What are Experts on Camera?
Millions of jobs – particularly in certain industries, such as hospitality and manufacturing – are going unfilled across the country, even as millions of people are seeking work.
On August 4, 2021, SciLine interviewed: Dr. Kathryn Anne Edwards, an economist at the RAND Corporation, where she studies labor economics. She spoke about topics including: factors driving the current seemingly incongruous patterns in the labor market; the short-term and long-term prospects for businesses that are currently struggling to fill positions; and how the high rate of job openings is affecting workers and job seekers.
Interview with SciLine
KATHRYN ANNE EDWARDS: Hello. My name is Kathryn Anne Edwards, and I am a labor economist for the RAND Corporation.
How has the COVID-19 pandemic impacted the U.S. labor market overall?
KATHRYN ANNE EDWARDS: We are living through a labor market that is both historic and unprecedented. Never has the health concerns of individuals or the public health concerns of communities had such a large and palpable effect on our labor market. At the same time, we have never seen wide, broad closures of in-person instruction for school and the effect that that can have on our labor market. And at the same time, we have seen an absolutely impressive and large effort from the federal government to stabilize family incomes during this rather tumultuous and unpredictable time period. And those three things in combination are incredible considering that even alone the labor market doesn’t have relevant or recent experience with them.
How is it possible for so many jobs to go unfilled at the same time as so many people are seeking work?
KATHRYN ANNE EDWARDS: Well, having people seeking work and having jobs being unfilled, it’s important to remember that the goal for those numbers in our economy isn’t really zero, right? We’re not looking for some benchmark of there are no more unemployed workers or there are no more job openings. We have a very dynamic labor market of over 155 million workers, and it is expected that we have unemployment and unfilled positions at any time. So that makes it difficult to discern when there’s necessarily a problem and when we have too many openings relative to too many unemployed workers and what that means at any given time.
Can you give an example of how this plays out?
KATHRYN ANNE EDWARDS: You are not unemployed unless you are actively seeking work. So this would be the difference of, say, a retiree who has no intention of working again versus someone who is, you know, applying for a job every week. But during recessions the difference between those who want to work and are actively looking for work versus those who aren’t, they always get the same kind of splits a little bit because let’s say I look for jobs one week and I apply to every job that I’m qualified for on LinkedIn or on Indeed or any service, and then I wait to hear back if I’ve, you know, got an interview or any type of interest. I could wait more than a month, in which case I’ve fallen out of the labor market because I’m no longer actively looking. And then I’ll apply again after those don’t work. So we would say coming out of a recession, you know, as unemployed numbers increase, it’s often an indicator of people trying to get back into a job.
Does unemployment insurance, including COVID economic relief benefits, contribute to the number of unfilled positions?
KATHRYN ANNE EDWARDS: Let’s say, for example, that I used to work as a manager of a restaurant and I was laid off last April and I have unemployment insurance because I lost my job through no fault of my own, and now my restaurant is hiring again. I have three kids at home, and I live with my mother, who is immunocompromised, or I just live with my mother, and I’m afraid that she’s – because she’s older she’s at higher risk of the delta variant. Because I have unemployment insurance, I’m able to get by and not get another job. Now, what is causing me to not enter the labor force? Is it COVID, pandemic, the risk of, you know, reinfection to my children who are unvaccinated, or is it unemployment insurance? So likely it’s the case that it’s, you know, it’s COVID, right? We’re still in a pandemic. People are still at risk, and people are still dying at incredible rates. But unemployment insurance might be the enabler for people to protect themselves, that without which they would have to, you know, kind of be forced to give themselves more exposure to the virus.
How has the availability of child care and in-person school affected parents’ participation in the labor force?
KATHRYN ANNE EDWARDS: In any recession, people leave the labor force. So you lose your job, you get laid off, and there aren’t a lot of jobs open, so you just – you stop searching or you’re going to sit out the labor market for a while. That happens every recession. And we see a labor force decline. Women in particular were hit very hard at the start of the pandemic because of the jobs they typically hold in education and health and in leisure and hospitality. So they saw larger job losses initially. When it comes to the child care constraints – right? – there’s two things that could be happening. Either you have people who are already laid off, who had already lost their job who then have a child care constraint and don’t go back into the labor market until that constraint is solved, or you have people who actually somehow reduce their labor in order to meet their child care concerns.
How many women have either given up their jobs for child care while school is out or shifted to part-time work?
KATHRYN ANNE EDWARDS: We don’t have a great ability to measure either group that well. And, in fact, on the being pushed out of the labor force side, we only see a full exit, right? We can’t measure the number of women who have taken a lower-paid position, have moved to part-time, who maybe went on a different track of their employer or switched to a less demanding job or all the many concessions that a woman could take in order to provide part-time to full-time child care for their children. All we really see are overall labor force participation rates of women with and without children. But to the extent that we can try to interpret those, the indication would be that at any point in the pandemic, 1 million to 2 million women had left the labor force because of child care needs, either leaving from a place of unemployment or leaving from a place of employment.
What is it going to take for the labor market to stabilize?
KATHRYN ANNE EDWARDS: It’s important to keep the fundamentals in mind as we are recovering from this pandemic. We have a very strong economy, a very strong labor market, and the uncertainty that we’re dealing with has means of mitigation. And while we can spend a lot of time thinking about and talking about what are particular workers’ incentives at any moment – is this job paying enough? Do they want to take it? Is their unemployment insurance benefits too high? Do they have child care? All of these questions are very relevant but ultimately secondary to, is the pandemic contained, and are people safe? And I cannot reiterate enough how important vaccination and eradication are for the ultimate labor market recovery that we are hoping for. And we can get there piecemeal, but in a way, that’s less effective and less efficient the longer the pandemic drags on. And so this type of, you know, almost like he said, she said between workers and employers of, is the job good enough, does it pay enough, are benefits too high – we should not have to have this conversation, you know, if we had less of a health concern from a pandemic that is still infecting and killing Americans.
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