{"id":228,"date":"2020-08-13T18:42:00","date_gmt":"2020-08-13T18:42:00","guid":{"rendered":"http:\/\/csismag.local\/?p=228"},"modified":"2020-08-13T23:00:20","modified_gmt":"2020-08-13T23:00:20","slug":"labor-market-covid","status":"publish","type":"post","link":"https:\/\/mag.csis.org\/labor-market-covid\/","title":{"rendered":"Lasting Disruption to the Labor Market"},"content":{"rendered":"\n

After positive employment trends emerged early this summer, recently released data from the Department of Labor shows that job growth slowed considerably in July. Further analysis indicates a lasting disruption to the U.S. labor market that is likely to deepen if the coronavirus is not contained.<\/p>\n\n\n

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Monthly Change in Jobs<\/figcaption>\n
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+<\/span> 9.7 million<\/div>\n
–<\/span> 22.2 million<\/div>\n
-12.5 million<\/div>\n
in 2020<\/div>\n <\/div>\n <\/div>\n
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\n \n Source: Department of Labor<\/span>\n <\/p>\n <\/div>\n <\/figure><\/div>\n\n\n

A staggering 20.7 million jobs were lost in April, marking the steepest drop in employment on record.<\/span>1<\/sup><\/a><\/span> Employers have since restored over 9 million of these jobs, but the ongoing pandemic may undercut this partial rebound. Unemployment insurance claims dropped in July but lingered well above pre-outbreak levels, while Covid-19 cases surged throughout the month. Several states that had eased lockdown measures and opened their economies early were forced to tighten restrictions to curb the spread of the coronavirus.<\/p>\n\n\n\n

The effects of the pandemic, and lockdown measures put in place to counter it, have hit the labor market unevenly. The services sector has accounted for roughly 84 percent of the total job losses this year. Over the last three months, 43 percent of those jobs have been recovered. However, much of this uptick occurred in industries that remain vulnerable to Covid-19, which Dr. Deborah Birx recently warned<\/a> had become more widespread than when the virus first appeared in the United States earlier this year.<\/p>\n\n\n\n

A prolonged nationwide outbreak could precipitate further job losses. This chart simulates the effect that a second wave of infections could have on the services sector. Use the slider to adjust the intensity of the wave.<\/p>\n\n\n

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Simulating the Effect of a Second Wave<\/figcaption>\n
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\n \n Source: CSIS, Department of Labor<\/span>\n <\/p>\n <\/div>\n <\/figure><\/div>\n\n\n

With social distancing measures leaving hotels and restaurants across the country operating at a reduced capacity, the leisure and hospitality industry has, unsurprisingly, witnessed precipitous drops and rapid rises in employment. Over 42 percent of the job growth since April occurred within the industry. Another 16 percent came from wholesale and retail trade\u2014which includes department stores and car dealerships.<\/p>\n\n\n\n

These two industries account for well over half of the recovered jobs, but they are particularly vulnerable to Covid-19. As states enact different models of reopening or are forced to implement stringent lockdown measures, job growth could grind to a halt.<\/p>\n\n\n\n

Assessing what may lay on the horizon becomes even more concerning when accounting for jobs that may never be recovered. Most people who have lost their jobs since April have been temporarily laid off and plan to return to work once the coronavirus is contained, particularly in the industries that have been the most impacted by temporary business closures.<\/p>\n\n\n

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Permanent Job Loss in 2001<\/span>, 2007<\/span>, 2020<\/span> Recessions <\/span>2<\/sup><\/a><\/span><\/figcaption>\n
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\n \n Source: Department of Labor, National Bureau of Economic Research, Calculated Risk<\/span>\n <\/p>\n

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