Context
In March 2020, the US took dramatic steps to stop the spread of COVID-19. Many states issued stay-at-home orders and the economy contracted dramatically. Jobs fell away and unemployment spiked.
After the collapse more than a year ago, the economy improved rapidly in early summer, with strong job growth and unemployment falling. However, job growth slowed as the summer came to an end. This fall, the Wisconsin labor market stalled. In October and November, the state lost jobs. In December and January, jobs were up. In February, jobs fell again. The state lost 4,500 jobs in February.
With growth in some months and losses in others since the fall, we are stalled with a substantial deficit of jobs. For a sense of the current state of the labor market consider that at the deepest pit of the Great Recession of 2007 Wisconsin was down 5.8% of its jobs. The jobs hole in Wisconsin in February 2021 remains very close to the what the state posted at the very pit of the last recession. In February 2021, Wisconsin had 5.5% percent fewer jobs today than a year before.
To make clear how working Wisconsin is doing, we compare current economic data to the last “normal” month (February 2020, before intense contraction brought about by business closures). We also provide information on month-to-month changes to demonstrate the trajectory of the recovery. The recovery was strong from April through October but floundered in the fall. In October and November, jobs were lost and unemployment grew. In both December and January, jobs were added. The pace is slow, but positive. In February, total jobs fell slightly.
While the disease continues to spread, there are some solid reasons for optimism about the trajectory of the disease and the economy. The intensity of the spread of the disease in the state has been declining since January. Vaccination in the state has ramped up. The federal government has also made a serious commitment to support the recovery with the American Rescue Plan. In addition to stimulus checks, the plan includes support for the unemployed, for state and local governments, and for children. These investments will support families that need money for basic needs while also building a stronger economic recovery.
Wisconsin Job Loss: -164,600 (Jobs in February 2021 Relative to February 2020)
With 164,600 fewer jobs than a year ago, Wisconsin’s labor market remains in a substantial deficit. We lost jobs a small number of jobs last month and added jobs the previous two months. This suggests that recovery remains weak. The Wisconsin labor market has 5.5% fewer jobs today than it did a year ago. Wisconsin’s current jobs deficit is just slightly smaller than the scale of job loss at the deepest point in the Great Recession a decade ago.
A weak labor market tips the balance of power toward employers because workers are easier to replace. As a result, even for those with jobs, job losses on this scale make harder to secure overtime or ask for time off, harder to complain about sexual harassment or racist coworkers, and harder to secure wage increases. In this context, some employers are seeking wage reductions through furloughs or other means.
In February 2021, the Wisconsin labor market had 5.5% fewer jobs than it had before the crisis began.
Context
- At the depth of the COVID-19 economic collapse (April2020), Wisconsin was down more than 465,000 jobs or 15.5% of jobs.
- At the depth of the 2007 Great Recession, Wisconsin was down 5.8% of its jobs.
- The scale of losses in the contraction was three times the Great Recession.
- Stalled recovery: After losses in the fall, Wisconsin gained 15,100 jobs in December and another 11,100 in January and then lost 4,500 jobs in February.
The current 164,600 jobs hole is substantial and a serious problem for working people in the state.
Unemployment Rate February 2021: 3.8 Percent
The unemployment rate measures the share of labor force that is actively seeking but unable to secure work. As with the overall job market, this is a measure of the availability of jobs and economic opportunity. When more workers are unemployed, there is more fierce competition for jobs and employers have more choices and greater leverage over work. Unemployment is first and foremost a crisis for the unemployed, and for those who look but cannot find work and give up looking. These are the ones who have no income from work. But high unemployment also lowers the bargaining power of workers with jobs; when there’s a long line at the door looking for jobs, employers can be less interested in keeping the workers they have around.
In January, some 116,900 Wisconsinites were looking for work resulting in an unemployment rate of 3.8%. The is just above the rate a year ago of 3.5%.
The highest level of unemployment in this economic crisis was 14.1% in April 2020.
Leisure and Hospitality Industry Hardest Hit: 61,600 Jobs Lost
The Leisure and Hospitality Industry — restaurants, bars, hotels, etc. – has been the hardest hit in the COVID-19 economic collapse. Even before the collapse, the industry’s workforce of waitstaff, bartenders, dishwashers, housekeepers, and others suffered low-wages, volatile and unpredictable hours, and few benefits. These workers – more likely to be women and people of color – are now facing a new reality. Finding steady work in the industry is likely to remain difficult.
In April, at the depth of the crisis, more than half of workers in this had lost their jobs. The industry has been moving slowly out of that hole since the collapse though there has been volatility in the sector with months of loss and growth across the fall and winter. The industry is by far the hardest hit and remains some 21% below pre-COVID-19 employment levels. December and January job losses were likely due to the growth of the disease and corresponding bar and restaurant closures. February saw a very slight gain of 1,100 jobs in the sector. With COVID restrictions loosening in this sector, the coming months may see gains.
While leisure and hospitality have been devastated in this shut down, some sectors have lost very few of their jobs: Professional and Business Services is down only 1.0% of their total jobs since February 2020 and Trade, Transportation, and Utilities has lost just 1.4% of its jobs.
Conclusion
Since the March COVID-19 economic collapse, there have been strong months of job growth and falling unemployment. These indicators improved rapidly across May and June. From July through September, there was improvement, but at a much slower pace. Job losses in October and November were made up in December and January continued the positive trend of growth. Jobs fell slightly in February. The recovery is weak and uneven and not strong enough to extend opportunity to the thousands of unemployed workers in Wisconsin who are looking for jobs.
It is too early to predict that “normal” is on the horizon. This recovery is fragile. More than 160,000 jobs have been lost. But there are number of sources of hope including falling cases of the disease, increasing vaccination in the state, and policy supports to people through the federal American Rescue Plan. In the coming months, hopefully these positive signs will turn into economic opportunity for the workers in Wisconsin who need it most.