Financial Help for Hotel Workers during the COVID-19 Pandemic: Timing Is Everything

Background and Purpose: The macroeconomic crisis associated with the COVID-19 pandemic resulted in huge job losses in industries most affected by social distancing guidelines such as leisure and hospitality which employs a disproportionate number of women of color and immigrants (Kochhar, 2020). Massive layoffs compounded the economic disadvantages these population groups experienced before the pandemic. In partnership with local foundations, a small financial services technology company gave financial assistance to hotel workers in New Orleans. Our study examined these workers’ food insecurity and problems paying bills before and after assistance was received.

Methods: Hotel workers were offered prepaid VISA gift cards of $200 for three consecutive months. Data for this study came from monthly surveys worker completed in October 2020 – just before they received assistance – and November 2020 – after the first month of assistance. We also used aggregated VISA transaction data to examine spending patterns. Chi square tests were run to examine pre-post differences in food insecurity and problems paying bills. Probit regression models were run to examine differences by worker characteristics and to estimate probabilities that workers experienced pre-post differences.

Results: Due to the pandemic, most workers had been furloughed (57%), while 30% had been laid off and 13% experienced reduced work hours or pay. Most workers were Black (61%), female (55%), and single (52%). The percentage of workers who said they experienced food insecurity and bill problems dropped from 45% and 67% before assistance to 27% and 58% after assistance, respectively (p < .001). Before assistance, Black workers had much higher rates of food insecurity (56%) and bill problems (79%) than workers with other racial/ethnic identities (26% and 52%, respectively) (p < .001). Predicted probabilities that Black workers reduced food insecurity and bill problems were 25% and 19% compared to 15% and 10% among White workers, respectively (p < .01). Over half of assistance was used on basic needs such as groceries and gas, nearly half was spent on a wider range of categories such as clothing, shoes, and home goods, and less than 3% was used on recreational activities or alcohol.

Conclusions and Implications: Results indicated that the financial assistance program was well targeted and timed to reach hotel workers adversely affected by the COVID-19 pandemic. Though we cannot make causal attributions due to the single group pre-post descriptive design, results suggest that cash assistance may have helped workers during a “drought” of government help. However, short-term financial assistance is a far cry from the structural economic changes needed to raise wages, improve benefits, and expand the social safety net – especially for Black workers who, despite being employed in the same setting and in similar positions faced much greater financial difficulties than other workers.