SYLVIE DOUGLIS, BYLINE: NPR.
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ADRIAN MA, HOST:
This is THE INDICATOR FROM PLANET MONEY. I'm Adrian Ma.
WAILIN WONG, HOST:
I'm Wailin Wong, and it is another hot jobs Friday.
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WONG: The February numbers came in more than expected, with the economy adding 311,000 jobs. Unemployment ticked up a little bit to 3.6%, but it's still historically low. So yeah, it's hot, Adrian.
MA: And speaking of hot, the chair of the Federal Reserve, Jerome Powell, was in the hot seat this week giving Congress an update on the economy and this tight, tight labor market we're in.
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JEROME POWELL: Clearly, the economy is calling for more people, with essentially two job openings for every unemployed person.
WONG: The economy is calling for more workers, but there are not enough people answering that call.
MA: Yeah, I'm picturing millions of people with their phones ringing, and they see caller ID that says Jerome Powell, and then they just, like, let it go to voicemail.
WONG: (Laughter) Exactly. Yeah, they're not picking up. According to the Fed, there are 3.5 million people they expected to be working or looking for work based on pre-pandemic trends but who are just not there.
MA: Yeah. And why are these workers not there? I mean, we have been asking this question for months and months, right? But the new thing is this - recently the Fed came out with a report which gives the best take they have so far on why people have left the workforce. So today we're going to dig into that, and we'll also hear from a few workers about why they left the labor force.
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WONG: For jobs Friday, we rounded up five stories from people who have experienced the pandemic-era labor market in different ways. They help explain why the Fed has tallied up 3.5 million people who were gone from the workforce between 2019 and 2022.
MA: So let's get into the numbers. Our first statistic is a sad one. In the report from the Fed this month, it attributed half a million absent workers to what it calls excess deaths, basically a lot of working-age people who died of COVID.
WONG: It has been a brutal three years, and that's one piece of the story. There's also been a slowdown in migration. The Fed says this explains another million absent workers. So overall, there are just fewer people in the U.S. available for work.
MA: And of that smaller group available for work, the number of them who are actually working or looking for jobs is down by 2 million people. This is the biggest group of absent workers.
WONG: And these are people who, by and large, are in financial situations that have allowed them to stay out of the workforce. But there are different reasons for having left in the first place.
MA: One reason is really big, and we will get to that in a second.
WONG: Yes, stay tuned on the big one. We're going to go through some other reasons first, like caregiving responsibilities.
MA: So our first labor market story comes from Katrina Trimborn (ph). When the pandemic hit, she was laid off from her job as a restaurant server at a hotel in Chicago, and Katrina opted to stay home with her two young daughters. And when schools went back in person...
KATRINA TRIMBORN: We at the very last minute decided maybe we could homeschool, and then we've just found that we really enjoy it. It's just given us a way to do a lot of activities hands on, be together as a family, spend a lot of time outdoors and doing the things that we really love. Right now we're doing a unit about plant life, and we're also planting seeds for our garden. And that's where we are now.
MA: So that's reason No. 1 for a smaller labor force - people with caregiving responsibilities. Reason No. 2 has to do with health. Workers got COVID and had to leave their jobs, or they quit because they didn't want to be exposed to COVID in the workplace.
WONG: Gretchen Musa works in special education in the Chicago suburbs. She's a transplant recipient, so she takes drugs that suppress her immune system. These drugs keep her body from rejecting the transplant, but they also make her more vulnerable to viruses like COVID.
GRETCHEN MUSA: I just needed to be very careful not to catch that, so I couldn't go back to working in the school building.
WONG: When schools were online, Gretchen worked remotely as a teacher's assistant in a high school classroom. The following year, there was no more remote option. She decided to leave.
MUSA: It broke my heart in some ways because there were kids in that class that I had seen on camera that I knew I would see in person, and we had gotten along well remotely. And I just was so sad to leave those needs unmet. And I know I'm replaceable, but it was just very hard to let go of being a part of those kids' lives and being able to help them.
WONG: Gretchen says given the stress of the last few years, she's not sure she wants to return to full-time teaching. So for now, she's keeping busy in other ways. Like, she earned her first-degree black belt in karate virtually.
MA: The Fed says caregiving and health concerns, their impact on the labor market has actually diminished as the pandemic has gone on. And this brings us to what the Fed pinpoints as the main story behind the worker shortfall - a surge in retirements.
WONG: Yeah, this is the big one. So retirements were already going up steadily in the decade before COVID thanks to aging baby boomers. But during the pandemic, some older workers retired earlier than they planned.
MA: Take Jim Stewart (ph) of Marshfield, Mass. He's our third labor market story. So pre-COVID, Jim was starting to think about retiring. He was in his mid-60s and had spent over 15 years at a company that makes software for public libraries.
JIM STEWART: The onset of the pandemic put a sharp end on the stick there, so to speak.
MA: Woof. Yeah, COVID took away one part of his job which he really liked, and that was going to trade shows.
STEWART: They were a great place to build new business, meet with people that you've grown to really be fond of over the years and meet at the bar afterwards - after the show. I mean, I missed that. And then the prospects of not doing that kind of all conspired to make it seem like retirement was the - a decent decision. It's been a good decision overall.
WONG: Jim says he thinks the pandemic moved up his retirement by a year. He is part of what's been dubbed the silver tsunami. This is a wave of aging baby boomers, many of whom retired in droves during the pandemic. The Fed says excess retirements were driven largely by white and college-educated workers who likely saw gains in their home values and stock portfolios.
MA: This silver tsunami presents a big challenge for employers with aging workforces. And that's our fourth story - how the labor market is affecting employers, people like Cathy Ball. She's a city manager in Johnson City, Tenn., and when she started her job in 2021, she counted 58 out of a thousand municipal employees that were eligible for retirement.
CATHY BALL: We were looking at - one person could walk out a week for 58 weeks, and what would we do?
WONG: I'm trying to imagine you, like, ordering a Costco cake every week.
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WONG: It's like, oh, we got another one.
BALL: That is very funny. I had not thought about that part.
MA: But Cathy did think about how to plan an orderly transition so that she wouldn't be scrambling each time someone announced their retirement. Late last year, Johnson City offered eligible employees a retirement incentive, a one-time payout equivalent to six months of salary. Basically, the city said, if you're thinking about retiring in the next two years, you should do it now and take this deal.
WONG: Twenty-two employees accepted the offer. There was a flurry of meetings to pass down all the institutional knowledge they could think of and then a big sendoff at the end of February.
BALL: There was so much, I would say, level of grieving around the loss of this much knowledge walking out as well as the people. But then when you heard the folks talking about what they were going to do post-retirement and the excitement in their voice, it felt good.
WONG: Yeah, it's exciting to think about a new chapter. That's how Thomas Willingham (ph) from Athens, Ga., felt when he took early retirement from a job at ExxonMobil in 2019. And that brings us to our fifth and final story - people who maybe took early retirement but are now unretiring.
MA: When Thomas left his job, he looked at it as an opportunity to spend more time with his family. He's 47 now, and he says he is ready to rejoin the workforce. He's looking at a new career as a certified financial planner, and it's a job he thinks he could do for a while.
THOMAS WILLINGHAM: We don't really want to be in a position where you work until you're 60, or you're 62, or you're 65. You say, thank you very much, I'm packing it up. It'd be something where you could build it up, and then you could kind of taper it off. But it's something that would be kind of a long-term pursuit in life.
WONG: The jobs data that came out today show that the number of people in the labor market has edged up slightly for three straight months. So as Thomas comes off the sidelines, he'll probably be in good company.
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MA: This episode was produced by Corey Bridges and engineered by Brian Jarboe. Sierra Juarez checked the facts. Viet Le is our senior producer. Kate Concannon edits the show. And THE INDICATOR's a production of NPR.
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