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Bureau of Labor Statistics > Office of Survey Methods and Research > Publications > Browse Research Papers

The K-Shaped Recovery: Examining the Diverging Fortunes of Workers in the Recovery from the COVID-19 Pandemic using Business and Household Survey Microdata

Michael Dalton, Jeffrey A. Groen, Mark A. Loewenstein, David S. Piccone, Jr., and Anne E. Polivka

Abstract

This paper examines employment patterns by wage group over the course of the coronavirus pandemic in the United States using microdata from two well-known data sources from the Bureau of Labor Statistics: the Current Employment Statistics and the Current Population Survey. We find that both establishments paying the lowest average wages and the lowest wage workers had the steepest decline in employment and are still the furthest from recovery as of the most recent data for workers in December 2020 and establishments in January 2021. We disentangle the extent to which the effect observed for low wage workers is due to these workers being concentrated within a few low wage sectors of the economy versus the pandemic affecting low wage workers in a number of sectors across the economy. Our results indicate that the experience of low wage workers is not entirely due to these workers being concentrated in low wage sectors – for many sectors, the lowest wage quintile in that sector also has had the worst employment outcomes. For each month from March 2020 to January 2021, at least 20% of the decline in employment among the lowest wage establishments was due to within-industry changes. Another important finding is that even for those who remain employed during the pandemic, the probability of becoming part-time for economic reasons increased, especially for low-wage workers.