One Year After The First Wave Of Pandemic Job Losses, U.S. Adds Nearly A Million Jobs In March
By: Kristin Stoller
A year after the devastating first wave of pandemic-related job losses came to light, the U.S. added 916,000 jobs in March, the Labor Department said Friday.
It’s an encouraging sign on the anniversary of what was an especially distressing week for the workforce. Weekly jobless claims surged to a staggering 6.65 million for the week ending March 28, 2020. At the time, it was the highest level ever recorded. That month, the U.S. economy lost a total of 701,000 jobs in the first payroll decline since 2010.
This March, the unemployment rate fell slightly to 6%—down from 6.2% in February. It’s a stark difference from the unemployment rate a year ago at a shocking 14.7% in April 2020, the highest it had been since the Great Depression. February marked the first time since March 2020 that all 50 states and the District of Columbia had unemployment rates under 10%, according to the Labor Department.
“We are in a much better place and headed in a better direction. The economy is clearly strengthening,” says Lawrence J. White, a professor at NYU’s Stern School of Business. “Consumer confidence seems to be improving. The whole nature and feel of the economy is getting better.”
While the labor market appears to be on the mend, many Americans haven’t regained their confidence. A recent Pew Research Center study found roughly half of unemployed, furloughed or temporarily laid off U.S. adults who are actively searching for jobs are pessimistic about their employment prospects. Some 66% have seriously considered changing fields or occupations.
Laura Veldkamp, a finance professor at Columbia Business School, says the negativity is justified, as pandemic-era changes in spending have spurred job losses in industries such as entertainment and real estate.
“It’s difficult because now we have a whole lot of people dislodged from what they were doing and need to find something new to do,” she says. “There’s pessimism and optimism: Pessimism for not going back to what they were doing, but optimism because the economy is good at creating opportunities in new sectors for workers who want to work.”
Workers in low-wage jobs experienced the greatest loss in employment last year, according to Pew. Employment in low-wage occupations decreased by 12.5% between December 2019 and December 2020, compared with middle-wage jobs’ loss of 5.3% and high-wage jobs’ gain of 0.4%.
In fact, the availability of new six-figure jobs has hit a pandemic high, says Marc Cenedella, CEO of high-level job search site Ladders. The platform, which collects data from the top 50,000 U.S. employers weekly, found a 33% year-over-year increase in openings for these types of jobs—and a 108% uptick since September, when 92,000 six-figure jobs were available (compared to roughly 191,000 last month).
Cenedella attributes this to the market’s strong recovery. The period between Thanksgiving and Christmas is typically slow in terms of hiring, he says, but this past year it was twice as busy as consumer demand for online shopping, software and at-home entertainment grew, benefiting those industries’ high earners in the process.
“Typically in a recession, the high-wage folks see things coming. If they don't think their employer will do well during a recession, they will start to shift and they will move before an employer can affect them. In Covid, that didn't happen,” Cenedella says. “It turns out that people with college degrees, when they have white collar jobs, a lot of those jobs are able to be done from home. We’ve discovered that the productivity of working from home isn’t that bad.”
Compared to the Great Recession of 2007, the unemployment rate today has recovered quite rapidly, says Matthew Notowidigbo, an economics professor at the University of Chicago Booth School of Business. A large portion of those unemployed last year were only temporarily laid off, and many have been hired back in the past few months, he says.
“It’s not like I expect to see the same speed of recovery that we’ve had over the last several months,” Notowidigbo says. “But it’s important to realize how far we’ve come.”