‘Essential’ Designation No Guarantee of Employment; Higher Education Level, Lower Risk
June 11, 2020 — As California and the nation move through the phased reopening of economic activity, a new ‘Vulnerability Index’ created by Beacon Economics identifies occupations facing the greatest risk for a protracted and challenging recovery.
“The health-mandated shutdowns have certainly caused pain across worker occupations, but the road back to normal will be longer and more difficult for some,” said Taner Osman, Research Manager at Beacon Economics. “Some of the industries and workers hit hardest during the closures are also at greatest risk during the recovery stage.”
The index, developed by Osman and Research Associates John Macke and James McKeever, assigns risk based on the level of direct human contact (frequency and proximity) an occupation requires, and on the viability of telecommuting within that occupation. Workers in occupations with a high degree of on-the-job contact and little prospect of working remotely are at significantly higher risk when it comes to their ability to return to work quickly and in the same capacity.
While there are varying levels of vulnerability among California’s largest metro areas due to different occupation mixes in different locations, the index shows that, across the board, workers designated as ‘essential’ are at greater risk during the recovery stage than those considered ‘nonessential’.
“The classification of workers as essential or non-essential will take on less weight as the economy reopens,” said Osman. “The most vulnerable workers during the mitigation and recovery stage are in occupations facing a demand shortage due to consumer fears about the virus.” Many sectors, such as air transportation, might be considered essential, but because they require high levels of person-to-person contact, they will be slower to recover, according to the analysis.
Following are key findings from Beacon’s Vulnerability Index in each major metro:
- About 60% of workers in LA County are classified as essential, while the remaining 40% are classified nonessential.
- 34% of LA County’s 2.2 million nonessential workers are high risk compared to 56% of its 3.4 million essential workers.
- High-risk workers, whether essential or nonessential, are more likely to hold less than a bachelor’s degree and earn less than $25,000 per year.
- About 57% of workers in the City and County of San Francisco are classified as essential, while the remaining 43% are classified nonessential.
- 44% of San Francisco’s 320,000 essential workers are high risk compared to only 24% of its 270,000 nonessential workers.
- Unlike every other metro, high-risk workers, both essential and nonessential, are not concentrated among less-educated demographics. But a worker in the high-risk category is still less likely to have more education than a worker in the low-risk category.
- Roughly 67% of workers in San Diego County are classified as essential, while the remaining 33% are classified nonessential.
- 54% of San Diego County’s 1.3 million essential workers are high risk compared to just 34% of its 700,000 nonessential workers.
- High-risk workers, whether essential (73%) or nonessential (66%), are likely to hold less than a bachelor’s degree. Additionally, most high-risk workers, both essential and nonessential, are of Hispanic or non-Hispanic white descent.
South Bay/Silicon Valley
- About 62% of workers in the South Bay are classified as essential, while the remaining 38% are classified nonessential.
- 43% of the South Bay’s 700,000 essential workers are high risk compared to just 22% of its 500,000 nonessential workers.
- Workers in the high-risk category, essential and nonessential, are more likely to be renters than homeowners, and among the renter population, high-risk workers are more likely to be rent-burdened (housing costs more than 30% of household income).
- Roughly 65% of workers in the East Bay are classified as essential, while the remaining 35% are classified nonessential.
- 49% of the East Bay’s 1 million essential workers are high risk compared to just 26% of its 600,000 nonessential workers.
- Among all high-risk workers, those who are nonessential are more likely to earn less than $25,000 per year. High risk workers in both groups, however, tend to hold less than a bachelor’s degree.