‘With growing COIVD-19 cases and falling employment, the incoming Biden administration will be facing a mounting — not waning — crisis.’
In November, the number of job openings softened to 6.5 million from 6.6 million the previous month, according to the Bureau of Labor Statistics released this month, while hires were essentially unchanged, increasing to 5.98 million from 5.91 million. Layoffs rose to 2 million from 1.7 million on the month.
This increase was described Tuesday as “troubling” by the Economic Policy Institute, a progressive think tank. “The latest congressional relief bill is an important step toward addressing some of this pain, but it is not at the scale of the problem. I’m hopeful that more relief measures are on the horizon for increasingly desperate workers and their families. Senate Republicans forced the December bill to be far too small,” said Elise Gould, senior economist at the EPI.
“The U.S. economy is seeing a significantly slower hiring pace than we experienced in May or June — roughly where it was before the recession, which is a big problem given that we have only recovered just over half of the job losses from this spring,” the EPI said. “And job openings are now substantially below where they were before the recession began.”
There were 10.7 million unemployed workers, but only 6.5 million job openings in November. “This translates into a job seeker ratio of about 1.6 unemployed workers to every job opening,” Gould said, “or for every 16 workers who were officially counted as unemployed, there were only available jobs for 10 of them. That means, no matter what they did, there were no jobs for 4.2 million unemployed workers.”
The Bureau of Labor Statistics data only covers through November, so is likely rosier than the actual jobs landscape, according to EPI. “It doesn’t even capture December’s job losses, which were substantial. With hiring and job openings at these levels, the economy is facing a long, slow recovery without additional action from Congress,” Gould added. The job losses, thus far, have been concentrated in the services sector, signaling a two-tired economic and jobs recovery.
The White House pointed to states’ efforts to contain the coronavirus and shuttering of businesses as the reason for the job losses in a statement released Monday. “Leisure and hospitality industry has been generally more susceptible to changes in the prevalence of COVID-19 than other industries, reflecting the regressive nature of government-mandated closures and the reduction in economic activity that occurs when individuals are subject to and make decisions based on these restrictions,” it said.
“As witnessed in the early days of the pandemic, employment in the leisure and hospitality industry fell by almost 50% between February and April, while employment in all other industries fell by a much smaller but still substantial 10%,” the White House added. It added that, with the reopening of businesses and rollout of the COVID-19 vaccine, “Employees in the leisure and hospitality industry are those most likely to see employment gains as a result.”
But people are, of course, suffering economically. At the height of the pandemic in March, more than 30 million Americans were laid off or furloughed when the economy shut down to curb the spread of COVID-19. The unemployment rate at that point was 14.7%; it has since come down to 6.7%. The leisure and hospitality industries have been particularly hit hard by the pandemic.
U.S. bars and restaurants got crushed again in December. Eating and drinking establishments lost 372,000 jobs last month, marking the first decline since April, when they laid off a whopping 5.4 million people, according to separate data released last week. California and New York have limited restaurant hours of operation, restricted the number of customers or bar indoor dining altogether.
The Dow Jones Industrial Average
and Nasdaq Composite
had a tumultuous 2020, but they opened higher Tuesday as investors weighed the likelihood of a more generous stimulus under incoming President Joe Biden amid increased risk of more political unrest after the siege on the U.S. Capitol by supporters of President Donald Trump last week.
The Dow ended 2020 up 7%, while the S&P 500 closed out the year up 16%, and the Nasdaq ended 2020 up 43%.