What to watch on jobs day: Who has been hurt by the pandemic recession—and why we should ignore wage growth for now
On Friday, the Bureau of Labor Statistics (BLS) will release its latest jobs report on the state of the labor market for February 2021, exactly one year since the labor market peak before the pandemic recession hit. Overall, the labor market is down 9.9 million jobs since February 2020. And if we count how many jobs might have been created if the recession had not hit—a more appropriate counterfactual for the current hole we are in might be average job growth over the 12 months before the recession (202,000)—we are now short 12.1 million jobs since February 2020.
In this jobs day preview post, I remind readers which sectors are still experiencing the greatest shortfalls in jobs, which demographic groups have been hardest hit, and which metrics we should continue to ignore in this unusual recession.
Leisure and hospitality workers remain the hardest hit in the pandemic recession, with a 3.9 million job shortfall since February 2020 (as shown in Figure A). These losses are particularly devastating for leisure and hospitality workers and their families because they are among the lowest-paid workers in the U.S. economy.
The second-largest shortfall is in the government sector. As of January, public-sector employment was down over 1.3 million jobs since February 2020. These employment losses were entirely in state and local government jobs, and nearly three-quarters of those losses were in public state and local education jobs, which are down nearly 1 million.
As vaccine production and distribution picks up, I hope that many of the private-sector jobs will bounce back as social distancing relents, but given that state and local governments face many new expenses in figuring out how to open schools safely (e.g., HVAC, smaller classrooms, perhaps additional bus trips as student groups are staggered, etc.), it is imperative that additional aid be provided to state and local governments so that new costs won’t squeeze out necessary hiring. As my colleague Josh Bivens writes, the projected state and local revenue shortfalls may be shrinking, but the value of substantial federal aid to state and local governments is not.
Employment change by industry since February 2020: All employees (thousands), seasonally adjusted, August 2021
|Industry||Employment change since February 2020|
|Leisure and hospitality||-1,699.0|
|Education and health services||-905.0|
|Professional and business services||-468.0|
|Mining and logging||-46.0|
|Transportation and warehousing||21.9|
Source: Bureau of Labor Statistics' (BLS) Current Employment Statistics, Establishment Survey (CES) public data series.
Now let’s turn to who has been hardest hit from a demographic perspective. Much has been written about the losses in women’s employment over the course of the recession, losses that are due in part to both occupational segregation (i.e., women are disproportionately more likely to hold lower-wage service-sector jobs) and caretaking responsibilities (i.e., closed schools, limited day care options, and caregiving responsibilities for other family members in general).
In Figure B, it is clear that women have borne the heaviest burden in job losses in this recession. In the Current Population Survey—the survey that allows us to make further demographic cuts—47.0% of workers were women.1 And yet, as of January 2021, women have experienced 51.7% of job losses. You can see the opposite phenomenon for men in the figure below: more jobs and fewer job losses.
It is clear that women were disproportionately hit, but looking just at the overall numbers for women masks important differences by race and ethnicity. In February 2020, Black women’s share of employed workers was 6.7%, but they have experienced 11.2% of job losses since then. Similarly, Hispanic women’s share of employment in February 2020 was 7.7%, but they have experienced 12.7% of job losses. On the other hand, white women experienced job losses in proportion to their share of the workforce.
As the public sector continues to lose jobs, it is important to note that these jobs are disproportionately held by women and Black workers, so unless state and local governments receive crucial aid, we will continue to see more job losses among women and Black workers. As we continue to watch the labor market devastation, we need to pay attention to these disproportionate effects in providing relief and recovery. The pandemic recession only magnified the cracks in the labor market—we need to not just get back to the “before times” but also continue to work to narrow preexisting employment and pay gaps.
Black and Hispanic women experienced the most significant and disproportionate job losses in the pandemic recession: Employment shares in February 2020 and share of job losses as of January 2021
|Employment shares in February||Share of job losses since February|
Note: Data are for workers 20 years and older.
Source: EPI analysis of Bureau of Labor Statistics Current Population Survey public data series.
The last thing I want to highlight is what not to watch when the latest employment situation report comes out on Friday. I know you might be surprised to hear me say this, but do not pay attention to the published numbers on nominal wage growth from the establishment survey. Wages have grown tremendously fast in the last year—but not for the right reasons.
As my colleague Jori Kandra and I discuss in EPI’s latest State of Working America installment, wages grew largely because more than 80% of the 9.6 million net jobs lost in 2020 were jobs held by wage earners in the bottom 25% of the wage distribution (as shown in Figure C). The exit of 7.9 million low-wage workers from the workforce, coupled with the addition of 1.5 million jobs in the top half of the wage distribution, skewed average wages upward. The sad truth is that most workers are still suffering from a relatively weak bargaining position that prevents them from securing pay raises sufficient to make up for decades of slow wage growth.
Lowest-wage workers lost nearly 7.9 million jobs, while the highest-wage workers gained nearly a million: Employment change from 2019 to 2020, by wage level
|Wage quartile bin||Employment change (actual)||Employment change (if proportionate)|
Notes: Wages adjusted for inflation using the CPI-U-RS. Employment changes in blue are calculated between 2019 and 2020 in the quartiles set by the 2019 data. Red dots reflect employment changes in 2020 if they were proportionate to the 2019 employment shares. A small amount of noise was added to the wage data when setting wage quartiles to minimize clumping at particular values to ensure equal bin size.
Source: Authors' analysis of Current Population Survey Outgoing Rotation Group microdata.
1. This should not be confused with the fact that women held 50% of payroll jobs. The difference is due to different jobs that are in each survey (such as including farmworkers and those who are self-employed in the household survey but not the establishment survey) as well as the counting of multiple job holders, which would be counted only once in the household survey but multiple times in the establishment survey.
Enjoyed this post?
Sign up for EPI's newsletter so you never miss our research and insights on ways to make the economy work better for everyone.