- Catherine Devlin
Americans Are Going Back To Work. Or Are They?
The impact of COVID-19 on the American economy has been a concern of policymakers and U.S. citizens since the start of the pandemic. In August, the Bureau of Labor Statistics unemployment data appeared to finally bring some good news, reporting a decline in unemployment by 2.8 million people (1.8%), marking the fourth consecutive month of decline. But before spirits get too high, it is important to note the limitations of this data. The numbers reported do not account for those who have stopped looking for jobs because of the pandemic or those who accepted part-time or temporary jobs due to a lack of full-time employment options. Furthermore, minorities and women continue to feel the strain of the economic downturn much more intensely than their white male counterparts.
In the case of unemployment rates, numbers don’t tell the whole story. As the number of potential workers who have become too discouraged to continue searching for work rises, the unemployment rate falls. As the pandemic discourages many from the job search, Johns Hopkins University economist Johnathan Wright noted that many are giving up the hunt or accepting part time work rather than continuing to search for a full-time career. Also, while government employment rose by 1.6% between July and August, this increase can be largely attributed to those temporarily hired for the U.S. census. The private sector, in contrast, saw an employment increase of just .9%.
For People of Color, unemployment rates will likely remain high. A survey of 28 quantitate macroeconomists conducted on September 8 saw a 90% chance of Black workers facing double digit unemployment rates at the end of the year. Black workers have faced similar trends throughout history, experiencing higher unemployment rates than whites during the Great Depression as well. Nick Bunker, North American director of economic research at Indeed Hiring lab summarizes this trend saying, “Black workers tend to be the first laid off and the last to be hired.” Latinx workers face similarly hostile hiring prospects. In August, Latinx workers experienced a 10.5% unemployment rate, while white workers had a 7.5% unemployment rate. It is likely Latinx workers will continue to experience higher rates of unemployment. The September 8 survey of macroeconomics saw the most positive prediction for Latinx unemployment rates (7.8%) be just slightly better than the most negative prediction for white workers (7.9%).
Women are similarly disproportionately affected. Unlike People of Color, the effect of the current recession on female workers is unprecedented. Women have lost more jobs than men for the first time in five decades over eight recession periods. The need for childcare may be a large factor in the slow return of women to the workforce. Even when the economy is flourishing, 1/3 of women with children who work part time name child care as a reason for their limited hours. A Bureau of Labor Statistic study on American use of time between 2015 and 2019 showed that married women spent 56% more time taking care of children and housework than married men. Because more American women than men are responsible for childcare, the additional care needed now that many schools are not reopening, coupled with nationwide school closures and limited access to childcare may prevent more women from returning to work. Data provided from the job-search website Indeed shows that child care services have been slower to rehire staff members than other industries, suggesting that such services may not be available in their previous capacities, further limiting women’s ability to return to work. Since women are the primary employees of the childcare industry, this slower rehiring further limits the number of women in the workforce as these female-held jobs do not reemerge.
Young people entering the workforce are facing lower earning potentials and job losses as a result of the pandemic’s recession. A study published in the August 2020 edition of The Journal of Public Economics shows that 29% of college students whose career prospects were affected
by the pandemic expect to earn less at 35 as a result of the recession. 40% of college students surveyed had already lost a job or internship, a statistic that aligns with a Pew Research Center Study published on September 4 which shows that young adults are the population who have been most likely to lose jobs or suffer a pay cut since February 2020. Young adults are certainly feeling the repercussions of these high unemployment rates. For the first time since the Great Depression, the majority of 18-29 year old Americans live with their parents.
The unemployment rate may be dropping, but many Americans will not be going back to work. The numbers reported by the Bureau of Labor Statistics are, in many ways, misleading as they don’t account for those who have accepted temporary or part-time jobs or those who have given up looking. People of Color continue to be disproportionately unemployed, as they have been in past recessions. Women and young adults also face high levels of unemployment and obstacles to joining (or rejoining) the workforce. With so many Americans still unemployed or unsatisfactorily employed, the economy may not recover as quickly as unemployment trends may appear to suggest.