America's unemployed are sending a message: They'll go back to work when they feel safe - and well compensated

America's unemployed are sending a message: They'll go back to work when they feel safe - and well compensated

The anemic September employment report, with only 194,000 jobs added, illustrates the extent to which the recovery stalled as coronavirus cases surged last month, but it also signals something deeper: America's unemployed are still struggling with child-care and health issues, and they are reluctant to return to jobs they see as unsafe or undercompensated.

For months, economists predicted a surge in hiring in September as unemployment benefits expired for millions of workers and schools reopened across the country. Instead, last month marked the weakest hiring this year, and an alarming number of women had to stop working again to deal with unstable school and child-care situations.

 

 

The numbers are striking: 309,000 women over age 20 dropped out of the labor force in September, meaning they quit work or halted their job searches. In contrast, 182,000 men joined the labor force, Labor Department data showed.

The simplest explanation for the mediocre jobs gains in September is the rapidly spreading delta variant of the coronavirus. It zapped a lot of momentum from the recovery as people in many parts of the country became more hesitant to eat out and travel. A mere 2,100 jobs were added in hotels and just 29,000 in restaurants.

The coronavirus surge also torpedoed the reopening of public schools and the return to in-person learning. Schools repeatedly faced outbreaks and concerns from staff members, including many bus drivers, who were hesitant to go back to driving vehicles teeming with children, as those under 12 can't be vaccinated.

"It's been so unpredictable. In-person school has not been reliable, and working moms had to balance that with trying to have a career," said Alicia Sasser Modestino, an economics professor at Northeastern University. "My 9-year-old woke up with sniffles and could not go to school today. I am living this in real time."

The September jobs report offered fresh evidence contradicting Republicans who have said that generous unemployment aid has been keeping people away from the workforce. Millions of people lost all aid or had it significantly scaled back at the start of September. But there was not an immediate wave of workers returning to jobs.

The key takeaway from the jobs report is that this is an uneven and bumpy recovery. The reason the United States has roughly 11 million job openings and 7.7 million unemployed is more complex than many are willing to admit.

The coronavirus continues to be a major factor in people's hesitancy to return to work, but there is something deeper going on in 2021. Workers, especially low-wage workers, are revolting against years of poor pay and stressful conditions. It remains unclear how the Great Reassessment of work will play out going forward. For now, people are still hesitant to take the first jobs available to them, if they don't believe they're good jobs. And they are not reluctant to quit a situation they don't like.

"The big news out of the jobs report was the delta variant slowed things down. That disproportionately hit lower-wage workers," said University of Michigan economist Betsey Stevenson. "But people are also thinking they can afford [to] wait for a better job - or a safe job - to come along."

For those looking for silver linings in the report, the most obvious is that the U.S. unemployment rate fell to 4.8% in September - the lowest since the pandemic hit. It marks a stunning rebound in just a year and a half from April 2020, when the official unemployment rate hit 14.7% (and it was probably even higher since the Census Bureau struggled to do its normal interviews that month).

It took nearly seven years for unemployment to drop this low after the Great Recession. Many credit the swift government response this time around, including trillions in aid for American households and businesses, for keeping people from falling into poverty and helping drive a swifter rebound.

But the unemployment rate declined for the wrong reason: The labor force got smaller in September. Fewer people, especially women, were looking for work as they continued to struggle with child care and schooling uncertainty. More than 5 million Americans have stopped looking for work during this crisis. A big question remains: Will they return?

Bahar Cetinsoy is among those millions. She was a substitute teacher in New York City before the pandemic hit. She and her husband relocated to College Park, Md., when he got another job offer. Cetinsoy is trying to get certified to teach in her new state and can't do much work in her field without that. She's also taking care of their young son, who was born during the pandemic.

"Child care is a big factor. It's expensive. If I get a part-time teaching job, I would pay more for child care than I would be making," she said. "I have never been unemployed for this long."

The optimistic view on Wall Street is that September was just another blip. There was a big decline in public education jobs, which was unusual and probably a result of many schools hiring over the summer instead of waiting until September. Excluding government and public education jobs, private-sector hiring rose 317,000 last month.

September saw modest job gains in nearly every sector outside of government. There were 74,000 hospitality jobs added, 60,000 business service jobs added, 56,000 retail jobs, 47,000 warehouse and transportation jobs, and 26,000 manufacturing jobs.

Even more encouraging is that coronavirus cases appear to be subsiding and vaccines could be available for children soon. This is driving renewed hope that hiring will pick up during the rest of the year and into 2022.

"The runway is cleared for a fall/winter jobs boom. I don't know if it starts this month or next, but I believe it's coming," tweeted Adam Ozimek, chief economist at Upwork, a jobs site.

But forecasters have repeatedly been too optimistic this year. The reality is that people continue to feel unable to return to work. For some, ongoing child-care or eldercare issues are holding them back. For others, it's concerns about being in a job with heavy exposure to the coronavirus - or one where they would repeatedly encounter customers who don't take precautions like mask-wearing and vaccinations. Some of this may improve in the coming months, but many government and business leaders have underestimated how long the deadly virus would stick around.

Beyond the virus, there is a deeper question of what jobs - and pay - people are willing to come back for. Hourly wages continued to rise in September as many businesses increased pay to try to attract workers, but the wage gains have almost entirely been eaten up by higher inflation this year.

There's also a clear divergence in how many college-educated, white-collar workers view this economy and how non-college-educated workers see it.

Employment in September grew by about 350,000 among people with a college degree or at least some college education. In contrast, employment declined by more than 430,000 among Americans with a high school degree or less.

"The labor market isn't working at the bottom," said Stevenson, the University of Michigan economist.

For now, many working-class Americans have some savings left from their stimulus checks and unemployment aid, and they often supplement it by taking on gig jobs like driving for Uber Eats. This gives them more of a cushion to wait for the right job to come along.