PRB

The coronavirus pandemic sweeping the globe in 2020 will have long-term and widespread effects on the U.S. economy and labor force. A PRB analysis finds that workers in one of the hardest-hit sectors—food preparation and server-related occupations—are among the most economically vulnerable.

Food preparers and servers include cooks, waitstaff, and others who help prepare and serve our meals in restaurants, coffee shops, hospitals, and school cafeterias. As businesses begin to reopen, the economic challenges facing lower-income workers may have a negative ripple effect. Financial pressures may compel people to work when sick, and those who are uninsured may delay or avoid seeking care for an illness.

In 2018, the United States had 8.8 million food preparers and servers, and more than four in 10 of them (41%) were low-income, meaning they had family incomes below 200% of the official poverty threshold ($50,930 for a family with two adults and two children). Nationwide, 19% of workers were low-income in 2018 (see table).

TABLE. Low-Income Status of U.S. Workers in Selected Occupations, 2018

Food preparers and servers face additional challenges:

• A high housing cost burden: In 2018, more than three in 10 workers in food preparation and server-related occupations (31%) had a high housing cost burden—defined as spending more than 30% of household income on housing costs such as mortgage or rent payments, utilities, and other expenses. The national average for all workers was 20%. (Housing costs can impact household composition, as PRB reports.)
• Lack of health insurance: About 21% of food preparers and servers lacked health insurance coverage in 2018—more than double the national average (10%). Health insurance coverage is important not only so low-income families have access to affordable health care when they need it, but also because persistent health issues and chronic conditions can affect their ability to work and provide for their families.
• Very low pay for unskilled workers: Among workers in restaurants and other locations that serve meals, dishwashers are among the most economically vulnerable. In 2018, more than 300,000 people worked as dishwashers in the United States, and nearly half of them (49%) were low-income. Chefs and head cooks were among the least likely to be low-income, at 28%.

African Americans and Native Americans Are More Likely to Be Low-Income

The novel coronavirus is affecting people across the nation, but African Americans and Native Americans are among the most economically vulnerable populations, as PRB notes in an analysis. Those who work in food preparation and server-related occupations are particularly vulnerable (see Figure 1). In 2018, over half of African American food preparers and servers were low-income, compared with 37% of white workers in those jobs. American Indians/Alaska Natives also had a high share of food preparers and servers who were low-income (49%).

FIGURE 1. Low-Income Status of Food Preparers and Servers and All Workers, by Race/Ethnicity, 2018

Workers in the South Are More Likely to Be Low-Income

Food preparers and servers are faring better in some states than others (see Figure 2). In three states—Hawaii, New Hampshire, and Rhode Island—fewer than 30% of workers in food preparation and server-related jobs were low-income in 2018. Food preparers and servers were most likely to be low-income in Arkansas and Mississippi, at more than 55% each. In general, states in the South have higher shares of low-income workers than states in other regions.

FIGURE 2. Food Preparers and Servers Who Are Low Income, 2018

^{Note: Families with incomes below 200% of the official poverty threshold are classified as low-income. These estimates are subject to both sampling and nonsampling error.
Source: PRB analysis of data from the U.S. Census Bureau’s American Community Survey PUMS.}

Personal Service and Sales Workers Are Also Vulnerable

Personal care and service workers—including child care workers, personal and home care aides, workers in hotels and casinos, fitness instructors, and others—are also expected to be hit hard by lost wages and unemployment stemming from the coronavirus pandemic. In 2018, the United States had 4.4 million personal care and service workers and 32% were low-income. Salespeople, also at high risk of layoffs and lost earnings, make up a larger group of workers—15.7 million in 2018—but were less likely to be low-income, at 22%.

In combination, food preparers and servers, personal care and service workers, and salespeople make up 28.9 million workers, or about 19% of the total U.S. workforce. Yet they account for 28% of all workers who are low-income.

Policymakers Can Help COVID-19-Affected Workers and Businesses

Low-income workers face significant challenges—including housing stability and access to affordable health care and child care—under normal circumstances. The pandemic crisis puts these workers at a double disadvantage. Lack of health insurance may discourage low-income workers from seeking health care when they need it, and treatment may result in medical debt. The risk of lost wages may lead people to go to work when sick, increasing the health risk for others. Workers who are laid off due to illness or government-imposed distancing measures may not have enough money to meet basic needs, including food and housing.

Policymakers can help by providing direct cash transfers to affected workers and the businesses that employ them. Some jurisdictions and service providers are also implementing moratoria on evictions and utility shut-offs, and making other accommodations to address the COVID-19 crisis. By providing an adequate safety net for workers who are most economically affected by the pandemic, policymakers can improve the economic outlook for millions of people and speed the recovery of the U.S. economy.

More information about the economic divide between working families at the top and bottom of the economic ladder is available in Low-Income Working Families: Rising Inequality Despite Economic Recovery, by Beth Jarosz and Mark Mather.