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Less-educated Asian Americans among hardest hit by job losses during pandemic

Brian Cheung
·Reporter
·5 min read

In May, Kang Vanchiasong lost her job on an assembly line at a medical device company in Georgia. To make ends meet, she started selling lemongrass from her farm in Jefferson, opting to sell on Amazon (AMZN) after the local farmer’s market shut down due to the pandemic.

Vanchiasong, a Lao immigrant who moved to the United States 45 years ago, represents one of the communities hardest hit by the pandemic: Asian Americans with no more than a high school education.

“The ones that don’t have work right now, I don’t know what else they [can] do,” Vanchiasong, 63, told Yahoo Finance. “I have my farm, so I survived with that.”

A recent study from the Federal Reserve Bank of Chicago notes that 77% of Asian men and 56% of Asian women with a high school degree or less were employed before the pandemic.

During the depths of the crisis, employment among those subgroups dropped to 46% and 32% respectively — worse than other groups when controlling for the same education level.

The Chicago Fed used microdata from the Census Bureau's Current Population Survey and found that Asian men and women with no college degree suffered the steepest job losses in the pandemic. (Credit: David Foster / Yahoo Finance)
The Chicago Fed used microdata from the Census Bureau's Current Population Survey and found that Asian men and women with no college degree suffered the steepest job losses in the pandemic. (Credit: David Foster / Yahoo Finance)

“There is a huge disparity across groups, including all minority groups, but the group that was hit hardest in the immediate aftermath of the pandemic is Asian Americans with no college education,” Chicago Fed senior economist Luojia Hu told Yahoo Finance.

For workers like Vanchiasong, questions loom over why the Asian American community has been so deeply affected — and the consequences for years to come.

Breaking down Asian unemployment

The unemployment rate in September for Asian Americans was 8.9%, worse than the white unemployment rate of 7% but better than the Black and Hispanic unemployment rates of 12.1% and 10.3%, respectively.

But as the Chicago Fed research shows, the headline unemployment rate for Asian Americans may be masking the economic fallout for low-skilled, less-educated workers.

Kang Vanchiasong working on her farm in Jefferson, Georgia. Photo: Zepha Gerber
Kang Vanchiasong working on her farm in Jefferson, Georgia. Photo: Zepha Gerber

A report from consulting firm McKinsey notes that Asian Americans have the highest within-group income inequality in the country — the top 10% of earners make 10.7 times the income of the bottom 10%.

“Oftentimes, the narrative comes back: We don’t need to worry about Asians, they’re actually great, they all go to Ivy League schools,” McKinsey partner Emily Yueh told Yahoo Finance, adding that the Asian American community is not a monolith.

The McKinsey report adds that Southeast Asian and Pacific Islanders are less likely to have a high school diploma and tend to suffer from higher unemployment rates than East Asians.

A report from consulting firm McKinsey cites U.S. Census Bureau data (2018 American Community Survey 1-year estimates) in describing the demographic differences among different Asian American subgroups. (Credit: McKinsey)
A report from consulting firm McKinsey cites U.S. Census Bureau data (2018 American Community Survey 1-year estimates) in describing the demographic differences among different Asian American subgroups. (Credit: McKinsey)

At first glance, one might conclude that the steep job losses in the pandemic may have something to do with high Asian employment in high-contact settings like restaurants, the heart of many Asian communities and a major employer for lower-educated workers.

But the Chicago Fed researchers still observed the wide differences even when controlling for occupation and industry, suggesting other forces are at play.

Another explanation may be the significant drop-off in business activity in Asian communities. Memories of the SARS virus in 2002, in addition to fears of xenophobia, pushed communities like New York City’s Chinatown to close before nationwide shutdowns began.

Job retraining

Federal Reserve Chairman Jay Powell has warned that “long stretches of unemployment can damage or end workers' careers as their skills lose value.”

With small businesses closing their doors for good, the concern is that less educated workers face a steeper road to finding new work — even when a vaccine arrives.

People in masks walk past a closed shop in the Chinatown neighborhood of Manhattan during the coronavirus outbreak in New York City, New York, U.S., March 18, 2020. REUTERS/Mike Segar
People in masks walk past a closed shop in the Chinatown neighborhood of Manhattan during the coronavirus outbreak in New York City, New York, U.S., March 18, 2020. REUTERS/Mike Segar

The Chinatown Manpower Project, a New York City nonprofit, offers English language instruction and job training courses with a focus on helping new immigrants and low-income workers.

Since the onset of the pandemic, CMP has shifted its job retraining resources toward helping the jobless apply for unemployment insurance. CMP executive director Hong Lee said he is hopeful that workers will be able to get back to jobs.

CMP held a virtual job fair on Sept. 24, which included hirings for low-skill work, and attracted about 350 attendees and 16 employers, down from past job fair attendance of about 500 people and 35 employers.

“They are slowly trickling in [back to jobs], but not as big a spike as the reverse. Not the same as the amount of people applying for unemployment,” Lee told Yahoo Finance.

In Georgia, Vanchiasong made ends meet with her lemongrass and the federal government’s $600-per-week bonus unemployment insurance — which she says “helped a lot.”

Her employer called her back in July, the same month the government’s $600 unemployment bonus expired. But Vanchiasong recalls how scared she was when she was initially furloughed, uncertain about when or if the company would call her back.

“Largely I depended on what God planned for me,” she said. “So I prayed a lot for that.”

Brian Cheung is a reporter covering the Fed, economics, and banking for Yahoo Finance. You can follow him on Twitter @bcheungz.

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