While the demand for goods and services has rebounded since the United States emerged from pandemic lockdowns, the labor supply has decreased, according to The New York Times (subscription).
The situation: Two years after the pandemic began in the United States, the labor market has only just returned to its pre-pandemic size.
- This means, however, that the workforce is still millions of people short of where it would have been if the pandemic had never occurred.
Why it’s happening: “In simple numbers, some of that gap is due to Covid’s death toll: more than a million people, about 260,000 of them short of retirement age.”
- “In addition, a sharp slowdown in legal immigration has pared the potential workforce by 3.2 million, relative to its trajectory before 2017, according to calculations by economists at J.P. Morgan.”
Digging deeper: Still, it’s also clear that some of the attrition has come from people who have chosen not to return to the workforce. The current share of American workers either working or actively looking for jobs is 62.4%—down from 63.4% in February 2020.
Who’s out: People who have left the workforce disproportionately include people of or close to retirement age, who had previously been working longer as lifespans increased. Also overrepresented are men aged 25 to 54.
- Meanwhile, long-term health complications from COVID-19 have also kept some people from returning.
Who’s in: Women have returned to the workforce more quickly than men—possibly because women have become more likely to earn college degrees than men in recent years, giving them an advantage in a job market that has become more eager for college graduates.
The numbers: “Morning Consult found in August that prime-age adults who aren’t working cited a variety of often overlapping reasons for not wanting jobs.”
- “In a monthly poll of 2,200 people, 40 percent said they believed that they wouldn’t be able to find a job with enough flexibility, while 38 percent were limited by family situations and personal obligations.”
- “But the biggest category, at 43 percent, was medical conditions. Other data suggest some of that is due to long-term complications from Covid-19, although estimates of how many people have been knocked out of the workforce by Covid range tremendously.”