“Job Market’s 2.6 Million Missing People Unnerves Star Harvard Economist,” (msn.com), Ben Steverman Originally in a comment in this post Discussion on Solutions to Social Security, Angry Bear. The number I had originally calculated was ~2.6 million people joining the Civilian Labor Force. I had said: Since you addressed me, what group is dropping out of the Civilian Labor Force? “To get back to what the Participation Rate was in 2020, 2.0 million people would have to join the Civilian Labor Force. We have plenty of room for more Labor.” I had rounded this down from 2,680,252 million people to 2,000.000 people joining the Civilian Labor Force. Bloomberg has the original article out as of the last day; “US Labor Shortage Rattles
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“Job Market’s 2.6 Million Missing People Unnerves Star Harvard Economist,” (msn.com), Ben Steverman
Originally in a comment in this post Discussion on Solutions to Social Security, Angry Bear. The number I had originally calculated was ~2.6 million people joining the Civilian Labor Force.
I had said: Since you addressed me, what group is dropping out of the Civilian Labor Force?
“To get back to what the Participation Rate was in 2020, 2.0 million people would have to join the Civilian Labor Force. We have plenty of room for more Labor.”
I had rounded this down from 2,680,252 million people to 2,000.000 people joining the Civilian Labor Force.
Bloomberg has the original article out as of the last day; “US Labor Shortage Rattles Harvard Economist as 2.6 Million Workers Sit Out,” Bloomberg.
Behind the five-decade low US unemployment rate of 3.5% lies a 2.6-million-person mystery.
That’s roughly how many more Americans should be working or looking for jobs if the economy’s labor force participation rate was the same as before the Covid-19 pandemic. But something’s still off, leaving everyone from mom-and-pop businesses to Federal Reserve economists scrambling to answer a crucial question: Where are these workers?
So who is missing out of the Civilian Labor Force? According to Economist Raj Chetty at Harvard University’s Opportunity Insights lab:
The US is missing about a fifth of its pre-pandemic low-income workforce. At least some of those workers moved to higher-paying jobs, but, after adjusting for wage growth, researchers found employment for the poorest quarter of the workforce was still 13.5% below pre-pandemic levels at the end of 2021.
Plotting low-wage employment on a graph by county, the highest-rent areas are missing the most workers — the places where bars, restaurants and health clubs were most empty in 2020. BLS Household Numbers;
As it turns out (and reported), the hardest-hit businesses are found in the richest neighborhoods. In areas like Boston’s Back Bay, New York’s Upper West Side and Brentwood in Los Angeles. The pandemic and its aftermath have thrown the lives of millions of lower income employees into chaos. These employees are the ones who once waited on the wealthy in restaurants, bars, gyms and hair salons.
The pandemic created a divide between the professional class where many of their occupations could be done remotely as opposed to those in lower-income jobs (retail and hospitality) requiring in-person interaction.
The highest-rent areas are missing the most workers who were manning the bars, restaurants and health clubs most empty in 202o. Many of those workers moved to places they didn’t have to commute one hour each way to get to work.
The US once led the world in the proportion of women who worked. But today, many developed nations surpass the US in their labor force Participation Rate for women. The share of both men and women in the American workforce has been dropping since the turn of the century. Much of what is missing in support of them (important for lower income families) is Childcare subsidies, paid sick and family leave, and access to part-time work. All of which would lower the job barriers for parents and other caregivers, older workers and people with disabilities.
A lot going on here and playing out as people adjust to an era of continuing pandemics of varying strengths and sizes. “Job Market’s 2.6 Million Missing People Unnerves Star Harvard Economist,” (msn.com). Not sure why this unnerves this economist, we have seen this phenomenon several times now. Those sitting it out may yet come back if the US can get greater control over the pandemic and the need for vaccinations.
PS: I did not recalculate U3 (Unemployment Rate) by adding in the 2 million or 2.6 million people not included in the Civilian Labor Force. I did do this in 2001 and 2008. You can do such, the unadjusted numbers needed are in the Excel spreadsheet chart above.