February Jobs Report Shows Large Recovery Gap Remains : The Indicator from Planet Money It's Jobs Friday! The February jobs report shows signs of recovery, but there's still a long way to go. We talk to three experts about their indicators on how things will change and when.

Jobs Friday: Better! Still Not Good Tho

  • Download
  • <iframe src="https://www.npr.org/player/embed/974208929/974261350" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

CARDIFF GARCIA, HOST:

Hey, everyone. Stacey and Cardiff here. This is THE INDICATOR FROM PLANET MONEY. Today's Jobs Friday.

STACEY VANEK SMITH, HOST:

It's Jobs Friday.

GARCIA: Yes. And also, the labor market is kind of still terrible, so we're not yet going to be blowing the traditional celebratory Jobs Friday air horn again just yet.

VANEK SMITH: That said, we are getting closer to air horn territory. The Bureau of Labor Statistics this morning released the jobs report for the month of February, and it showed that the labor market created 379,000 jobs, which is more than economists had expected, more than twice as many jobs as were created in January. So there might be bigger gains to come if COVID cases keep falling, people get vaccinated and the economy continues to reopen.

GARCIA: That's right. But we also want to keep this in context.

VANEK SMITH: Yeah.

GARCIA: Three hundred and seventy nine thousand jobs created may sound good, but actually, that means that there are still about 9 1/2 million fewer jobs than a year ago, before the pandemic. And some of the big disparities in the labor market that existed before the pandemic are still there and not getting better. Last month, for example, the unemployment rate for Black workers actually went up, and it is now at almost 10%. That's just a much higher unemployment rate than for white workers, which is roughly 5 1/2%.

VANEK SMITH: And there is a lot more in this jobs report. It is very detailed. So as we often do on Jobs Friday, we have asked three of our old faves, friends of the show, labor market experts, to pick out an indicator from this jobs report that they think is especially worth highlighting.

GARCIA: So today on the show, new numbers on people working from home, what happens when a job search runs long, and just how far off is a full recovery anyways? All that after a quick break.

(SOUNDBITE OF MUSIC)

GARCIA: OK, three Jobs Friday indicators from our three jobs Friday experts. Let's do this. First up is Lisa Cook, professor of economics and international relations at Michigan State University and a longtime friend of the show.

LISA COOK: The indicator that I would like to highlight is the long-term unemployed, those who have been unemployed for 27 weeks or longer.

VANEK SMITH: Almost exactly a year ago, right before the pandemic started, there were roughly 1.1 million people who were so-called long-term unemployed. Now there are 4.1 million people, nearly four times as many.

COOK: And this is worrying because it keeps ticking up, and it really indicates labor market scarring.

GARCIA: What Lisa means by labor market scarring is that the harm of long-term unemployment goes beyond just not having a job and a steady paycheck. There are also long-term effects that make it harder to re-enter the job market and be productive.

COOK: One of those effects is that - skills atrophy. One loses one's skills during a period of long-term unemployment. Let's take, for example, a plumber who is just about to be certified. And that plumber, that plumbing student, plumbing apprentice, no longer has the ability to go into people's houses and workspaces to fix things. And you lose hours of practice that you have to have for certifications, for example. So that's what I mean by skills atrophy.

GARCIA: And there are other effects, too, like the loss of a worker's professional network, their contacts, which makes it harder to find new opportunities. Plus, businesses, employers, often become hesitant to hire someone the longer that person has been unemployed. These employers start discriminating against people who have been out of work for a while.

VANEK SMITH: And to get the long-term unemployed back to work, Lisa says there are some things the government can do, like offering incentives for businesses to hire long-term unemployed workers. That's in addition to the obvious thing that would help, which is the labor market becoming so strong that companies have to compete to attract workers.

COOK: So you have lots of people looking for jobs, you have lots of job openings, but you need some experience. I mean, another thing that could happen is that these people form businesses. If we find a way to make that more attractive, I think this is something that could bring the long-term unemployed back into the workforce as well.

GARCIA: Next up, our second Jobs Friday indicator comes from Adam Ozimek. Adam is the chief economist at Upwork, which is a jobs posting site where businesses and freelancers can find each other.

VANEK SMITH: He also owns a bowling alley.

GARCIA: Yes, he does.

ADAM OZIMEK: I want to talk about the percent of people who are working remotely.

GARCIA: Every month, the government asks people with jobs if they are working remotely. And specifically, the government asks people if they are working remotely because of the pandemic. And right now, that share of people with jobs who are working remotely because of the pandemic is 23%, so almost 1 out of 4 people. And that number has held steady for about half a year.

VANEK SMITH: And remember; there are also people working remotely who were working remotely before the pandemic, Adam says. And when you include both groups...

OZIMEK: It's probably like 40 to 50% of people are working remotely to some extent right now. And some of those people are going to come back to the office. But I think in the long run, we're going to have around 20 to 25% of people working remotely full time. That's my expectation.

GARCIA: If Adam is right, if up to 25% of workers end up working remotely even after the pandemic, then that is a huge increase from the world that existed before the pandemic, when, according to his estimates, only 5 to 10% of people were working remotely full time. And Adam thinks this trend is going to have big economic effects.

OZIMEK: It's going to mean that there's a lot less commuting. It's going to mean that there's a lot less need for downtown office space. And importantly, it's going to mean that a lot of people can live wherever they want and sort of disconnect the decision of who they want to work for from where they want to live.

VANEK SMITH: Ultimately, Adam says, the ability to work from home should also lead to a much better match between workers who prize the ability to work remotely and the companies who offer it. That will make workers more efficient, more productive.

GARCIA: And to attract the workers that they want, some companies may end up having to offer the option to work from home as a kind of implicit compensation, which Adam says is finally, Stacey, a win for the introverts.

VANEK SMITH: Woo-hoo.

GARCIA: Our day has come.

VANEK SMITH: Our day has come.

GARCIA: We'll be celebrating, you know...

VANEK SMITH: Privately.

GARCIA: Yeah, exactly (laughter).

VANEK SMITH: And our last Jobs Friday expert is Nick Bunker. Nick is the economic research director for North America at the Indeed Hiring Lab.

NICK BUNKER: So my indicator is four years and seven months. So that's how long it would take to catch up to the pre-pandemic trend in jobs at our current pace of job growth.

GARCIA: So here's what Nick means. Going into the year 2020, the year of the pandemic, the economy had a lot more jobs back then, nearly 10 million more jobs. And the economy was also creating about 170,000 jobs per month.

VANEK SMITH: And now the economy has way fewer jobs. And it also missed out on all the extra jobs that would have been created if the pandemic had never happened. And so Nick wanted to know. Let's say the economy keeps growing jobs at the same pace it did last month, which was 379,000 jobs. How long would it take the economy to catch up to the early trend in jobs?

GARCIA: And the answer, as he said, is four years and seven months.

VANEK SMITH: That's a long time.

GARCIA: Yeah. And it means that a lot of people in the meantime will be denied a source of income and all the other good things that come with a job.

BUNKER: And to not get back to that level quick enough is just more time of more people in more misery. And that's something that we should want to eliminate.

VANEK SMITH: And that should also place today's jobs report for February in the appropriate context. So, yes, job growth was better than in January. But if we want to catch up to the economy we had before the pandemic, and we want to do it soon, then we are going to have to be creating a lot more than 379,000 jobs a month. It would have to be more like a million jobs per month.

(SOUNDBITE OF MUSIC)

GARCIA: And, by the way, if we do get a jobs report with a million jobs created in a month again...

VANEK SMITH: Oh.

GARCIA: ...I think then we're back.

VANEK SMITH: It's going to be so hardcore air horn. Maybe the whole episode would be an air horn - just an air horn.

GARCIA: And people would understand completely.

VANEK SMITH: Absolutely. The air horn speaks for itself.

GARCIA: Indeed. This episode of THE INDICATOR was produced by Brittany Cronin with help from Gilly Moon and fact-checked by Sam Cai. It was edited by Jolie Myers, and THE INDICATOR is a production of NPR.

Copyright © 2021 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.