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Pay cuts persist for many Americans during pandemic

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Most U.S. workers who took a pay cut early in the COVID-19 pandemic are still earning less than they were before, a study found.
(Lauren Raab / Los Angeles Times)

Pay cuts introduced by U.S. employers in the early days of the COVID-19 pandemic — meant to stave off layoffs and retain key employees — have proved less temporary than perhaps originally envisioned.

The majority of workers who took a reduction as the virus brought the economy to a halt are still earning less than they were before the outbreak, according to a Pew Research Center study released Thursday. That’s a sign of fragility in the labor market as the recovery slowly takes shape.

The extent of outright job losses brought on by efforts to contain the virus has been well documented: Half of adults who say they lost a job because of the pandemic remain unemployed, according to the study, a finding consistent with government statistics showing that the U.S. has regained about half of the 22 million positions lost in the early spring.

But shifts in earnings and pay structure have been harder to track, with average hourly wage data skewed higher by the disappearance of low-paid service-industry jobs and with overall income figures inflated by expanded government benefits that gave Americans a temporary boost.

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Nearly one-third of adults surveyed by the researchers said either they or someone in their household had to reduce their hours or accept a pay cut because of the outbreak, with 21% saying this happened to them personally. Among that subsegment of adults, 60% said they are earning less than before the outbreak, 34% said they’re making about the same amount of money and 6% are earning more than before.

The nationally representative survey of 13,200 U.S. adults was conducted from Aug. 3 to Aug. 16.

Separately, survey results highlight the racial divides in Americans’ economic well-being.

Some 44% of Latino Americans said they or someone else in their household have taken a pay cut because of the virus. That compares with 29% of white, 32% of Black and 41% of Asian adults.

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While about 40% of Black and 43% of Latino adults said they have used money from a savings or retirement account to pay their bills since the outbreak began, only 29% of white adults and 33% of Asian adults said the same, the survey results showed.

Beneath the fury over George Floyd’s death lie longstanding economic inequities that have plagued California’s 2.6 million black people.


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