US witnesses a rapid decline in labour force participation – leading macroeconomic influencers
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US witnesses a rapid decline in labour force participation – leading macroeconomic influencers

12 Jan 2021

Economists believe that the rapid fall in labour force participation since the start of the coronavirus pandemic in February, will further increase the challenge of future labour market recovery in the US.

US witnesses a rapid decline in labour force participation – leading macroeconomic influencers
Credit: FOTOGRIN, Shutterstock.com.

Economists believe that the rapid fall in labour force participation since the start of the coronavirus pandemic in February, will further increase the challenge of future labour market recovery in the US.

Claudia Sahm

Claudia Sahm, an economist, re-tweeted about the margins of slack in the US labour market during the coronavirus pandemic. According to the US Bureau of Labour Statistics (BLS), the decline in labour force participation since February is now a bigger factor to consider than the rise in temporary or non-permanent unemployment.

Although reports suggested that the US economy added 661,000 jobs in September, the number of workers on temporary layoffs declined by 1.5 million, but the number of workers unemployed for other reasons rose. In addition, approximately 3.8 million unemployed people since February reported being on temporary layoffs and would consider returning to work only after the pandemic and the lockdowns.

Reports also found that the temporary layoffs increased to 4.6 million in September, much higher than in February since the start of the Covid-19 crisis. Economists also remain apprehensive of how many temporarily laid off workers will return to their employers and when they may do so.

Linda Nazareth

Linda Nazareth, senior fellow for economics and population change at the Macdonald Laurier Institute, shared an article on the challenges and uncertainties around self-employed workers getting vaccinated in the US. For instance, janitors, nurses, midwives, and others who are self-employed in jobs that expose them to the SARs-CoV-2 infection, are looking for answers as to when they will be vaccinated, the article noted.

Most of these workers remain worried about the risk of exposure, as they have been interacting with numerous people on a daily basis.

The disparities are so wide that even state-licenced midwives have not received the Covid-19 vaccine despite frontline workers and staff being prioritised for inoculations before all other citizens.

The problem arises from the fact that these midwives are independent practitioners and are therefore neglected from the first supplies of the vaccines being prioritised for staff in hospitals and healthcare systems.

According to a study by UC Berkeley researchers, independent contractors and self-employed workers constituted 12% of California’s entire workforce. Nurses, physical therapists, and physicians who aren’t directly associated with hospitals, have posted questions online.

Edward Miguel

Edward Miguel, Oxfam Professor of Environmental and Resource Economics at the University of California, shared a video by Rachel Glennerster, a development economist, at the Zurich conference on public finance in developing countries. Glennerster shares her views on the economic consequences of Covid-19 in low- and middle-income countries.

In her opinion, there is high uncertainty around the scale of underreported deaths caused by Covid-19, especially in countries such as India. With regards to regional deaths per millions, Africa and Asia reported far fewer deaths. She also added that the trajectories of the pandemic varied by regions based on various factors such as data quality, demographic structure, comorbidities, policies, and the geography and temperature conditions.

Glennerster further added that low- and middle-income countries weren’t at a good place when the Covid-related economic shocks hit. The banking sector was in a difficult situation to weather the shocks and public finance never quite recovered with each successive shock. This led to increasing levels of debt or debt distress among these countries.