Three years after the national health emergency, More than 1.1 million deaths due to covidAmid a wave of retirements and rising inflation, the US workforce is leaner and more compact than it was before the pandemic. For workers, it means continued leverage to secure wage gains and better conditions even as the economy slows.
The job market has rebounded sharply from the blow dealt by Covid-19 when it swept the country in early 2020, thanks to strict federal relief measures and a large-scale vaccine rollout. But the health crisis has transformed the economy in ways that have continued throughout the recovery, and analysts expect its ripple effects to continue despite slowing employment and fears of an economic recession.
When the world went into lockdown in March 2020, low-wage workers in hospitality and other service roles saw some of the most severe job losses amid The largest drop in employment after World War IIAccording to a study conducted by the National Bureau of Economic Research (NBER) in March. While some parts of the economy have rebounded beyond pre-pandemic measures, employers in many industries still face staffing challenges.
Spending is back, labor demand is back, but we have a smaller workforce.
“Spending is back, labor demand is back, but we have a smaller workforce,” said Wendy Edelberg, director of the Hamilton Project and senior fellow at the Brookings Institution. “This is one of the reasons why the labor market is feeling tight and why companies left, right and center are reporting that they are having difficulty finding workers.”
US population 1.4 million people shy away from pre-pandemic expectations Based on its growth rate before Covid hit, according to an April Brookings analysis of federal data. About 900,000 of these “missing” people were expected to work.
Edelberg attributed roughly 650,000 of those absences to deaths (COVID-related or otherwise) and the remaining 250,000 to immigration policies during the pandemic — notably Title 42, a Trump administration measure that ended Thursday night with the federal public health emergency.
Many workers in the country are still suffering from the health effects they incurred during the pandemic.
A January report from the New York State Insurance Fund, the state’s largest workers’ compensation company, found that during the first two years of the pandemic, 71% of patients present with symptoms of ‘long COVID’ require ongoing medical treatment or have not returned to work for six months or longer.
A report from management consulting firm McKinsey & Co. Also, from January, the economy lost ground 315 million to more than 1 billion workdays Among American employees due to covid last year alone, the equivalent of 1.3 million to 4.3 million people leaving the workforce.
“On the high end, this is about twice the average number of days sick that American workers took in the decade prior to the pandemic,” the researchers wrote.
One of the main reasons the job market remains so tight is that the pandemic has hit an already aging US population.
Some older workers dropped out of the workforce earlier than planned as employers cut jobs and furloughed employees. As the subsequent recovery begins a hiring spree, many recent retirees have returned from the sidelines, but others have stayed put.
A recent study conducted by the Federal Reserve Bank of New York indicated that A 2.1 million “participation gap” workers, This is largely due to an aging population of baby boomers and increasing retirements.
While job growth is finally moderating and layoffs have been piling up for months, many employers are still hungry for hiring. Government data showed 9.6 million jobs in Marchdown from last year’s levels but still well above the roughly 7 million openings posted before the pandemic — in what was already a hot market at the time.
Last month, the United States added 253,000 jobs, continuing a long string of job gains that have been a boon for workers, as many engaged in the so-called Great Resignation to search for better opportunities and a work-life balance, or even entirely new jobs during the economic recovery. Others reap the rewards by staying put, as bosses add incentives for employee retention.
Wage growth at the bottom makes the labor market more equal.
“We’ve had this massive imbalance between employee demand and employee supply over the last couple of years,” said Paige Ouimet, a professor of finance at the University of North Carolina-Flagler School of Business at Chapel Hill.
“The shift has started slowly, but the situation is still different in terms of the bargaining power that employees have compared to their employers,” she said.
NBER study From March it was found that wage gains among the lowest paid workers significantly slowed the growth of income inequality. Arindrajit Dube, a study co-author and economist at the University of Massachusetts, Amherst, said the scale of low-income earners’ wage gains has been staggering — rising 6% from January 2020 to September 2022.
“Wage growth at the bottom makes the job market more equal,” said Dube.
Low-paid workers bring in more income, he said, “because they have been able to leave, because they have been able to find better jobs.” The trend has fueled a pandemic-era wave of labor organizing efforts, including from brand-name brands like Starbucks and Amazon, as workers test their leverage.
There is also evidence that intense competition for workers increases labor participation among certain groups.
According to the Brookings Institution, women ages 25 to 54 have boosted their labor force participation by 1.5 percentage points since 2019, while blacks ages 25 to 64 have done so by 1.7 percentage points over the same period.
However, some demographics see the opposite trend. “White men of all ages and older white women participate less” in the workforce, W Brookings Institution researchers wrote. Labor force participation among white men ages 20 and older It stood at 70.1% in Aprildown from 71% in March 2020.
The labor force participation rate of 23% among people with disabilities is up from 20.7% in 2019, according to Federal employment data. This rise reflects the number of disabled workers who entered the workforce during the jobs boom – as well as the increase in people working with long Covid.
Flexible remote working arrangements have made many jobs more accessible to people with disabilities. Government data showed that 27.5% of employers are in the private sector Allowing full or part-time remote work As of last fall, the most recent data available.
“I am very confident that the ability to work remotely will continue to impact who works and who doesn’t,” said Edelberg of the Brookings Institution. These effects are not fully fixed in the data. This is with us for a long time.”
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