Lower-income groups, who depend on the service industry for jobs, are taking the biggest impact from the shutdown of an economy that is driven by service activity like hotels, bars and restaurants.
Lower earners are going to feel the biggest hit from the economic shutdown, according to Federal Reserve research.
Lower-income groups, who depend on the service industry for jobs, are taking the biggest impact from the shutdown of an economy that is driven by services like hotels, bars and restaurants. They work in the hard-hit retail sector and are dependent on others being able to shop and dine and travel, activities which all have been sharply curtailed during the current shutdown.
The situation is going to be exacerbated, the research found, because the initial spread of coronavirus cases happened in regions with lower levels of economic stress previously, but now is spreading to higher stress regions. There's less consensus, though, on what the recovery will look like, with projections ranging from a U, V, W, orThe worst-case outcome is that even if the government starts lifting restrictions, people still will be too afraid to resume their normal levels, and that in turn will steepen the recession.
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