Among the report’s scariest signs? The share of Americans working or looking for work, known as the labor-force participation rate, declined among prime working ages (25-54) in September.
The drop was driven by plunging participation rates among women, just as the school year went into full swing in much of the country.
Of the nearly 1.1 million people who stopped working, or looking for work, in September, almost 80 percent were women. Many economists say it’s a clear sign of the child-care burden falling mainly on working mothers.
Mothers like April Smith are facing impossible decisions, as they must choose between earning money during an unprecedented economic crisis, and staying home to shepherd their children through chaotic virtual classes.
Smith, 31, is a single mother of three kids in school. She lost her restaurant job in Louisiana in March and later learned it was a permanent layoff: the restaurant won’t be reopening. Her family is surviving on $93 a week in unemployment. Smith is behind on rent and owes close to $500 in utilities, putting her in danger of losing electricity.
In recent weeks, she stopped looking for work. She’s struggling to manage her children’s classes, and she said she was feeling discouraged by how few jobs are available. Her kids alternate between in-person schooling and virtual learning from home. Smith decided to enroll in an online training course herself to become a phlebotomist.
“I’m barely making it right now,” Smith said. “I’m hoping the health-care field will be better.”
Early on in the crisis, the vast majority of workers believed their layoffs would be temporary. But more workers like Smith are learning their jobs are gone for good. The ranks of the permanent job losers has more than tripled since the crisis began, and economists predict the ultimate damage could be as bad as the Great Recession.
Each of those job losers will have to find a new employer or, like Smith, even a new line of work; all while wrestling with the daily reality of life amid a global pandemic. This prolonged unemployment and time-consuming and expensive retraining will only serve to slow the U.S. recovery.
“With permanent job losses clearly rising … the struggles will become more widespread and evident,” said Seema Shah, chief strategist at Principal Global Investors in a note to clients. “Economic scarring is likely to become more apparent in the fourth quarter as more companies finally start to throw in the towel, reporting closures and job cuts.”
Black workers’ struggles intensify
Before this jobs report, The Post published an analysis finding that Black men and women had been left behind in the economic recovery. September’s numbers made it clear that bad situation is getting worse.
Black men and women have recovered barely a third of the job losses they suffered when so many businesses closed in the spring, even as White men and women have seen 60 percent of jobs return.
Centuries of discrimination pushed Black Americans directly into the path of this economic crisis. Black men and women have been systematically excluded from white-collar employment, according to Bucknell University’s Nina Banks. Many had found work in the low-paying service sector, as well as the public sector, where discrimination is limited by legislation.
Both sectors have been hammered by the coronavirus. The service sector went down first, but in September evidence strengthened that the public sector is also suffering.
“This is really a big city recession. It’s a service sector recession and a big city recession. It’s low-income workers in downtown areas who are having the hardest time,” said Julia Pollak, chief economist at ZipRecruiter. “I worry women in janitorial services, office managers, transit and bus drivers and cafeteria workers ― all those jobs are not going to be coming back from quite a while.”
A public sector slide
Another red flag for the economy is the industries that are still struggling to get back to anything close to normal.
Of 14 major industry sectors, all remained below their precrisis employment levels, and two lost significant ground in September. Employment fell in government and educational services, bearing out dire warnings about cuts in the public sector.
House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin are trying to agree on more aid for the economy, potentially including money for state and local governments. Democrats have pushed for hundreds for billions of dollars to help cities and states that have lost tax revenue during the crisis, so they don’t have to lay off more workers before the end of the year. Negotiators are closer to making a deal.
Education jobs in state government, such as those at public universities, shrank by about 50,000, hitting their lowest level since the pandemic began. But that milestone was overshadowed by losses in local-government education jobs, which fell by 231,000.
As in the Great Recession, budget constraints have forced state and local governments to slash employment. Without aid, these cutbacks could intensify the recession and prolong the recovery.
“We are at risk of making the same mistakes we did during the great financial crisis, which is not moving swiftly enough and robustly enough to make sure state and local governments can continue to function without having to lay off teachers, firefighters and police officers,” said Joseph Brusuelas, chief economist at audit firm RSM.
As the public sector’s struggles grow, the pain remains deep in the hospitality sector, and that’s unlikely to change until the virus is no longer a threat.
Restaurants, bars and other hospitality jobs were by far the hardest hit in the spring after state and local authorities limited how many people could be in the same place at the same time. Despite some gains, the hospitality sector still has 2.3 million jobs that have not returned, the most of any industry.
The bottom line, many economists say, is the recovery is fragile and this is the time to add support, not take it away.