Economists point out that the jobs lost in the pandemic since January 2020, seventy-five percent have already been regained. The percent is unprecedented in the history of recessions. It is now apparent; this success has not revealed a silver-lining. It is anything but, as both workers and employers took the opportunity of the pandemic to reshape their expected futures. Many businesses made changes to their business models, some to expand in new opportunities. For laid-off employees, large numbers of laid-off workers thought about what occupations they want to hold, and where they want to live. This particular phenomenon has been particularly heavy among educators and healthcare workers that have opted out of their most recent occupations, leaving behind a total of 2.7 million additional job vacancies. Another 4.9 million people resigned their jobs during the pandemic and are not working or looking for work now – they have exited the employment market altogether. This “opt-out” among employment aged, men and women was previously a long-standing demographic that existed for greater than 6.0 million people for a decade prior to Trump’s election. Those people came out of their “malaise” to be rehired during the economic surge of 2017 through 2020. The labor market has been reshaped by the foregoing to such a degree that it is predicted that the misfit of occupations offered and occupations desired, without even consideration of geographic changes. This is going to keep unemployment rates higher than what would be expected from a recession. In summary, many workers have found, or will find they do not have experience in the occupations they hope to move to. So too, employers are not willing to train people for jobs that have never existed in their new business model. Not surprisingly, so far during the pandemic, 3.6 million people have retired; taking early Social Security. These retirements are more than 2.0 million greater than expected for the period. It would seem the challenge is unprecedented for consideration.
If the situation appears troublesome right now, it is soon to become worse. On September 6, Labor Day, federal bonus-unemployment compensation ends, and for the occupations at the low-end of wage rates, these people will be losing more in unemployment pay than they were making in their former jobs’. Furthermore, they have largely been out-of-work for several months, at least. Peter Ganong, assistant professor at the Harris School of Public Policy at the University of Chicago says, one of the most well-known facts in labor economics is people unemployed for a short time get jobs really quickly; people unemployed for a long time, not so much.
As is often the case in recessions, the misery is not equally shared among the states of the nation. It is seemingly correlated to the unequal distribution of Covid-19 spread among the states. Twenty-seven states have significantly less unemployment than the other twenty-four states and District of Columbia; the difference is two-hundred fifty percent less unemployment. There is no doubt that population density has made an effect upon the spread of Covid-19. The more closely people live, take public transportation, work in urban settings and work in high-rise commercial buildings are more likely to come into contact with Covid-19spread. States having cities comparing to the preceding description are likely to have taken stronger action than less urban states west of the Mississippi River. Businesses that were permitted to reopen with a higher threshold of Covid-19 spread also were more likely to stay open for business for a longer period of time. Perhaps the “low-hanging-fruit” of employees seeking reemployment in the same occupation have already been matched with an employer, making the market tighter than expected as well.
In concluding, some off-hand observations are the following. The Trump tariff increases that have not been withdrawn should be unilaterally reduced to their previous level. A new, more economical unemployment compensation scheme should be created that does not pay more unemployment compensation than a person’s previous pay. Something like a GI Bill for vocational education and community colleges for white collar business subjects should be made widely available. K-12 public schools must remain open for classroom attendance, as this coincides with needs of many working families for child care. We need more immigration because we in fact have a shortage in the workforce; it is not growing as output has grown. Furthermore, the social costs of government entitlements is uneconomic with the present number of workers per entitlement recipients.1
1This essay was originally published on September 5, 2021 without the last two sentences of the last paragraph.
Publiustoo.com September 6, 2021