COVID-19 Pandemic’s Impact on Household Employment and Income

COVID-19 Pandemic’s Impact on Household Employment and Income

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INSIGHTi
COVID-19 Pandemic’s Impact on Household
Employment and Income
Updated November 9, 2020
The Coronavirus Disease 2019 (COVID-19) pandemic has affected households in numerous ways,
including shuttering business and schools, resulting in an economic recession and loss of employment
income. An experimental U.S. Census Bureau household survey has been fielded to track the implications
of the COVID-19 pandemic on households. This Insight provides some data from that survey, as wel as
links to research on the pandemic-induced recession’s effects on households and policy responses to
them.
Loss of Employment Income
The Census survey found that close to half of al households in the United States experienced at least
some loss of employment income since March 2020, when the economic effects of the pandemic first
became apparent. The survey asked adults whether they lived in households that lost employment income
from March 13, 2020, to when they were surveyed in late September through mid-October 2020. The
survey did not ask whether that loss of employment income was directly attributable to the COVID-19
pandemic. It also did not ask how much employment income was lost.
While employment income loss was widespread, it was disproportionately in households that were in
lower income categories in 2019 and households with children under age 18. Figure 1 shows the
percentage of adults in households that reported income loss by their 2019 income category and family
type. The largest proportion of households that lost employment income were those with children and low
incomes (65% of households with 2019 incomes below $25,000 and children lost some employment
income since March); households without children and with a respondent age 65 and older were the least
likely to lose employment income.

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Figure 1. Percentage of Adults in Households That Lost Employment Income Since
March 2020, by 2019 Income Category

Source: CRS tabulations of U.S. Census Bureau’s Household Pulse survey for September 30 through October 12, 2020.
As shown in Figure 2, employment income losses were also more likely in households where the
respondent was not White/non-Hispanic. The highest rate of income loss was among Hispanics (of any
race), where 58% of the adult respondents said they were in households that lost employment income
since March. About half of Black/non-Hispanic respondents said they were in households that lost
employment income.
Figure 2. Percentage of Adults in Households That Lost Employment Income Since March
2020, by 2019 Income Category

Source: CRS tabulations of U.S. Census Bureau’s Household Pulse survey for September 30 through October 12, 2020.

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Policies Offsetting Employment Income Losses
The Census survey did not ask respondents how much employment income was lost, or how much of this
loss was replaced by government benefits. There are policies in place that usual y kick in during
economic slumps, such as unemployment insurance and Supplemental Nutrition Assistance Program
(SNAP) benefits. Additional y, Congress enacted legislation in March 2020 that provided for temporary,
ad-hoc enhancements to income maintenance policies, including the following:
 Two temporary paid leave entitlements for some workers, which may be used for certain
COVID-19-related needs, expiring at the end of 2020.
 Enhanced unemployment insurance (UI), including providing an extra $600 in weekly
benefits, expanding benefits to certain groups who usual y do not qualify, and providing
an extra 13 weeks of benefits. The extra $600 in benefits expired July 25, 2020, with
other provisions expiring at the end of 2020. President Trump subsequently issued a
presidential memorandum authorizing Lost Wages Assistance (LWA) grants to
supplement the weekly benefits of certain eligible UI claimants in participating states.
LWA grants may be paid in the amount of $300 a week in federal funds; if a state chooses
to contribute an additional $100 a week in state funds, the total is $400 a week. LWA
grants are available through December 2020, but the program terminates earlier if certain
conditions (related to funding or enactment of legislation) are met.
 Help for smal businesses, including a program (Paycheck Protection Program) that could
help them maintain payrolls.
 One-time direct payments to many individuals ($1,200 per person; $2,400 per married
couple, with $500 for each dependent).
The combined impact of employment income losses and government benefits on poverty rates wil not be
determined until the annual retrospective of income and poverty is released in the second half of 2021.
However, researchers have used computer simulation models to make estimates of their impact on
poverty. In summary, these studies find that the expanded benefits and one-time payments had the
potential to offset the income losses and potential increases in poverty that occurred earlier in 2020 (see
studies here, here, and here). However, the expected continued employment income losses into the later
part of 2020, the one-time nature of the payments to individuals, and the expiration of the extra $600 per
week in unemployment insurance is likely to result in income losses and higher poverty rates for the
remainder of 2020 and potential y result in a higher poverty rate for 2020 as a whole compared to the
poverty rate for 2019 (see studies here and here).

Author Information

Gene Falk

Specialist in Social Policy

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Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
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