Economy could recover all jobs lost during pandemic
The U.S. is on pace to recover all 22 million jobs wiped out in the COVID-19 recession as early as July, but the milestone will obscure sharp differences among industries and an economy transformed by the crisis.
Industries that have thrived during a pandemic that has kept Americans working and playing at home for long stretches – such as ecommerce, technology and professional services – already have reached or topped their pre-COVID-19 payrolls.
Computer programming is 10.3% above its February 2020 staffing level. Courier services are up by 29.6%.
Sectors clobbered by the crisis, including restaurants, theaters and spectator sports, will take longer to heal as COVID-19 fades, experts say.
Some unlikely to fully rebound
Jobs reliant on in-person shopping and previous business routines may never return to their prior peaks as COVID-19-related shifts become ingrained, experts say. Americans are increasingly working from home, shopping online and conducting business meetings and conferences via Zoom. Those trends are expected to partly reverse as the health crisis eases but won’t go away.
The number of employees at janitorial services is still 5.5% lower than it was in February 2020. Clothing store staffs are down by 15.8%. And convention and trade show organizers are off by 44%.
Industries centered on business travel, office buildings and much of brick-and mortar retail likely won’t return to pre-COVID-19 employment levels by 2025, according to a report this month by the Burning Glass Institute, which conducts research on the future of work and workers.
“The pandemic wasn’t just a business disruption,” says institute President Matt Sigelman.
“It was a force in changing both consumer behavior and business behavior.”
Total job recovery by summer
Overall, the nation lost 14.4% of its 152.5 million jobs in the spring of 2020 but is now just 0.8% below its pre-COVID-19 employment, an achievement that doesn’t account for growth in the working-age population.
But the rebound has been decidedly uneven. Of 557 industries analyzed by Burning Glass, 327, or 57%, still have payrolls below their pre-pandemic level. One in 6 is still down at least 10%, according to the research group.
By summer, when the U.S. is expected to return to pre-crisis payrolls, only about half the industries will have fully recovered, predicts Burning Glass Chief Economist Gad Levanon.
Among broader industry sectors, transportation and warehousing – think Amazon, DoorDash and UPS – leads, with payrolls already 11.6% above its previous high as it caters to a home-centered economy.
At the other end of the spectrum, leisure and hospitality – which includes restaurants and bars – has regained 6.8 million lost jobs, the most among all sectors, but it’s still 8.5% below its February 2020 level.
Some industries are beset by meager sales because of changes in how people live and work. Customer demand at restaurants, however, has surged beyond its pre-pandemic pace as Americans venture back to old routines.
Yet eateries can’t find enough workers amid lingering COVID-19-related labor shortages, delaying the industry’s recovery.
“It’s become a competition (for workers) between industries,” says economist Dante DeAntonio of Moody’s Analytics.
Worker shortages and shifts
Fields loosely considered blue-collar because they typically don’t require bachelor’s degrees – such as warehousing, restaurants, retail, manufacturing and construction – are offering big pay increases and other perks as they vie for a limited pool of workers, DeAntonio says. Many employees, he says, are still hesitant to go back to in-person work settings.
Some of those blue-collar workers are earning certificates or college degrees and switching to white-collar industries that allow them to work remotely at more flexible hours, DeAntonio says. About 55% of job changes recorded by LinkedIn last year have been from one industry to another.
DeAntonio reckons leisure and hospitality will eventually reclaim all its lost jobs, but it could take a year or more.
By spring of last year, Dallas-based La Duni Café saw sales climb 40% above its preCOVID-19 level, but owner Espartaco Borga couldn’t find workers. Most of his former servers and busboys snared gig economy jobs at Uber, DoorDash and other services that let them work as much as they wish.
“It’s impossible to compete with that,” Borga says, even though his servers can earn $75,000 to $100,000 a year. “I can’t give them a 1-hour shift, a 2-hour shift.”