27 posts on "labor market"
October 9, 2024
A New Indicator of Labor Market Tightness for Predicting Wage Inflation
A key question in economic policy is how labor market tightness affects wage inflation and ultimately prices. In this post, we highlight the importance of two measures of tightness in determining wage growth: the quits rate, and vacancies per searcher (V/S)—where searchers include both employed and non-employed job seekers. Amongst a broad set of indicators, we find that these two measures are independently the most strongly correlated with wage inflation. We construct a new index, called the Heise-Pearce-Weber (HPW) Tightness Index, which is a composite of quits and vacancies per searcher, and show that it performs best of all in explaining U.S. wage growth, including over the COVID pandemic and recovery.
August 19, 2024
An Update on the Reservation Wages in the SCE Labor Market Survey
The Federal Reserve Bank of New York’s July 2024 SCE Labor Market Survey shows a year-over-year increase in the average reservation wage—the lowest wage respondents would be willing to accept for a new job—to $81,147, but a decline from a series’ high of $81,822 in March 2024. In this post, we investigate how the recent dynamics of reservation wages differed across individuals and how reservation wages are related to individuals’ expectations about their future labor market movements.
May 22, 2024
Veterans in the Labor Market: 2024 Update
Veterans constitute a significant segment of the male labor force, and understanding labor market disparities between veterans and non‑veterans is an important component of studying disparities in the economy as a whole. In a previous Liberty Street Economics post, we have shown that even relative to a group of comparable non-veterans, veterans have lower employment and labor force participation rates. One year later, we see that veterans continue to experience lower labor market attachment and the employment gap has widened, though the earnings gap has closed.
December 1, 2023
Recent Disparities in Earnings and Employment
The New York Fed recently released its latest set of Equitable Growth Indicators (EGIs). Updated quarterly, the EGIs continue to report demographic and geographic differences in inflation, earnings (real and nominal), employment, and consumer spending (real and nominal) at the national level. This release also launches a set of national wealth EGIs (which will be examined more closely on Liberty Street Economics early next year). Going forward, EGI releases will also include a set of regional EGIs, which will present disparities in inflation, earnings (real and nominal), employment, and consumer spending (real and nominal) in our region. Drawing on the just released EGIs, in this post, we present recent gender gaps in the labor market at the national and regional levels. We provide a picture of how gender wage and employment disparities have evolved since the pandemic, examining and contrasting gaps at the national and regional level. We find that the gaps between the employment rates and earnings of men and women have declined steadily following the pandemic, but have declined perceptibly more so in our region than in the nation.
Posted at 7:00 am in Demographics, Inequality, New Jersey, New York, Regional Analysis, Unemployment | Permalink
October 20, 2022
Long COVID Appears to Have Led to a Surge of the Disabled in the Workplace
Although most of those infected with COVID-19 have recovered relatively quickly, a substantial share has not, and remains symptomatic months or even years later, in what is commonly referred to as long COVID. Data on the incidence of long COVID is scarce, but recent Census Bureau data suggest that sixteen million working age Americans suffer from it. The economic costs of long COVID is estimated to be in the trillions. While many with long COVID have dropped out of the labor force because they can no longer work, many others appear to be working despite having disabilities related to the disease. Indeed, there has been an increase of around 1.7 million disabled persons in the U.S. since the pandemic began, and there are close to one million newly disabled workers. These disabled workers can benefit from workplace accommodations to help them remain productive and stay on the job, particularly as the majority deal with fatigue and brain fog, the hallmarks of long COVID.
Posted at 7:02 am in Equitable Growth, Inequality, Labor Market, Pandemic | Permalink | Comments (2)
August 4, 2022
Pandemic Wage Pressures
The recovery since the onset of the pandemic has been characterized by a tight labor market and rising nominal wage growth. In this post, we look at labor market conditions from a more granular, sectoral point of view focusing on data covering the nine major industries. This breakdown is motivated by the exceptionality of the pandemic episode, the way it has asymmetrically affected sectors of the economy, and by the possibility of exploiting sectoral heterogeneities to understand the drivers of recent labor market dynamics. We document that wage pressures are highest in the sectors with the largest employment shortfall relative to their pre-pandemic trend path, but that other factors explain most of the wage growth differentials. We suggest that one key factor is the extent of physical contact that has had to be compensated for by offering higher wages. One implication of our analysis is that, as COVID-related factors recede, sectoral imbalances could be restored from the supply side as employment recovers back toward the pre-pandemic trend.
June 30, 2022
How Equitable Has the COVID Labor Market Recovery Been?
One of the two monetary policy goals of the Federal Reserve System— one-half of our dual mandate—is to aim for “maximum employment.” However, labor market outcomes are not monolithic, and different demographic and economic groups experience different labor market outcomes. In this post, we analyze heterogeneity in employment rates by race and ethnicity, focusing on the COVID-19 recession of March-April 2020 and its aftermath. We find that the demographic employment gaps temporarily increased during the onset of the pandemic but narrowed back by spring 2022 to close to where they were in 2019. In the second post of this series, we will focus on heterogeneity in inflation rates, the second part of our dual mandate.
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.
February 9, 2021
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
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