The recovery in the American labor market altered the nature of the American workforce.
At the peak of the COVID-19 crisis COVID-19’s U.S. labor market’s employment loss was 14% lower than levels prior to the recession, more than eight percentage points more than the most bleak month in the Great Recession. But despite the unprecedented rise for unemployment rates, it would require 29 months regain the lost jobs and beat the recovery of the dot-com boom as well as the summer recession in 1990. The dramatic rise in jobs loss, and then the returning back to “normal,” was the fastest return to pre-recession employment levels in the past 40 years.
The Shifting U.S. Labor Market
The pandemic impacted specific sectors of the labour market in a way that was more severe than the rest, large part due to the different effects of sectors that were able to work from home and those who couldn’t. Leisure and hospitality suffered one of the most severe impacts, as millions of Americans have canceled their plans for vacation, dining, as well as entertainment arrangements for months. On the other hand, business and professional services, including those most likely to work via home work, have recovered faster and job gains have been able to surpass pre-pandemic levels.
It is estimated that there will be 7388,000 fewer people on leisure and hotel payrolls of businesses for July when compared the February of 2019.
The Warehouse and Messenger Sectors Surge
If you’ve been driving on the highway recently you’ve probably seen a greater number of 18-wheelers cruising the streets. The explosion of online shopping and home-delivery is behind this, along with the rise of jobs in local warehousing and messenger industries.
There’s been a rise in the number of jobs for local delivery and messengers as well as the private post office, as well as general storage and warehousing jobs. There are now an estimated 75% more delivery drivers as well as other related workers as well as 58% more warehouse or storage personnel than prior to the spring of 2020 according to the Bureau of Labor Statistics.
On contrary there are some of the largest jobs that have been lost since the time of the pandemic trade show and convention organizers as well as workers in infant/child clothing retail.
Uneven Recovery Across Race and Sex
Although job losses in 2020 have impacted Black as well as Latino people more severely then White and Asian people, employment growth for these groups has been a roaring success, and job growth is now exceeding the pre-pandemic level. The employment levels of Black males are 6% more in July 2022 when compare with February of 2020. The number of jobs for Asian males is also higher today than it was February of 2020.
This isn’t the case for White as well as Black women however. Both groups are still below their Feb.,2020, job levels, as per the BLS.
Strong Wage Gains, but Not Strong Enough
Although the rate of wage growth has been high since the spring of 2019, it was not a comparable to the rate of inflation, which soared to 40-year-highs.
Nominal compensation, which includes the earnings of other employees and benefits, have increased 8.6 percent from Q1 2020 through Q2 2022. As of mid-2021, inflation was growing at a higher rate than the overall compensation and causing the decline in real compensation since early 2021.
In a reverse of the job loss figures, rising inflation caused reductions in compensation for workers in all sectors with the exception of leisure and hospitality, which was the industry with the biggest reductions in employment. However, employees in the business and professional services sector saw the second highest real wage drop with a rate of 4.4 percent, a figure that was only beaten by construction workers.
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