10 C
Munich

Not counting the level of unemployment, but they want to work

Robert Hesse was expecting an immediate promotion of Sub Zero Ice Cream, a nitrogen ice cream parlor in California, when it closed due to an epidemic in March.

“I love working,” said Hesse, a college graduate who turns 26 on Tuesday. “Otherwise I feel useless.” But he does not want to look for a new job because he lives with his parents, who have not been vaccinated yet, and is afraid of bringing the virus to them.

“It’s just health problems. “I really do not want to surround the society yet,” he said.

Hesse presents what, according to economists, is one of the most obvious features of the decline of the epidemic economy. A wave of workers who have left the workforce as the government counts.

More than 4 million people have left the workforce in the year since the epidemic wiped out the economy, leaving a gap in the job market that cuts through age and circumstances. Exceptionally high numbers are out of order due to child care, other family responsibilities or health problems. Others refused to look for work because they were frustrated by the lack of opportunities. And some older employees called it earlier than planned.

The drop in this workforce is not counted in the most common unemployment rate, which stood at 6.2% in February, making the group a hidden victim of the epidemic.

Now that the labor market is starting to come out of the epidemic window, is one of the big questions about the recovery horse who left the workforce, and if so, how quickly?

“There are many dimensions to the epidemic that I think are contributing to this phenomenon,” said Eliza Forsythe, an economist at the University of Illinois at Urbana-Champaign. “We do not really know what the long-term consequences will be, because it is different from the past.”

There is some reason for optimism. Economists expect that many who have left the workforce in the last year will return to work when health և childcare problems are alleviated. And they are optimistic that as the job market heats up, it will affect workers who are frustrated with finding a job.

For example, Hesse said that he was going to seriously look for a new job after being vaccinated, and expressed hope that he would return to work this year.

Moreover, since the recent recession, many economists have said that those leaving the workforce are unlikely to return due to disability, opioid crisis, loss of skills, or other causes. Still, labor force adaptation to demographic shifts has finally returned to normal.

But the speed with which the epidemic pushed workers out of the workforce has had a devastating effect, which can cause domestic damage.

The labor force participation rate among 16-year-olds has fallen by about 61%, compared to 63% in February 2020. Among older workers, 54 out of 25, it has dropped from 81% to 83%.

According to a study by Wales Fargo, in their first years of work, women quit almost twice as many jobs as men, in part because more women work in areas such as leisure և hospitality that are less socially appropriate, in part for women. they are more likely to carry the burden of childcare. The share of black women leaving the workforce is more than twice that of white women.

Then there are the many people who can look for work but are unable to get a job because of health problems, illness or care obligations, putting them in what economists say is a gray area to be unemployed “not in the workforce”. strength – it is more common during the epidemic.

Older employees are out of the workforce, including those who have dropped out of health or illness or who have taken advantage of early retirement. Labor force participation among people over the age of 55 has fallen to 38% from 40% a year earlier.

A study by the research company Oxford Economics estimates that about 2 million workers have left the workforce since the start of the pension epidemic, which is twice the level of 2019.

For a legion of older workers hoping to return to work after the epidemic, a difficult path can be expected. Studies show that older people leaving the workforce will have a harder time getting back there because of age discrimination and other reasons. If this reality is maintained during the recovery, the number of elderly workers who have left the workforce, either because they could not find work or because they retired early, could be one of the continuing consequences of the epidemic.

One of the predominant issues is whether employers, as before, will treat those who have been out of the workforce for a long time with restraint.

Even in the cramped labor market, long-term unemployed people face a stigma, says Maria Heidkamp, ​​director of the New Start Career Network, which helps New Jersey job seekers.

“Apart from any age, race or gender discrimination they may already face, there is ample evidence that it is easier to find a job if you already have a job,” he said. While employers can ignore any gaps in the epidemic resume, he said “there is no reason to think it will be different for the people who are around now and who want to return.”

Still, because of the unique economic impact of the epidemic, many economists believe that the extraordinary number of people leaving the workforce would be a temporary deviation rather than a symbol of a deep structural problem.

“I do not think the U.S. labor force participation rate will generally be lower,” said Betsy Stevenson, a professor of economics and public policy at the University of Michigan who was a member of President Barack Obama’s administration. economic consultants.

There is already evidence that people who have left the workforce are returning to work.

Labor force participation among young people, which fell in the early stages of the epidemic, was significantly restored as the service industries were pushed back.

LEAVE A REPLY

Please enter your comment!
Please enter your name here