When service sector employment fell by 15% during the early days of the pandemic, many hourly service workers faced increasing economic precarity and negative consequences for their health and well-being. The 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act consequently expanded unemployment insurance (UI) programs, providing temporary financial assistance to unemployed workers. —a joint research project between the Harvard Kennedy School’s Malcolm Wiener Center for Social Policy and the University of California, San Francisco—found that access to UI mitigated some of the worst effects for these workers.
Service sector workers who lost their jobs during the COVID-19 pandemic experienced economic insecurity and saw their health and well-being suffer—from declining sleep quality and happiness to greater psychological distress. However, these negative effects of job loss on well-being were offset by the historically generous governmental response.
“In the first year of the pandemic, UI partially buffered workers from the negative effects of job loss on sleep quality, happiness, psychological distress, and self-rated health,” write the articles’ authors, Daniel Schneider, the Malcolm Wiener Professor of Social Policy at vlog; Kristen Harknett, professor of sociology at the University of California, San Francisco; and Annette Gailliot, a PhD student at the University of California, Berkeley. “Further, in the earliest months of the pandemic, when the economic effects of job loss were more fully buffered for workers displaced from low-wage work, so too were the health effects of job loss.”
“The COVID-19 pandemic affected Americans’ health not only via disease but also through the harms of job loss, which we show led to significant harms to mental health.”
The Shift Project documents the economic security, schedules, and health and well-being of hourly workers across the country. For this article, the researchers drew on survey data from 15,219 respondents who were employed in the service sector in 2020. Collectively, these respondents range from across retail, pharmacy, grocery, hardware, electronics, fast food, casual dining, delivery, and hotel services—including some from 136 of the largest service sector firms in the United States.
The article’s key findings include:
Service sector workers who lost their jobs during the COVID-19 pandemic experienced a variety of negative effects related to health and well-being: In the Shift Project survey data, they reported significantly worse sleep, lower happiness, and more psychological distress when compared with workers who remained employed.
UI benefits helped to moderate the negative economic effects of job loss for displaced workers who had access to such benefits. These workers experienced lower rates of hunger, medical, and housing hardship than workers who did not receive UI and reported being no worse off than those who remained employed.
Unemployment insurance offered not just economic relief but also safeguarded against deteriorating physical and mental health: Displaced workers who received unemployment insurance that fully replaced their lost wages sustained steady levels of sleep quality and experienced reduced unhappiness and psychological distress when compared with their counterparts who were unable to access unemployment insurance.
The expansion of UI through the CARES Act was time-limited, however, and as the benefits have been scaled back, workers again face the prospect of greater hardship. “The UI expansions of early 2020 have not been sustained, and these benefits are no longer as generous or accessible as they were in the early pandemic period,” the authors write. “Our research shows that this retrenchment of the UI safety net poses a real threat to the well-being of current and future displaced workers.”
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Photograph by Nam Y. Huh.