Those at the low end of the skill and income ladder were falling further behind. Recently, however, very tight labor markets have meant that even unskilled and less educated workers have enjoyed higher real earnings, poverty rates have begun to decline, and even the bottom 20 percent of households have had a significant increase in their standard of living for a change.
This is, of course, partly a consequence of the health policies that were put in place to contain the pandemic. But consumers and businesses also adapted their behaviour voluntarily in order to reduce the risk of infection. In many cases, firms’ liquid assets were insufficient to cushion the huge drops in revenue.