Remember the “she-cession”? What about the wave of early retirement, or America’s army of quiet quitters?
For economists and other forecasters, the pandemic and post-pandemic economy has been a lesson in humility. Time and again, predictions about ways in which the labor market was permanently changed have proven temporary or even illusory.
Women lost jobs early in the pandemic but returned in record numbers, making the retreat a short-lived phenomenon. Retirements have increased along with coronavirus deaths, but many older workers have returned to the job market. Even the person credited with provoking a national conversation by posting a TikTok video about doing the bare minimum at your job has suggested that “quitting quietly” might not be the way of the future – he likes it. leaving out loud these days.
That doesn’t mean nothing has changed. In a historically strong labor market with very low unemployment, workers have much more power than is typical, so they are earning better wages and new benefits. And a shift to working from home for many white-collar jobs is still reshaping the economy in subtle but important ways.
But the big takeaway from the pandemic recovery is simple: the US labor market has not been permanently worsened by the hit it has suffered. It echoes the aftermath of the 2008 recession, when economists were similarly skeptical of the labor market’s ability to rebound — and were similarly proven wrong once the economy strengthened.
“The profession has not fully digested the lessons of the Great Recession recovery,” said Adam Ozimek, the chief economist at the Economic Innovation Group, a research organization in Washington. One of those lessons, he said: “Don’t bet against the American worker.”
Here’s a rundown of the labor market stories that rose and fell during the pandemic recovery.
True but Over: The “She-Give”
Women lost jobs in large numbers early in the pandemic, and people worried that they would remain. worse in the labor market – but that did not prove to be the case.
After the pandemic, employment actually recovered faster among women than men — so much so that, as of June, the employment rate for women in their prime working years, usually defined as 25 to 54, was the highest on record. (Employment among older men is back to where it was before the pandemic, but is still shy of a record.)
Away: Early Retirements
Another common story early in the pandemic: It would cause a wave of early retirements.
Historically, when people lose jobs or leave them late in their working lives, they tend not to return to work – effectively retiring, whether or not they labeled it that way. So when millions of Americans in their 50s and 60s left the workforce early in the pandemic, many economists were skeptical they would ever return.
But the wave of early retirement never really materialized. Americans between the ages of 55 and 64 returned to work as quickly as their younger peers and are now employed at a higher rate than before the pandemic. Some may have been forced back to work due to inflation; others always planned to return and did so as soon as it felt safe.
The retirement story wasn’t entirely wrong. Americans who have passed traditional retirement age — 65 and older — still haven’t returned to work in large numbers. That helps shrink the size of the overall labor force, especially as the number of Americans in their 60s and 70s grows rapidly as more baby boomers hit their retirement years.
Questionable: The White Collar Recession
Technology layoffs at large companies have prompted discussion of a white collar recession, or one that primarily affects affluent technology and information-sector workers. While those firings were undoubtedly painful for those who experienced them, it did not show up prominently in overall employment data.
Currently, the nation’s highly skilled workforce seems to be mixing new and different jobs quite quickly. Unemployment remains very low for both information and professional and business services – typical white-collar industries that comprise much of the technology sector. And layoffs in tech have slowed recently.
Nuanced: The Missing Men
It looked for a while that young and middle-aged men — those between about 25 and 44 — weren’t returning to the labor market the way other demographics were. Over the past few months, however, they have finally regained their pre-pandemic employment rates.
That recovery came much later than for some other groups: For example, 35- to 44-year-old men have yet to consistently maintain employment rates that match their 2019 average, while last year women in that age group eclipsed their employment rate before the pandemic. But recent progress suggests that even if men take longer to recover, they are slowly making gains.
False (Again): The Job Market Won’t Fully Bounce
All of these stories have a common thread: While some cautioned against jumping to conclusions, many labor market experts were skeptical that the labor market would fully recover from the shock of the pandemic, at least in the short term. Instead, the rebound was swift and wide, defying grim stories.
This is not the first time economists have made this mistake. It’s not even the first time in this century. The crippling recession that ended in 2009 pushed millions of Americans out of the workforce, and many economists have embraced so-called structural explanations for why they have been slow to return. Perhaps workers’ skills or professional networks have eroded during their long periods of unemployment. Maybe they were addicted to opioids, or drawing disability benefits, or trapped in parts of the country with few job opportunities.
In the end, however, a much simpler explanation turned out to be correct. People slowly returned to work because there were not enough jobs for them. As the economy recovered and opportunities improved, employment rebounded among nearly all demographic groups.
The rebound from the pandemic recession happened much faster than the one that followed the 2008 downturn, which was exacerbated by a global financial boom and housing market collapse that left long-lasting scars. But the basic lesson is the same. When jobs are plentiful, most people will go to work.
“People want to adapt and people want to work: Those things are generally true,” said Julia Coronado, the founder of MacroPolicy Perspectives, a research firm. She noted that the pool of available workers is increasing over time and amid solid immigration. “People are resilient. They figure things out.”