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The pandemic economy has favored the well-off and made life miserable for the working poor. New motor vehicle sales for 2020 reflect that bifurcated reality.

The automobile industry has been 鈥渕uch more focused on higher-priced products and more affluent customers鈥� since the pandemic hit, Charlie Chesbrough, senior economist at Cox Automotive, said in the firm鈥檚 2020 year-end wrap-up, delivered online Jan. 8.

Cars and trucks with price tags of $50,000 and over gained market share while the segment comprising new vehicles costing under $30,000 took a big hit, he said.

At one end of the market, affluent buyers benefiting from a stratospheric stock market and the ability to do high-salary work from home went on a car and truck buying spree last year. At the other end, layoffs hit the working class hard, especially those in service industries that require face-to-face contact. That pushed new car buying way down the priority list for those potential buyers, Cox statistics show. And many of those with jobs but low incomes found it harder to get financing, the market research firm said.

Auto industry leaders feared the worst when the pandemic first swept the U.S. early last year, but the so-called K-shaped nature of the economic aftermath helped cushion the impact.

Car and truck sales did dive in 2020. About 14.5 million passenger cars and trucks were sold in the U.S., down from 17 million in 2019, a 14.7% drop. But the increase in sales of higher-margin trucks and SUVs, and the willingness of affluent buyers to load up on options including driver assistance features such as adaptive cruise control, eased the pain for automakers. The average price of a new car topped $40,000 in December for the first time ever.

鈥淭he vehicle price issue suggests the typical customer of a new vehicle is becoming even more affluent and is more insulated from the pandemic,鈥� Chesbrough said. In 2020, 23% of cars and trucks sold were priced below $30,000, compared with 28% the previous year. Vehicles that cost above $50,000 were 28% of the market last year, up from 26% in 2019 and 12% just five years ago.

Those flush with disposable income spent money on durable goods that might otherwise have been spent on vacations, restaurants and other service-industry goodies, according to Sung Won Sohn, professor of finance and economics at Loyola Marymount University.

鈥淎s people spend less on services and more on things, there has been greater demand for goods like appliances, furniture and household repairs, boosting manufacturing and construction,鈥� he wrote in his monthly jobs report.

鈥淯nfortunately, the K-pattern won鈥檛 go away even when the spring arrives. In order to reduce the hardship of the service workers, more help from the government is needed.鈥�

Every automaker saw a U.S. sales decline in 2020 except Tesla, Alfa Romeo and Mazda.

However, Cox analysts noted that 2021 will test Tesla鈥檚 astounding stock price and market value (about $821 billion on a price-earnings ratio of 1,657).

With a flood of competing electric cars from nearly all major carmakers to hit the market in 2021, 鈥渘ew competition will slow Tesla,鈥� said Cox analyst Michelle Krebs. 鈥淚n 2021, there will be EVs in more shapes, sizes and prices.鈥�

Cox has warned about Tesla competition before, she said. But 鈥渨e mean it this time.鈥�

The ranks of America鈥檚 long-term unemployed are swelling as the pandemic nears a full year, increasing the likelihood of lasting impacts on their finances, health and wages.

While 12.3 million jobs have come back since the pandemic low in April, nearly 4 million Americans have been out of work for at least 27 weeks. That鈥檚 considered the threshold for long-term unemployment and the group is at a seven-year high.

Many of them will need to rely on government aid for longer as a resurgent pandemic made 2020 a historically challenging year for job seekers.

Prolonged unemployment harms physical and mental well-being, traps workers in poverty and increases family stress, according to studies. The longer the spell of joblessness, the more difficult it becomes for workers to get reemployed, earn higher wages and prevent skills atrophy.

鈥淚t is a big deal already because we鈥檙e seeing over a third of the unemployed have now been long-term unemployed,鈥� said Elise Gould, senior economist at the Economic Policy Institute. 鈥淭hat鈥檚 going to be continuing to rise.鈥�

Doreen White, 54, from Lakeland, Florida, used to work as a marketing manager for a women鈥檚 health clinic until her employer laid off staff in April. Government unemployment benefits helped, but she said she still had to withdraw funds from her retirement account to stay afloat.

White said she received only three interviews after submitting almost 200 applications.

鈥淭here鈥檚 a lot of emotions involved,鈥� she said. 鈥淲hy am I not getting a job? Why can鈥檛 I find something? A lot of self-doubt starts to creep in.鈥�

Combined with the initial shock of job losses, prolonged financial hardship and difficulty finding jobs that match their skills all add to long-term unemployed workers鈥� mental pressure, said Timothy Classen, a health economics professor at Loyola University Chicago.

Though the jobless might maintain a living through benefit checks, many can鈥檛 afford health care expenses. Even if they have cheaper insurance plans such as Medicaid, their access to mental health care is limited, Classen said.

The long-term unemployed are also more pessimistic about finding jobs, a 2014 Gallup survey showed. Separate research has shown that those out of work for more than six months are unlikely to be working a year later and even less likely to have a stable job.

鈥淭hat is a vicious cycle,鈥� Classen said. 鈥淵ou take an income hit, you face a job stability hit, and likely have a worse health insurance.鈥�

Even though people such as White are eager to work, the economy hasn鈥檛 yet returned to full capacity, with many states reimposing lockdown measures to control new COVID-19 cases. The number of available jobs in October 2020 stood at 6.65 million, but more than 11 million workers were without a job during the month, according to data from the U.S. Department of Labor.

Stimulus hopes

Meanwhile, amid limited job prospects and a raging virus, many of the long-term unemployed might have to count on yet another stimulus package to bridge them to the other end of the pandemic. That could be increasingly likely given Democrats swept the Georgia Senate runoff elections that help determine control of the chamber.

The federal government鈥檚 Pandemic Emergency Unemployment Compensation program, which offers payments to those who exhausted their regular state unemployment benefits, will be phased out in March and April, extended from the end of 2020 in last month鈥檚 $900 billion aid law.

By comparison, unemployment insurance eligibility during the Great Recession reached 99 weeks, almost twice as long as during the pandemic downturn.

Extended unemployment benefits help workers to find jobs better suited to their skills and benefit women, minorities and less-educated workers in particular, according to a July working paper distributed by the National Bureau of Economic Research. Research also has indicated that more-generous benefits don鈥檛 necessarily discourage workers from returning to work.

鈥淒id we learn those lessons from the Great Recession? I鈥檓 not sure,鈥� said Gould of the Economic Policy Institute. 鈥淚 feel like we鈥檙e about to repeat the same mistakes by not providing enough aid.鈥�