Opinion: Fewer people are working in schools and local government than before the pandemic — but temp agencies are hiring plenty


Although the recovery in production, wealth and hours worked has been remarkable since February 2020, the US economy remains deeply affected by the COVID-19 pandemic.

The total number of hours worked in the non-agricultural economy finally exceeded the total before the pandemic in April, the Bureau of Labor Statistics reported on Friday. But the number of jobs is still short of 1.2 million, including 500,000 private sector jobs.

Details: The US gets 428,000 jobs in April and wages rise again, but labor is shrinking

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Companies say they have difficulty filling open positions because the workforce growth has been weak as more people retire, take on care responsibilities at home, or avoid unsafe or unrewarding jobs.

Month: The only bad thing about the April employment report might not be that bad after all

The main effects of the pandemic can be clearly seen in a sector-by-sector view where employment has risen or lagged behind since the February 2020 employment report, the last before the pandemic blocked the ‘economy. Many occupations that require personal face-to-face contact have been weakened to recover from the pandemic shock.

But other sectors have increased hiring to meet changes in labor and consumption patterns, especially in transportation and storage, including last-mile deliveries.

Travel has hit hard

Travel-related work has been the hardest hit. Occupancy in accommodation (such as hotels) has fallen by 19% (or 404,000 jobs) from pre-pandemic levels. Employment in travel agencies is down 31% (69,000 jobs).

Employment in food and beverage services has recovered slightly better, with employment falling “only” by 6.4%, but this means the disappearance of 794,000 surprising jobs.

The other part of the leisure and hospitality supersector is art, entertainment and leisure, where employment fell by 240,000, 9.6%.

Surprisingly, a massive public health disaster has led to a decline in employment in health care and social services. Before the pandemic hit in early 2020, it had been one of the fastest growing sectors. In April, employment in health and social services fell by 377,000 jobs (1.8%).

Education has also been hit hard by the pandemic. Employment in public and private education has fallen by 382,000, mostly in local public school districts, where employment has fallen by 3.9%.

Local governments have lost 278,000 more jobs outside of education, more than 4% of their workforce. This represents the majority of the 340,000 non-educational jobs lost by federal, state and local governments.

Change towards durable goods

One of the most important consequences of the early stages of the pandemic was a massive shift in consumption toward durable goods and away from services. People furnished their homes and bought vehicles instead of traveling and going to the movies.

At the same time, supplies of many goods were compressed by broken supply chains. Many manufacturers had to limit production due to lack of inputs, including skilled labor. The resulting gap between demand and supply led to an unusual rise in the prices of durable goods.

Despite much talk of contracting production in America, U.S. durable goods manufacturers have lost 105,000 jobs (1.3%) during the pandemic, most of them in aerospace, where the demand recovered slowly.

Employment in non-durable manufacturing increased 46,000 (1%), led by food, chemicals and plastics.

Strong demand for goods increased retail employment by 284,000 (1.8%), led by large retailers, grocery stores, building and gardening suppliers, and non-store retailers.

Demand for shipping and delivery services increased. Employment in transport and storage increased by 674,000 (11.6%). Courier jobs rose by 30%, while jobs at tourism companies fell by 26%.

Boom in professional services

The largest increases in employment occurred in the largest sector: professional and business services, where employment increased by 738,000, 3.5%. About a third of the jobs were in temporary employment agencies. Professional services, such as legal, accounting, engineering, technical and scientific, increased by 643,000, 6.6%. Management jobs were reduced by 58,000.

With monthly earnings of more than 500,000 jobs over the past six months, the 1.2 million job deficit is likely to clear up soon, except for one major disaster.

But even once that happens, the American workplace will never be the same.

Rex Nutting has been covering the economy for MarketWatch for over 25 years.

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