As the job market moves into a new post-pandemic normal, an analysis from The Burning Glass Institute shows that some of its trends are unlikely to persist as Covid-19 concerns fade, while others will become a permanent fixture of the labor market.
Looking only at employment numbers, the labor market is very close to its February 2020 levels, indicating that recovery from the Covid-19 crash has been much faster and stronger than recovery from the 2008 financial crisis and 2001 dot-com bust. The latest BLS Employment Situation also marked twelve straight months of job growth over 400,000.
Source: The Burning Glass Institute
Those statistics all seem to indicate a strong economy, but in reality, this is a uniquely challenging time in the job market. The latest JOLTS report shows that Job openings and quits are both reached an all-time high in March, while the labor force participation rate declined in April, and real wages continue to decline in the face of rising inflation.
Describing this disorienting combination of recovery and disruption, a new briefing from The Burning Glass Institute says “The economy we have returned to isn’t the same as the one we left behind…it is as if we woke up after a long sleep to find a world not destroyed but distorted.” The report is titled “The Through-The-Looking-Glass Recovery,” named after the Lewis Carroll novel about a world reversed.
The Burning Glass Institute launched earlier this year as a hub for data-driven research and practice on the future of work and of workers, founded by Lightcast Chairman Matt Sigelman. The institute is an independent nonprofit organization that operates with support from Lightcast and access to its data. Its previously published research is available here.
According to the Through The Looking-Glass report, some industries have grown and thrived in Covid-19’s wake—53 industries have seen their employment grow by at least 10%, adding a combined 2.1 million jobs. However, one in six industries have not recovered from a jobs decline of 10% or more.
The total number of people employed is similar to its pre-pandemic level, but the distribution of those employed people has shifted significantly. The report identifies six trends shaping this pattern; four of those are structural changes that are likely to be permanent, and two are cyclical changes that may return to their earlier state in the coming months.
Four structural changes:
Grounding of business travel. Businesses’ shift to remote work dramatically reduced the need for most kinds of work-related travel. This includes business trips (jobs for convention and trade show organizers are down 47% since the start of the pandemic) but also commutes (jobs in bus and rail transportation have also experienced a significant decline).
Work/home hybrid. The work-from-home revolution affects more than travel. When workers aren’t at the office, they aren’t buying lunch nearby or going out to happy hour with their coworkers, either. At another level, commercial real estate loses rent money when businesses downsize their physical offices. Roles that support in-person workers have also taken a hit: for example, jobs in building cleaning and maintenance increased 9% from 2017-2019, then decreased 7% in the two years after.
Online shopping. The rise of online shopping, and corresponding decline of brick-and-mortar stores, is a trend that has been developing for over a decade and one that industry experts have long predicted. But quarantine was a tipping point: online shopping exploded, increasing 18% over the past two years, a nine-fold increase over the previous two years. That’s good news for some jobs (especially for warehousing/storage and couriers/messengers) but comes at a steep cost to in-person retail jobs.
Digital modes of interaction. Online innovations and services have empowered all of those changes, and as a result, those industries are showing strong growth. Again, the shift to internet-based activity and consumption is a well-recognized trend that has been developing for a long time, but the pandemic accelerated it.
Two cyclical changes:
More goods and fewer services. During the height of the pandemic, people couldn’t go out and buy services, like eating out or going to the movies. So people naturally purchased goods instead (like a new couch or big-screen TV). As restrictions ease, that trend is likely to reverse—especially since much of the pandemic-era purchasing was focused on durable goods, like appliances, that won’t need to be replaced for years. As more events and experiences become open and available, they will need more jobs supporting them.
Public health emergency. As the acute health danger of the pandemic fades, high demand for healthcare workers probably will as well. Employment in pharmaceutical manufacturing and diagnostic labs saw the biggest gains over the past two years; as demand declines for both testing and vaccines, it’s unclear how demand for those types of occupations will respond. At the same time, mental health services saw a large increase in demand during the pandemic. This was also a long-term trend that Covid-19 accelerated, and it’s likely changing public attitudes toward mental health will sustain the increased demand for jobs in the field.
For more data and insight on how the pandemic’s impact has reshaped hiring and the labor market, check out our video series “How Covid Has Changed The World.” The full report, “The Through-The-Looking-Glass Recovery,” is available free from The Burning Glass Institute.