Perspectives from Main Street: The impact of COVID-19 on workforce entities [2021]


Heidi Kaplan

Workforce development and job service entities experienced the impacts of the COVID-19 pandemic, with almost all reporting disruptions last year. Using data from the Federal Reserve’s Perspectives from Main Street survey conducted in August 2021, this report provides key insights into workers in low- to-moderate income (LMI) communities and organizations serving them. It is based on responses provided by 1,332 organizations (36%) that told us they work on workforce development and/or jobs issues. 

About the survey

The COVID-19 pandemic continues to present challenges to communities and households nationwide. In August 2021, the Federal Reserve distributed a survey designed to collect information on the effects of COVID-19 on LMI people and communities and the entities serving them. This report offers survey findings focused on responses from entities that provide workforce development and jobs services.  

The survey was fielded by eight national partners and Federal Reserve Community Development. This survey provides an insightful and informative snapshot of how COVID-19 was affecting people and organizations on dates the survey was administered. The current report is based on data collected through a convenience sample. Readers should not compare findings in this report to similar surveys conducted in 2020.

The survey was completed by 3,681 organizations across the country working on a broad range of community issues including housing, small business, workforce development, and consumer finance.

Description of Workforce Entities

Federal Reserve Community Development provides research on labor markets and workforce development to support the Federal Reserve’s mandate to maximize employment. This report focuses on the responses provided by the 1,332 (36%) organizations that reported that they work on workforce development and/or jobs issues (“Workforce Entities”). These respondents provide insights about workers in LMI communities as well as the organizations that serve these individuals.

Among Workforce Entities, 18% reported workforce development and jobs are the top issue their organization works on. Furthermore, 88% of Workforce Entities reported their organization has a primary mission focused on LMI individuals or historically underserved communities.

The Workforce Entities included in the sample serve a variety of geographies. Overall, 78% of the Workforce Entities serve an urban area and 59% primarily serve an urban area. On the other hand, 73% serve rural communities and 29% primarily serve a rural community.

About half (52%) of the Workforce Entities primarily serve a community of color. Sixteen percent (16%) of the Workforce Entities serve a population that is more than half Hispanic or Latino. Twenty-one percent (21%) of the Workforce Entities serve a population that is more than half Non-Hispanic Black or African American. Furthermore, 30% of the Workforce Entities are led by a person of color.

Figure 1

Disruption to communities and people served

Among Workforce Entities, 99% reported that the pandemic caused a disruption to their community at the peak of the pandemic, with 90% saying the disruption was significant. In August 2021, 97% of Workforce Entities continued to report a disruption, but the percent describing the disruption as significant decreased to 48%.

Figure 2

Workforce Entities reported that conditions since the pandemic began have deteriorated for the people and communities they serve, including for access to healthcare (64%), services for children (80%), housing stability (74%), and basic consumer needs (65%).

Figure 3

  • “Healthcare” includes “access to health insurance, and mental health services.”
  • “Services for children” includes “availability of early childcare and education, access to child welfare services, and adequate access to K-12 education.”
  • “Housing stability” includes “evictions, back rent, foreclosures, and homelessness.”
  • “Basic consumer needs” includes “food, household essentials, and other personal needs.”

Workforce Entities reported that most (79%) of the people and communities they serve were less financially stable in August 2021 than prior to the pandemic.

Figure 4

More than half (56%) of the Workforce Entities said it would take one to three years for their clients to recover financially from the pandemic. Fifteen percent (15%) said it would take four years or more and 18% said their clients may never recover.

Figure 5

Most Workforce Entities reported that the people they serve continue to have disruptions with access to healthcare, services for children, housing stability, and basic consumer needs. The organizations were most likely to report services for children (65%) and housing stability (58%) as the most significantly disrupted.

Figure 6

Role of government assistance

Workforce Entities identified government supports as critical to the people they served. Stimulus checks and rent relief were most often identified as “very critical” (70%), as were small business support and unemployment benefits (70%).

Figure 7

Most Workforce Entities report that the people they serve are facing challenges returning to work (95%), with 68% saying it is a significant challenge. Workforce Entities also report that most of the people they serve are facing challenges accessing government funding (79%), with 37% saying it is a significant challenge. (“Returning to work” includes “childcare support, public transportation, COVID-19 exposure risk” while “accessing government funding” could be “due to eligibility or lack of capacity.”)

Figure 8

Disruptions to workforce entities

Most Workforce Entities experienced a disruption due to COVID-19 sometime during the pandemic (99%), with 69% describing the disruption as significant. In August 2021, 94% of Workforce Entities continued to experience disruptions from COVID-19, with 32% describing them as significant.

Figure 9

More than a quarter (27%) of Workforce Entities experienced a positive financial impact and 25% experienced no financial impact from COVID-19. However, for nearly half (48%) of Workforce Entities, COVID-19 had a negative impact on the overall financial health of the organization. (Figure 12 identifies revenue impacts.)

Figure 10

Among the Workforce Entities that experienced a negative impact to their financial health, 9% expected to face financial distress including reducing services, laying off staff, closing locations, or shutting down entirely within 3 months. And an additional 18% expected to face financial distress within 6 months if conditions did not change.

Figure 11

The pandemic brought changes in sources of revenue for many Workforce Entities. More Workforce Entities experienced a greater decrease than increase in individual donations (13% difference), corporate donations (20%), and fees for services (19%). However, a greater number of Workforce Entities saw an increase than a decrease in foundation funds (8%) and government funds (46%).

Figure 12

Comparing August 2021 to pre-COVID-19 levels, 70% of Workforce Entities experienced an increase in expenses.

Figure 13

Some Workforce Entities (31%) increased their staff levels.

Figure 14

When comparing August 2021 with pre-pandemic conditions, 73% of Workforce Entities reported an increase in demand for services. Among the Workforce Entities with an increased demand for services, about half (49%) were able to increase their services for customers.

Figure 15

When comparing August 2021 with pre-pandemic conditions, 61% of Workforce Entities reported an increase in government funding. Among the Workforce Entities with an increase in government funding, 54% were able to increase their services for customers and 41% were able to increase staffing levels.

Figure 16

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