinsey report adds that Southeast Asian and Pacific islanders are less likely to graduate from high school and tend to suffer from higher unemployment rates than East Asians.
In a report by the consulting firm McKinsey, data from the US Census Office (1-year estimates from the American Community Survey 2018) is used to describe demographic differences between various Asian American subgroups. (Image credit: McKinsey)
At first glance, one might conclude that the severe job losses in the pandemic may have something to do with high Asian employment in sociable settings such as restaurants, the heart of many Asian communities, and a major employer for lower-educated workers.
However, the Chicago Fed researchers still observed the big differences even when they controlled the crew and industry, suggesting that other forces are at play.
Another explanation could be the significant decline in business activity in Asian communities. Memories of the SARS virus in 2002 and fears of xenophobia resulted in communities like Chinatown in New York City closing before statewide shutdowns began.
Retraining of jobs
Federal Reserve Chairman Jay Powell has warned that "long periods of unemployment can damage or end workers' careers as their skills deteriorate."
With small businesses closing their doors for good, there is concern that less educated workers will find a steeper path to new jobs - even if a vaccine arrives.
People in masks walk past a closed store in the Chinatown neighborhood of Manhattan during the coronavirus outbreak in New York City, New York, United States, March 18, 2020. REUTERS / Mike Segar
The Chinatown Manpower Project, a not-for-profit based in New York City, offers English classes and professional training courses with an emphasis on helping new immigrants and low-income workers.
Since the outbreak of the pandemic, CMP has shifted its job retraining resources to helping unemployed people apply for unemployment insurance. Hong Lee, executive director of CMP, said he hoped the workers could get back to work.
CMP hosted a virtual job fair on September 24th, which included recruitment for low-skilled work, and attracted approximately 350 attendees and 16 employers after about 500 people and 35 employers attended the job fair in the past.
“They are slowly seeping in [back to jobs], but not as much as the other way around. Not the same as the number of people filing for unemployment, "Lee told Yahoo Finance.
In Georgia, Vanchiasong made ends meet with her lemongrass and $ 600 weekly federal government unemployment insurance bonus - which she said "helped a lot".
Her employer called her back in July, the same month the government's $ 600 unemployment bonus expired. But Vanchiasong remembers how scared she was when she was initially on leave, unsure when or if the company would call her back.
"I was largely dependent on what God had planned for me," she said. "So I've prayed a lot for it."
Brian Cheung is a reporter covering the Fed, the economy, and the banking of Yahoo Finance. You can follow him on Twitter @bcheungz.
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