An economic epicenter of coronavirus in New England: low-wage service workers An economic epicenter of coronavirus in New England: low-wage service workers

Brief explores impact on service workers and their importance to recovery Brief explores impact on service workers and their importance to recovery

April 6, 2020



If it wasn’t obvious before, the coronavirus outbreak makes it clear: Society depends heavily on service industries to provide the essential goods and public amenities we all need to live and work each day.

Although healthcare workers are rightly acknowledged as heroes in these perilous times, putting themselves at risk to save countless lives, low-wage service workers have also emerged as an indispensable part of our economy. What’s the physical and financial toll on these essential workers, many of whom have now been laid off or must report to lower-wage, high-risk jobs to keep the rest of us going?

Boston Fed Community Development researchers undertook an analysis of the non-healthcare service workers in New England most impacted by the coronavirus pandemic. They wanted to understand who they are, the challenges they face, and what could mitigate their elevated risks in this unprecedented health and economic emergency.

The researchers found the impacts on segments of the service workforce will be immense, and low-income workers of color will disproportionately bear the brunt of them. They also found the effects on this sector are rippling across the economy, all the way to the top.

“Service workers are really important to the economy, but this crisis highlights more than ever whose backs we survive on,” said Marybeth Mattingly, a brief co-author and assistant vice president for Community Development Research and Communications. “It may make us reevaluate what it means to pay many of our essential workers less than a living wage.”

The most vulnerable are now vital to keeping our societal cogs turning

The brief focuses on the most severely impacted non-healthcare workers: those in food service, cleaning and building maintenance, retail, hospitality, and on warehouse staffs. In New England, this group accounts for about 1-in-5 workers.

According to Mattingly, these often-overlooked low-wage service workers now find themselves on the front lines of the COVID-19 crisis, and they have a lot to lose. Some will get a little extra hazard pay, but many don’t have comprehensive health insurance or adequate sick leave beyond the two weeks provided by The Families First Act. That’s a problem for workers who need more time to recover.

“This really brings to the forefront job quality issues that existed before now, but in this situation, they will have devastating consequences on already vulnerable populations,” Mattingly said.

Sara Chaganti, a senior policy analyst and a brief co-author, said workers in different parts of this service sector are caught in contradictory dilemmas. On one hand, widespread business reductions or closures have cost large numbers of food service, retail, and hospitality workers their jobs. At the same time, building cleaners and workers at grocery stores, pharmacies, and warehouses are required to work.

“Many are working even if they don’t feel well, because they’re living paycheck to paycheck,” Chaganti said. “These folks have historically had little voice to demand safe working conditions.”

Protecting service worker health and economic prospects is key to recovery

Chaganti highlighted research that’s referenced in the brief which outlines how historic decisions and structures have left these workers vulnerable. Yet right now, Chaganti said, “the rest of us are counting on them to keep us going.”

Any future public policy solutions to the crisis can’t just focus on shoring up business, she said – they also must protect the health of service workers and their communities while providing economic lifelines, including cash.

“Putting money in their pockets so they can stay afloat, as well as providing or expanding access to affordable health insurance and adequate sick pay, could have the same ripple effect of protecting us all the way up the chain,” Chaganti said.

The brief also emphasizes that policymakers must prioritize the needs of service workers when determining how long new supports should last. And Mattingly added that policymakers must resolve to do better next time. She said people in this critical sector of our economy can’t be left this vulnerable in a crisis again: “We need to ask, ‘How might we reduce inequalities and create a sector and a society that really values this work and provides opportunities more equitably?’”

Read the full brief.