The nationwide lockdowns put in place to control the spread of Covid-19 in the United States this spring triggered the worst economic downturn since the Great Depression. The labor market flatlined earlier this year as the pandemic erased 22 million jobs. While the economy has already recovered more than half of them, that’s hardly enough to offset the nation’s massive job, income and wealth losses overall.
Covid-19 is in the driver’s seat of the economy. Any job market recovery is one gained on unstable ground and tethered to a pandemic that can pull back the reins of progress as long as the health crisis remains unresolved. Even if the promising new Pfizer vaccine announced this week brings the spread of Covid to a halt, the nation’s economy will have a long way to go until it recovers.
President-elect Joe Biden’s first priority must be to throw an economic lifeline to the workers whose lives have been upended by the pandemic — many with jobs that won’t be returning for years, if ever, in retail, tourism, personal services and entertainment.
In early summer, jobs cruised back as temporarily laid-off workers were rehired or reentered the workforce. But as the pandemic continues, any temporary layoffs risk becoming permanent as restaurants and retailers run out of cash and fold. Lockdowns aren’t to blame. The United States hasn’t locked down en masse for months, but the monthly pace of job gains is still slowing down as Covid-19 cases soar.
What’s more, Covid-wary consumers are still shifting their spending toward contactless e-commerce shopping. That means retail, entertainment and other industries that rely on travelers and foot traffic are still experiencing double-digit declines in job postings from a year ago. Millions of Americans typically earn extra pay from temporary seasonal jobs starting this month, but Glassdoor analysis shows holiday hiring is down 8% from a year ago. This month, two major mall owners accounting for about 130 retail properties filed for bankruptcy, taking millions of dollars of holiday pay for lower-income Americans in the process.
Already growing for generations, the nation’s economic divide skyrocketed during the pandemic as low-income workers in tourism, food services and retail faced massive layoffs from already low-paying jobs. The option to work from home has been a saving grace that has protected high-income tech and professional jobs. But that’s a life raft unavailable to millions of Americans in lower-skilled roles. According to recent research, only 37% of US jobs can ever be done fully at home.
While the outlook appears bleak, there are some ways a Biden administration can help get America’s job market back on track when Covid ends:
It will take fresh thinking to get Americans back to work. Free online courses for tech skills alone won’t cut it. Companies and colleges have an opportunity to transform how they collaborate in the coming decade and forge paths from today’s destroyed jobs to new emerging jobs of the future.
Research from decades of academic studies shows how to do this right: The best worker retraining programs are local, connect to individual employers, involve companies in designing the training and target graduates for specific in-demand roles. That’s a proven model programs like the Center for Employment Training have followed for years.
The federal government can play an important role in making this model into a national norm for worker retraining. Washington sent about $720 billion in grants to states last year, but just 9% went to programs like worker training and education. Giving this approach a federal boost will be essential for rebuilding America’s job market after Covid-19.
No plan to revive the economy after Covid-19 can ignore an unfortunate reality: Women, who are often saddled with primary caregiving responsibilities, have also been disproportionately harmed by Covid-19 as they are the backbone of the hard hit retail and hospitality industries. That combination of layoffs and child care demands led 617,000 women to leave the labor force in September alone, about eight times more than the number of men.
Rebuilding the economy after the pandemic means bringing women back into the workforce, and offers America the chance to reimagine child care, and make a real push toward universal preschool programs.
A number of studies have shown that universal preschool boosts educational attainment, employment and wages for children who are enrolled for decades afterward. Universal preschool would also provide much-needed child care to help today’s unemployed women return to work. It would also combat intergenerational inequality by giving the nation’s poorest children a huge head start in life.
As long as Covid-19 is in the economy’s driver’s seat, we’ll all be passengers on an unpredictable economic ride. But while we may not have the wheel, we do have a map. It’s time to plan now for how to heal the nation’s economy once this pandemic is behind us. Old ways of thinking about stimulus, bailouts and tax changes won’t cut it. Let’s use this crisis to rebuild a healthier, more equitable and resilient economy and workforce.
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