What to watch on jobs day: Who has been hurt by the pandemic recession—and why we should ignore wage growth for now

by nyljaouadi1
0 comment

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, January 2021

Industry Employment change since February 2020
Leisure and hospitality -3880
Government -1327
Education and health services -1325
Professional and business services -825
Manufacturing -582
Other services -463
retail trade -383
Wholesale trade -263
Construction -256
Information -242
Transportation and warehousing -163.7
Financial activities -93
Mining and logging -81
Utilities -8.3
ChartData Download data

The data below can be saved or copied directly into Excel.