Universidad Tecnológica de El Salvador
The Rich Cut Their Spending. That Has Hurt All the Workers Who Count on It.
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The Rich Cut Their Spending. That Has Hurt All the Workers Who Count on It.

The steepest declines in spending during the coronavirus recession have come from the highest-income places.

Emily Badger and Alicia Parlapiano
The New York Times, 2020
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Historically, the service industry provided work to the unemployed in other sectors during US economic crises. But things are different in the 2020 coronavirus recession. COVID-19 has hit the services sector the hardest. This brief overview by journalists Emily Badger and Alicia Parlapiano highlights that government aid has propped up low-wage workers’ income. But their future is precarious without a return to pre-COVID-19 spending patterns, especially those of the rich.

Summary

The coronavirus pandemic has affected the American economy’s service employees particularly harshly.

Low-wage service workers make up a much larger share of the economy in 2020 than in the past. And their economic well-being is more closely tied to spending by the rich. Restaurant servers who work for tips especially feel the pinch. 

For example, a popular show at Lincoln Center in New York City brings a great deal of revenue from theatergoers to servers at nearby restaurants.The spread of COVID-19 closed down these income-producing venues, decimating service employment that relies wholly on the spending of these affluent...

About the Authors

Emily Badger covers urban policy at The New York Times, where Alicia Parlapiano reports on politics and policy.

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