1 in 9 Americans Start 2023 With Loss of Employment Income

In this Guide...

Our analysis of January data from the U.S. Census Bureau finds 11.6% of American adults experienced a loss of employment income in January despite a record-low overall unemployment rate. Learn which states and major U.S. cities are home to the hardest-hit workers.

Barista Posing At Coffee Counter
1
Key Findings

 

  • 11.6% of Americans (over 29.1 million adults) experienced a loss of employment income in January 2023.

  • 15.1% of California residents – roughly 4.5 million workers – experienced a loss of employment income.

  • At least 14% of state residents experienced a loss of employment income in Nevada, New Jersey, and Tennessee.

  • At least 10% of residents in 36 states experienced a loss of employment income in January.
2
Study Overview

The overall unemployment fell to its lowest rate since 1969 in January 2023, yet millions of Americans are seeing their employment income take a hit.  

Our analysis of the most recent data from the U.S. Census Bureau Household Pulse Survey finds more than one in nine Americans experienced a loss of employment income in January. This comes despite a record low 3.4% unemployment rate, a lingering worker shortage and a better-than-projected January jobs report.

Nationwide, over 29.1 million people aged 18 and over (nearly 11.6% of U.S. adults) reported a loss of employment income in January.

3
Loss of Employment Income in Each State

More than 15% of workers in California experienced a loss of employment income in January, which was the highest rate in the nation. The table below shows the percentage and number of adults in each state who lost employment income in the same month.

Click on image to enlarge in a new tab

Table showing rates of adults in each state who lost employment income in January 2023 where the national average is 11.6 percent and the top state is California at 15.1 percent and West Virginia is bottom state at 6.8 percent

Only 14 states and Washington, D.C. had fewer than 10% of workers experience a loss of income in January.

4
Loss of Employment Income for Workers in Major Cities

We also explored the January Census Bureau data to analyze the percentage of workers in the most-populated U.S. cities who experienced a loss of income in January.

Among the cities measured, Riverside, CA, had the highest share of workers who had an employment income loss in January, at 17.3% of adults (over 710,000 people).

Click on image to enlarge in a new tab

Table showing rate of employment income loss for workers in 10 major U.S. cities where the national average is 11.6 percent and Riverside, California, is the top city at 17.3 percent and Dallas, Texas, is the bottom city at 11.9 percent

5
Unemployment vs Loss of Employment Income

January is historically the worst month for layoffs, as many companies try to balance the books after the calendar year. The tech industry has been hit particularly hard with recent layoffs, and more employees at tech companies were laid off in January 2023 than in any other month since the start of the COVID-19 pandemic.  

Meanwhile, millions of American workers quit their jobs during the “Great Resignation” of 2021 and 2022, and more than 60% of employees are considering leaving their job this year. 

It’s important to note survey respondents who reported loss of employment income may not meet the U.S. Bureau of Labor Statistics definition of "unemployed." This may help explain why the survey data reflects a high level of employment income loss during a period of low overall unemployment.

While the survey results don’t indicate a reason for the high level of employment income loss, there are at least five economic factors that may be at play.

Hours Have Been Cut

4.1 million people were categorized as working “part time for economic reasons” in January, meaning they would prefer full-time work, but their hours have been reduced or they were unable to find full-time work.

Many retail stores and restaurants have trimmed their operating hours amidst an ongoing worker shortage. This in turn can eat into the income of current hourly workers who suddenly have fewer assigned work hours.

Parents Are Losing Income Because of a Lack of Childcare Access

The COVID-19 pandemic forced the closure of thousands of childcare facilities, many on a permanent basis. As a result, a high number of parents left a job, did not take a new job or greatly changed their working hours because of childcare issues in 2021.

The childcare shortage has continued to cost parents an average of $5,500 per year in income.  

Illness Is Keeping Many Workers at Home

More than 1.2 million people missed work in January due to an illness, as the lingering COVID-19 pandemic coincided with winter flu season. Only one other pre-pandemic month since 2008 saw more people missing work due to illness. Additional people are missing work to tend to a child’s illness during a trifecta “tripledemic” of COVID-19, flu and RSV.   

Holiday Employment Has Ended

It’s typical for many people to see a loss of employment income in January, as the end of the calendar year marks the end of holiday employment for many seasonal workers in retail, distribution and delivery, and more.

The many thousands who took on seasonal employment around the holidays while also employed elsewhere aren’t counted among the unemployed, but their lost income may be reflected in the Census survey data.    

Inflation and Supply Chain Issues Are Cutting Into Income

Many workers are losing income due to supply chain issues and the inflated cost of materials. Independent contractors and small business owners have been hit especially hard.

6
Methodology

The data used for this report came from the U.S. Census Bureau Household Pulse Survey, specifically Week 53 (Jan. 25, 2023), the most recent data available.

More Useful Guides
Woman in wheelchair leading group discussion
Our analysis of 2022 U.S. Census Bureau data highlights the states and cities where the highest rates ...
Our analysis of employment data from the Census Bureau reveals the top cities that attracted new workers ...
A view of the bottom of a medical gurney being loaded into the back of an ambulance
Though the rates of serious injuries suffered at work fell dramatically in 2020, North Dakota, Arkansas ...