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. Our jobs grew and then shrank across the winter. In March and again in April, the state added jobs.
Despite recent growth, Wisconsin faces a substantial jobs deficit. 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 April 2021 remains very close to what the state posted at the very pit of the last recession: Wisconsin had 4.7% fewer jobs today than before the crisis.
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 and then bounced back in March and April.
There are now solid reasons for optimism about the trajectory of the disease and the economy. Vaccinations have ramped up and the disease is in decline in the state, to levels we haven’t seen for a year. Additionally, the federal American Rescue Plan is a serious commitment to support the recovery. Stimulus checks, support for the unemployed, investments in state and local governments, and support to families with children are building a stronger economic recovery.
Wisconsin Job Loss: -140,500 (Jobs in April 2021 Relative to February 2020)
With 140,500 fewer jobs than before the COVID-19 economic collapse, Wisconsin’s labor market remains in a substantial deficit. We gained 9300 jobs in April, which built on the growth in March. Even so, our labor market has 4.7% fewer jobs today than it did just over a year ago. Wisconsin’s current jobs deficit is slightly smaller than the scale of job loss at the deepest point in the Great Recession of 2007.
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 it 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 April 2021, Wisconsin had 4.7% fewer jobs than it had before the crisis began.
Context
- At the depth of the COVID-19 economic collapse (April 2020), 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.
- Labor market progress in the spring: In April, Wisconsin added 9300 jobs; in March, the state added 12,900 jobs.
Unemployment Rate April 2021: 3.9 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 April, some 119,300 Wisconsinites were looking for work resulting in an unemployment rate of 3.9%. Unemployment is still above the rate from before the COVID-19 crisis of 3.5%.
The highest level of unemployment in this economic crisis was 14.1% in April 2020.
Leisure and Hospitality Industry Hardest Hit: Down 51,200 Jobs
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 2020, 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 18% 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. The sector has been adding jobs since late winter and, with COVID restrictions loosening, the growth is likely to continue.
While leisure and hospitality have been devastated in this shut down, some sectors have lost very few of their jobs: Trade, Transportation, and Utilities has lost just 1.2% of its jobs and manufacturing is down only 1.9% compared to February 2020.
Conclusion
Since the March 2020 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. Fall and winter were less steady though progress was made. As vaccination increases and the disease is on the decline, we can hope for continued progress in jobs.
It is too early to predict that “normal” is on the horizon. This recovery is fragile. More than 140,500 jobs have been lost. And as we have noted throughout the pandemic, the very workers who faced the lowest wages are the ones who carried the brunt of this pandemic. With inequality exacerbated by this pandemic, we can hope that we are moving toward an economy that truly values all workers in it.