Is Covid-19 Permanently Changing Jobs?

Even while deaths during the Covid-19 pandemic keep piling up—544,000 above normal mortality trends—rising vaccination levels have economists and others speculating what the pandemic’s long term effects will be, especially in the labor market.  There’s substantial concern that the pandemic will make polarization and inequality even worse, accelerating pre-pandemic trends. In response, we will need more aggressive pro-worker policies, especially for the lowest paid.

Let’s first take a look at longer term projections. Periodically, the federal Bureau of Labor Statistics (BLS) issues a ten-year forecast of job changes—their best guess as to what jobs will increase or decline.  Although BLS knows a ten-year forecast can never be exactly right, the work presented in the Occupational Outlook Handbook, helps labor market analysts, educators, public officials, students, workers, and businesses get some idea of where jobs are headed.

The Handbook goes into great detail, showing BLS’ analysis of median pay, required entry-level education, predicted job growth, required on-the-job training, and other factors for a dizzying range of jobs.   Want to be a baseball umpire?  BLS predicts 8% job growth between 2019 and 2029 (faster than the overall 4% growth rate) for “Umpires, Referees, and Other Sports Officials,” with a median annual pay of $28,850.

In 2019, the last pre-pandemic data predicted a 5% job growth over the coming decade, an increase of 8.4 million new jobs.  Last fall, BLS updated its forecasts to take the pandemic into account, and the results are sobering, especially for lower-wage workers. 

The pandemic-induced recession of early 2020 and the slow economic recovery changed BLS estimates. In September 2020, they estimated much slower total job growth—6 million jobs between 2019 and 2029, down 2.4 million total jobs from 2019’s forecast.  BLS also foresaw an anemic annual job growth rate of 0.4%, much slower—only about one-third—than the previous decade’s 1.3%.  And total employment growth for the coming decade was now projected at 3.7%, well below the previous estimate of 5%.

The fastest-growing jobs are concentrated in health care and social services—a 14.6% increase in the decade, with over 3.1 million new jobs.  Other sectors that BLS expected to rise? Accommodation and food services (+6.2%, 881,000 jobs), professional and technical services (+10.8%, over 1 million jobs), construction (+4%, 300,000 jobs), and arts, entertainment, and recreation (+9.6%, 234,000 jobs).

The predicted slowdown in jobs from 2019 was troubling enough.  But in February, a new analysis presented additional pandemic scenarios, bringing worse news, especially for lower-wage workers.  BLS ran two forecasts adjusting their baseline data—a “moderate” and a “strong” pandemic impact.  The long-term impacts come from could be increased permanent telework and potential long-term changes in consumer and business behavior.

The new scenarios are disconcerting.  Retail jobs, forecast to decline by 2.4% in the original baseline, fall by 4.4% in the moderate scenario and 7.2 percent with the strong impact.  Travel and accommodation services go from flat (-0.3%) in the baseline to a decline of between -4.2% and -8.6%.  And food services and drinking places, which had a robust baseline growth of 7.3%, are hit hard in the pandemic scenarios—an anemic growth of 1.3% in the moderate forecast, and a -3.1% decline in the strong impact scenario.

These represent potentially big numbers.  For food and drinking places, the range of new jobs would go from +876,800 to a loss of -376,900 in the strong pandemic impact scenario, a swing of over 1.25 million jobs.  Overall, in the strong impact scenario, cashier jobs would fall by 19.8%; waiters and waitresses, -12.9%; bartenders, -13.8%; and hotel clerks, -22%.

Because of diminished overall job growth in the economy, it would be hard to absorb these losses.  It may be the economy rebounds faster as vaccinations get us to “herd immunity,” freeing pent-up demand for eating out, travelling, and entertainment.  Coupled with President Biden’s $1.9 trillion Covid-19 relief package, this pent-up demand could lessen the potential negatives in the BLS scenario.

But long-term, in any scenario, low-wage workers—disproportionately women and non-white—face a difficult future.  MIT economists David Autor and Elizabeth Reynolds believe the pandemic is accelerating trends in automation, including for more routine lower-wage jobs.  They worry that the pandemic shock may mean a looser labor market through changing commuting patterns and business travel, hitting lower-paid personal services jobs associated with those sectors.  And they think “tight labor markets no longer appear inevitable—and certainly their return is some years off” creating a troubling future for low-wage workers. 

These worrisome scenarios lead some economists to redouble advocacy for institutional changes in the labor market, ranging from a higher minimum wage, to greater unionization, to federal job guarantees, or a universal basic income.  For if the BLS basic baseline plays out, or the pandemic undermines even that modest future, then millions of workers and the economy will suffer.  That will add to inequality, political tensions, and further subpar economic performance.  We need aggressive pro-worker public policies to get us on the right path.