141 posts on "Labor Market"
June 18, 2021
The Future of Remote Work in the Region
The coronavirus pandemic abruptly changed the way we work, in meaningful and potentially lasting ways. While working from home represented a small share of work before the pandemic, such arrangements became unexpectedly widespread once the pandemic struck. With the pandemic now being brought under control and conditions improving, workers have begun to return to the office. But just how much remote work will persist in the new normal? The New York Fed’s June regional business surveys asked firms about the extent of remote working before, during, and after the pandemic. Results indicate that before the pandemic, the average firm in the region conducted just a small share of its work remotely, a figure that currently stands at around a third among service firms but well below 10 percent among manufacturers. Once the pandemic is fully behind us, service firms expect double the amount of remote work than before the pandemic, though that figure is less than the share being done currently, while manufacturers expect the amount of remote work to return to where it was before the pandemic.
May 10, 2021
Women’s Labor Force Participation Was Rising to Record Highs—Until the Pandemic Hit
Women’s labor force participation grew precipitously in the latter half of the 20th century, but by around the year 2000, that progress had stalled. In fact, the labor force participation rate for prime-age women (those aged 25 to 54) fell four percentage points between 2000 and 2015, breaking a decades-long trend. However, as the labor market gained traction in the aftermath of the Great Recession, more women were drawn into the labor force. In less than five years, between 2015 and early 2020, women’s labor force participation had recovered nearly all of the ground lost over the prior fifteen years. Then the pandemic hit, erasing these gains. In recent months, as the economy has begun to heal, women’s labor force participation has increased again, but there is much ground to be made up, especially for Black and Hispanic women. A strong labor market with rising wages, as was the case in the years leading up to the pandemic, will be instrumental in bringing more women back into the labor force.
May 5, 2021
Many Small Businesses in the Services Sector Are Unlikely to Reopen
The services sector was hit hard during the COVID-19 pandemic. Small businesses were particularly affected, and many of them were forced to close. We examine the state of these firms using micro data from Homebase (HB), a scheduling and time tracking tool that is used by around 100,000 businesses, mostly small firms, in the leisure and hospitality and retail industries. The data reveal that 35 percent of businesses that were active prior to the pandemic are still closed and that most have been inactive for twenty weeks or longer. We estimate that each additional week of being closed reduces the probability that a business reopens by 2 percentage points. Moreover, an additional week of business closure lowers the share of workers that are rehired at reopening. Our estimates imply that only about 4 percent of the workers that are still laid off from the currently closed businesses will eventually be rehired.
April 14, 2021
What Is behind the Global Jump in Personal Saving during the Pandemic?
Household saving has soared in the United States and other high-income countries during the COVID-19 pandemic, despite widespread declines in wages and other private income streams. This post highlights the role of fiscal policy in driving the saving boom, through stepped-up social benefits and other income support measures. Indeed, in the United States, Japan, and Canada, government assistance has pushed household income above its pre-pandemic trajectory. We argue that the larger scale of government assistance in these countries helps explain why saving in these countries has risen more strongly than in the euro area. Going forward, how freely households spend out of their newly accumulated savings will be a key factor determining the strength of economic recoveries.
April 5, 2021
“Excess Savings” Are Not Excessive
How will the U.S. economy emerge from the ongoing COVID-19 pandemic? Will it struggle to return to prior levels of employment and activity, or will it come roaring back as soon as vaccinations are widespread and Americans feel comfortable travelling and eating out? Part of the answer to these questions hinges on what will happen to the large amount of “excess savings” that U.S. households have accumulated since last March. According to most estimates, these savings are around $1.6 trillion and counting. Some economists have expressed the concern that, if a considerable fraction of these accumulated funds is spent as soon as the economy re-opens, the ensuing rush of demand might be destabilizing. This post argues that these savings are not that excessive, when considered against the backdrop of the unprecedented government interventions adopted over the past year in support of households and that they are unlikely to generate a surge in demand post-pandemic.
Posted at 7:00 am in Banks, Crisis, Household Finance, Labor Market, Macroeconomics, Pandemic, Unemployment | Permalink | Comments (1)
February 17, 2021
February Regional Business Surveys Find Widespread Supply Disruptions
Business activity increased in the region’s manufacturing sector in recent weeks but continued to decline in the region’s service sector, continuing a divergent trend seen over the past several months, according to the Federal Reserve Bank of New York’s February regional business surveys. Looking ahead, however, businesses expressed widespread optimism about the near-term outlook, with service firms increasingly confident that the business climate will be better in six months. The surveys also found that supply disruptions were widespread, with manufacturing firms reporting longer delivery times and rising input costs, a likely consequence of such disruptions. Many firms also noted that minimum wage hikes implemented in January in both New York and New Jersey had affected their employment or compensation decisions.
February 9, 2021
Black and White Differences in the Labor Market Recovery from COVID‑19
The ongoing COVID-19 pandemic and the various measures put in place to contain it caused a rapid deterioration in labor market conditions for many workers and plunged the nation into recession. The unemployment rate increased dramatically during the COVID recession, rising from 3.5 percent in February to 14.8 percent in April, accompanied by an almost three percentage point decline in labor force participation. While the subsequent labor market recovery in the aggregate has exceeded even some of the most optimistic scenarios put forth soon after this dramatic rise, this recovery has been markedly weaker for the Black population. In this post, we document several striking differences in labor market outcomes by race and use Current Population Survey (CPS) data to better understand them.
Posted at 11:00 am in Demographics, Equitable Growth, Human Capital, Inequality, Labor Market, Pandemic, Recession, Unemployment | Permalink
Understanding the Racial and Income Gap in Commuting for Work Following COVID‑19
The introduction of numerous social distancing policies across the United States, combined with voluntary pullbacks in activity as responses to the COVID-19 outbreak, resulted in differences emerging in the types of work that were done from home and those that were not. Workers at businesses more likely to require in-person work—for example, some, but not all, workers in healthcare, retail, agriculture and construction—continued to come in on a regular basis. In contrast, workers in many other businesses, such as IT and finance, were generally better able to switch to working from home rather than commuting daily to work. In this post, we aim to understand whether following the onset of the pandemic there was a wedge in the incidence of commuting for work across income and race. And how did this difference, if any, change as the economy slowly recovered? We take advantage of a unique data source, SafeGraph cell phone data, to identify workers who continued to commute to work in low income versus higher income and majority-minority (MM) versus other counties.
Posted at 11:00 am in Demographics, Equitable Growth, Human Capital, Inequality, Labor Market, Pandemic, Unemployment | Permalink
Some Workers Have Been Hit Much Harder than Others by the Pandemic
Abel and Deitz look at the outsized impact of the COVID-19 pandemic on some workers, particularly those who are in lower-wage jobs, without a college degree, female, minority, and younger.
Posted at 11:00 am in Demographics, Employment, Equitable Growth, Inequality, Labor Market, Pandemic, Unemployment | Permalink | Comments (1)
January 29, 2021
Job Seekers’ Beliefs and the Causes of Long‑Term Unemployment
In addition to its terrible human toll, the COVID-19 pandemic has also caused massive disruption in labor markets. In the United States alone, more than 25 million people lost their jobs during the first wave of the pandemic. While many have returned to work since then, a large number have remained unemployed for a prolonged period of time. The number of long-term unemployed (defined as those jobless for twenty-seven weeks or longer) has surged from 1.1 million to almost 4 million. An important concern is that the long-term unemployed face worse employment prospects, but prior work has provided no consensus on what drives this decline in employment prospects. This post discusses new findings using data on elicited beliefs of unemployed job seekers to uncover the forces driving long-term unemployment.
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