Myths of the Pandemic Job Market

Myths of the Pandemic Job Market

Remember “she-op”? What about a wave of early retirements, or America’s army of quiet quitters?

For economists and other forecasters, the pandemic and the post-pandemic economy have been a lesson in humility. Time and again, predictions about how to permanently change the labor market have proved tentative or misleading.

Women who lost their jobs at the start of the pandemic have since returned in record numbers, making she-sessions a short-lived phenomenon. Deaths from the coronavirus have spiked as well as retirements, but many older workers are back in the job market. Even the man credited with stirring up a national buzz by posting a TikTok video about doing the bare minimum in your job has suggested that “quietly quitting” may not be the way of the future — he’s in on it. quit hard These days.

It doesn’t mean that nothing has changed. In a historically strong labor market with very low unemployment, workers have more power than usual, so they are winning better wages and new perks. And the shift toward working from home for many white-collar jobs is still reshaping the economy in subtle but important ways.

But the big takeaway from the pandemic is simple: The shock to the US labor market didn’t make it permanently worse off. This mirrors the aftermath of the 2008 recession, when economists were similarly skeptical of the labor market’s ability to rebound – and were proved wrong even after the economy strengthened.

“The profession hasn’t fully digested the lessons of recovery from the Great Recession,” said Adam Ozimek, chief economist at the Economic Innovation Group, a research organization in Washington. One of those lessons, he said: “Don’t bet against the American worker.”

Here’s a summary of the stories from the labor market that rose and fell during the recovery from the pandemic.

Women’s jobs were lost in bulk at the start of the pandemic and people were worried that they would be left out forever worse In the labor market – but this has not been proven to be the case.

In the wake of the pandemic, employment has actually increased faster among women than men — so much so that, as of June, the employment rate for women in their prime working years, usually defined as 25 to 54, was the highest on record. (Employment among prime-age men is back to where it was before the pandemic, but still lags behind a record.)

Another persistent narrative at the start of the pandemic: It will lead to a wave of early retirements.

Historically, when people lose their jobs or leave late in their working lives, they don’t return to work—effectively retiring, whether they label it as such or not. So when millions of Americans in their 50s and 60s left the labor force at the start of the pandemic, many economists doubted they would ever return.

But the early retirement wave never really took off. Americans aged 55 to 64 returned to work just as quickly as their younger peers and are now employed at higher rates than before the pandemic. Some may have been forced to return to work due to inflation; Others had always planned to return and did so as soon as they felt safe.

The retirement story was not entirely false. Those Americans who have passed the traditional retirement age — 65 and older — still haven’t returned to work in large numbers. This is helping to reduce the size of the overall labor force, especially because the number of Americans in their 60s and 70s is growing rapidly as more baby boomers reach their retirement years.

Technology layoffs in large companies have prompted a discussion white collar recession, or one that primarily affects affluent technology and information-sector workers. Although those layoffs have undoubtedly been painful for those who experienced them, they are not prominently featured in overall employment data.

At the moment, the country’s high-skilled workforce seems to be shifting to new and different jobs very rapidly. Unemployment It has little to do with both information and professional and business services – the hallmark white-collar industries that cover most of the technology sector. And layoffs in the tech sector have slowed recently.

For a moment it seemed as though young and middle-aged men — those roughly between the ages of 25 and 44 — weren’t getting back into the labor market like other demographics. However, over the past few months, they are finally recovering their pre-pandemic employment rates.

This recovery occurred much later than some other groups: for example, men aged 35 to 44 has yet to hold steady to employment rates that match their 2019 averages, while women were included last year age group eclipse their employment rates before the pandemic. But recent progress suggests that even though men are taking longer to recover, they are slowly making gains.

All of these narratives share a common thread: While some cautioned against drawing too early conclusions, many labor market experts were skeptical that the job market would fully recover from the pandemic shock, at least in the short term. Instead, the backlash has been swift and widespread, defying the dismal narrative.

This is not the first time economists have made this mistake. This is not even the first time in this century. The devastating recession that ended in 2009 forced millions of Americans out of the labor force, and many economists embraced a so-called structural explanation for why they were slow to return. Workers’ skills or professional networks may have been destroyed during a long period of unemployment. Perhaps they were addicted to opioids, or receiving disability benefits, or were stuck in a part of the country with few job opportunities.

However, in the end, a much simpler explanation turned out to be correct. People were slow to return to work because there weren’t enough jobs for them. As the economy recovered and opportunities improved, employment rose again among nearly every demographic group.

The recovery from the pandemic recession has been much faster than the recession that followed the 2008 recession, which was made worse by the global financial meltdown and housing market collapse, which left long-lasting scars. But the core lesson is the same. When jobs are plentiful, most people will go to work.

“People want to adapt and people want to act: these things are generally true,” said Julia Coronado, founder of Macropolicy Perspectives, a research firm. He noted that the pool of available labor continues to grow over time and amid concerted immigration. “People are resilient. They figure things out.”

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