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October 1, 2020

This Recession is Different: Hardship among Asian American Communities and the Need for State Policy Solutions

The economy shows some signs of recovering from the worst of the pandemic-driven recession, yet the share of working people in Virginia who are unemployed is still more than twice as high as last year. In addition, the topline numbers obscure double-digit unemployment rates among working people of color, particularly Black, Latinx, and Asian American workers. For Asian American workers, this trend is markedly different from the previous recession, when the unemployment rate among Asian American workers was slightly lower than the overall unemployment rate. At the state level, Virginia policymakers must take action to address the historic level of economic and health needs, particularly among the communities of color who have been more likely to be excluded from the federal response to date. State action should also more specifically address challenges faced by Asian Americans, such as language barriers and anti-immigrant restrictions around public services.

Prior to the full impact of the current recession, the Asian American unemployment rate in Virginia was about 3.2% in the first months of this year. In the late spring and early parts of the summer, the unemployment rate sharply increased among all groups of workers. However, although unemployment rates have started to fall among white workers, unemployment still remains between 13% and 14% among Black, Latinx, and Asian American workers over the last several months. [Note: this analysis is based on IPUMS Current Population Survey (CPS) microdata, which produces slightly different numbers for some months than state employment statistics published by the Bureau of Labor Statistics that also incorporate other data sources; however, the CPS microdata are the only timely and publicly-available source for sub-national employment data by race and ethnicity.]

Image is a bar graph showing a sharp rise in unemployment rates among Asian American workers in Virginia from January to August 2020.

These high levels of unemployment seem to be tied, in part, to the outsized impact of the pandemic on the leisure and hospitality sectors, in which Asian American and Latinx workers in Virginia are more likely to be represented. It is also worth noting that topline unemployment rates, poverty rates, and other economic indicators for Asian Americans have tended to mask enormous variation among different Asian American communities that are evident at a more disaggregated level. Some Asian American communities in Virginia are likely facing even greater economic hardship than suggested even by the double-digit unemployment rate. 

Research suggests that official U.S. statistics may have understated the extent to which Asian American workers lost jobs earlier in the recession due to data issues around which people were counted as officially unemployed. After accounting for this misclassification problem, the national unemployment rate for Asian American workers may have been as high as 20.3% in May 2020, according to analysis from the Pew Research Center.

Alongside economic hardship and the health effects of the pandemic, Asian American communities have also suffered from a surge of xenophobia and anti-Asian racism, much of which stems from racist conspiracy theories and has been documented by an increase in hate crimes and harassment against Asian Americans. As a result, many Asian American cultural districts and Asian American-owned restaurants across the U.S. suffered a steep decline in business earlier than other businesses. Asian students have also experienced well-documented additional discrimination in education spaces since the onset of the pandemic, which can create new challenges for families and communities.

At the same time, relief measures, including those enacted at the federal level, failed to fully reach many communities of color, including Asian American communities. For example, the Economic Impact Payment checks that were part of the federal CARES Act were not available to families where even one of the spouses files income taxes using an Individual Taxpayer Identification Number (ITIN). This restriction excluded about 323,000 Virginia residents, including about 221,000 undocumented immigrants who do not have a Social Security number and 103,000 family members of undocumented immigrants (65,000 of whom are children). Immigrants from Asian countries represent about a quarter of Virginia’s undocumented population, which means many Asian Americans in Virginia were likely excluded.

Despite the historically high levels of unemployment noted earlier, Asian American workers in Virginia appear to be much less likely to file claims for unemployment benefits. That means many of these workers may have missed out on critical financial support, such as the temporary $600 per week boost to unemployment benefits that was in place until late July. While some Asian American workers may not qualify for unemployment benefits due to immigration status, it is likely that many Asian American workers otherwise would have qualified but had difficulty navigating the application process due to language barriers.

Barriers also have prevented Asian American business owners from accessing needed assistance. Similar to the experience of Black- and Latinx-owned businesses, Asian American-owned businesses were much less likely to receive federal funds through the Paycheck Protection Program (PPP). For Asian American-owned businesses, a lack of existing relationships with large financial institutions as well as language barriers seems to have played a role. At the state level, Virginia’s Rebuild VA Grant Fund for businesses and nonprofits excludes several types of businesses that are disproportionately owned by Asian Americans, such as laundromats and dry cleaning businesses.

The state has policy options available to help address these needs. That could mean providing additional income supports, such as supplemental wage replacement for unemployed workers, tax credits, or direct payments that have less restrictive eligibility than what has been available to date. This also means making forms, applications, and phone intake options available in more languages so that more Asian American people in Virginia are able to access existing services and relief programs, as well as any new efforts that are launched. For example, the state’s Rebuild VA Grant Fund has application materials available in Arabic, Chinese, Korean, and Vietnamese languages. Further steps must be taken to include other languages commonly spoken among the state’s Asian American population. The state should also improve access to rent relief. Community members who do not speak English fluently have reported problems with language access for rental assistance in some parts of the state.

In addition, state lawmakers should expand health care options, such as providing funding to eliminate existing barriers to health coverage for lawfully present immigrants. For example, the restrictions in Virginia’s Medicaid program that apply to lawfully present immigrants go beyond a federal five-year requirement and currently require a 40-quarter (or 10-year) work history. The state General Assembly approved funding in March to eliminate this barrier, but this was subsequently “unallotted”—or paused—due to uncertainty around the state budget situation. Because of the pandemic and widespread unemployment, the need to remove this barrier is more urgent than ever. While the barrier remains in place, many immigrants in Virginia, including Asian American immigrants, are locked out of comprehensive coverage when they arguably need it most.

Although the governor’s budget proposal from August did not restore this funding, the Senate Finance and Appropriations Committee budget would restore this funding beginning in July 2021. Meanwhile, the House Appropriations Committee budget would restore this funding beginning in January 2021 as long as the state’s December 2020 revenue projection does not decline by a certain amount. That funding would then continue through at least June 2022, as long as the state’s revenue collections through June 2021 do not substantially decline. As the General Assembly finalizes its budget, including funding to lift this barrier will be crucial for expanding health care coverage in the state.

The Asian American population in Virginia is an important and growing community in the state. Even though the overall state economy is showing the beginnings of a recovery, these improvements have not been broadly shared. During this moment, Asian American families in the state are facing unprecedented economic hardship. State policymakers must prioritize additional economic support that is inclusive, making sure these measures are accessible to everyone in Virginia.

Economic Opportunity, Health Care, Immigration

Chris Wodicka

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