The Unemployment Rate Is Above 20% For Nation’s Lowest-Paid Workers, Federal Reserve Says

By Rilyn Eischens, the Minnesota Reformer

January 15, 2021

The unemployment rate for the lowest-paid workers in the United States is likely above 20%, while the rate is below 5% for the nation’s highest-paid workers, according to the Federal Reserve.

The COVID-19 pandemic has exacerbated economic disparities, and the country’s recovery has been uneven so far, Federal Reserve Governor Lael Brainard said in a speech Wednesday. Conditions have improved for certain industries and demographic groups, but others are still experiencing “substantial hardship,” Brainard said.

The overall national unemployment rate was 6.7% in December, down from a peak of 14.8% in April, according to Federal Reserve data. People of color continue to experience the worst economic effects, with unemployment at more than 9% for Black and Latino workers, and 6% for white workers, Brainard said.

Labor force participation has declined as well, especially among Black and Latina women with school-aged children.

“The recovery thus far has been uneven, and the path ahead is uncertain. We remain far from our goals,” Brainard said.

Minnesota’s economic disparities mirror national trends during the pandemic. Between June and November, the state’s unemployment rate among Black workers surpassed 11% — nearly twice the rate for white workers, according to the Minnesota Department of Employment and Economic Development.

A recent University of Minnesota study found that Minnesota’s women workers, especially women of color, have experienced a “dual vulnerability” during the pandemic — a higher likelihood of being laid off and a higher risk of being exposed to COVID-19 at work.

The Minnesota Reformer is an independent, nonprofit news organization dedicated to keeping Minnesotans informed and unearthing stories other outlets can’t or won’t tell..