31.5 million mostly front-line, customer-facing jobs offer both low hourly wages and a limited number of hours of work per week, and are particularly vulnerable to the COVID-19 pandemic

The US employment situation is more dependent on these jobs than it was before the Great Recession.

Just as we must be less complacent about the enormous health challenges posed by the rapidly spreading COVID-19 virus, we must anticipate a tremendous economic hit to the labor force.

This will require far more than a payroll tax cut or the enhancement of unemployment benefits.

Dan Alpert is an adjunct professor at Cornell Law School and a founding managing partner of the New York investment bank Westwood Capital LLC.

This is an opinion column. The thoughts expressed are those of the author.

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Over 57% of working Americans today are employed on an hourly basis or are self-employed. While this figure has not varied by more than a few percentage points over the past thirty years, the quality of hourly- and self-employment – and the vulnerability of workers to loss of employment during an economic crisis like what we are facing with the outbreak of COVID-19, the novel coronavirus – is far worse than it has ever been.

The quality of hourly work is declining

The traditional view of the hourly worker as the clock-punching factory hand – often the member of a union, with decent healthcare and layoff benefits – has given way to enormous service sectors that offer the most casual of employment on an hourly basis – often with few hours of work available to workers even in good times.

As a result, we're seeing pay for many US production and non-supervisory jobs — so any worker who is not in management or an executive — get weaker. Almost 56% of US production and non-supervisory jobs (about 59.5 million jobs) offer weekly incomes below the $802 weighted average weekly income for all such jobs. Together, those low-quality jobs offer a weighted average of $539 in weekly income, or just over $28,000 per year.

But there is a subset of these workers, in jobs offering even less income than the above, that are particularly vulnerable to the spreading pandemic. They occupy mostly front-line, literally customer-facing jobs that offer both low hourly wages and a limited number of hours of work per week. And there are a huge number of them – over 31.5 million, constituting nearly 30% of all production and non-supervisory jobs.

These jobs also offer the least to the hand-to-mouth, paycheck-to-paycheck workers who have come to increasingly dominate the landscape of American jobs over the past three decades. It stands to reason that many workers in these positions will be laid off for as long as potential customers quarantine, or will be unable to work if they themselves get sick.

The logical conclusion of a decades-long trend

This is not a new development. It is part of a three decade-long worsening of average job quality – measured in terms of production and non-supervisory jobs paying above and below the average weekly income for all such jobs. This slow decline was the subject of the US Private Sector Job Quality Index (or "JQI"), that I developed with others in 2019. After some improvement after 2012, the JQI has been deteriorating again for the past three years and is near its historical low again.

How did we get here in America and why is our labor force loaded with all these especially vulnerable workers?

Well, the answer can be illustrated with one simple shift.

In 1990 5.8 million people in the US were employed in eating and drinking establishments. Today 10.8 million people hold those jobs, which account for over 10% of all production and non-supervisory workers in the United States.

Back in 1990, the US had 12.7 million of those clock-punching manufacturing jobs – 17.3% of all production and non-supervisory jobs. Today those figures are 9.0 million manufacturing and 8.5%, respectively. There are now nearly 2 million more workers in eating and drinking establishments than there are making things.

And there is no downturn to compare what the effects of this coronavirus-driven shock could look like - restaurant and bar jobs passed manufacturing jobs during the Great Recession. And we have never had as many low-wage/low-hour jobs as a percentage of the total. We've never had a workforce this vulnerable.

One of the service sectors that has also seen enormous growth is, of course, the healthcare and social assistance industry – with over 18 million production and non-supervisory jobs. And it is likely that demand for labor in that sector will – if anything – increase due to viral pandemic. But even that sector suffers from an enormous percentage of low wage jobs, with some two-thirds of them making an average of less than $600 a week. And those front-line workers are obviously particularly susceptible to illness from Coronavirus patients.

This demands a strong response

Just as we must be less complacent about the enormous health challenges posed by the rapidly spreading COVID-19 virus, we must anticipate a hit to the labor force that is exacerbated by the low quality of the jobs that people have been forced into over the past decades.

This will require far more than a payroll tax cut or the enhancement of unemployment benefits. For one thing a tax cut won't help someone who isn't working isn't paying taxes – payroll or otherwise. And – after living hand-to-mouth since the Great Recession, many workers simply cannot get by on the pittance they would receive from unemployment insurance, even with food aid (SNAP).

And the businesses that employed these vulnerable workers – what of them? Many employers may find it difficult to recover and rehire after an extended period with depressed revenue and, possibly, defaults on their debt.

The low quality of most of the jobs created in the US since the post-recession years screams out for far greater government involvement and proactivity.

The economic historian Michael Lind, and the economist James Galbraith, have proposed immediate action to create and massively fund a federal Health Finance Corporation with full financial powers and the necessary flexibility to meet the unexpected needs of the coronavirus pandemic. I agree – we need to treat this crisis aggressively as a healthcare matter, as well as an economic matter.

As a world, we are under attack by a virus. As a country, we must mobilize as though we are in a fight for our lives. And we must – as we do in war – use our enormous strength and power as a nation to defend all our people.

Dan Alpert is an adjunct professor at Cornell Law School, a senior fellow in macroeconomics and finance at the school's Jack C. Clarke Business Law Institute, and a founding managing partner of the New York investment bank Westwood Capital LLC. He has been active in investment banking and finance since 1982.