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America’s job market crumbled in 2020. Here’s what to expect for the New Year


#Over the summer, the job market recovery looked decent, steadily chipping away at the more than 22 million jobs lost during the pandemic. #But the jobs recovery has turned anemic in recent months.

The #Biden administration will need to stimulate job growth and continue to support the unemployed, economists agree. They point at sobering comparisons from just about a decade ago: #It took more than five years for the US job market to recover after the end of the #Great #Recession, when far fewer jobs were lost.

“#As the #Covid-19 crisis continues, more employer-employee bonds break, amplifying the economic and societal damage,” the #Bureau of #Labor #Statistics said in its #Monthly #Labor #Review on #Tuesday.
#Meanwhile, weekly claims for unemployment benefits remain stubbornly high — nearly four times higher than a year ago. #Thursday’s #Labor #Department report is expected to show another uptick to 833,000 seasonally adjusted first-time claims in the #Christmas week. #Separately, economists predict the jobless rate will go up to 6.8% in #December, the first increase in the unemployment rate since #April.

#Help is on the way … but not soon enough

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The jobs recovery is stuck in a rut — and the biggest source of help, a widespread vaccination program, is still months away.

“The timing of the vaccine rollout is the main factor affecting the speed of the labor market recovery,” said #Cailin #Birch, global economist at The #Economist #Intelligence #Unit, in emailed comments.

#More than two million #Americans have already received the first dose of the two-shot vaccine, but #Birch believes it will take until the third quarter of 2021 for vaccination rates to be high enough to allow consumer behavior to resume to pre-pandemic levels. #Until then, the muted activity will be a drag on the economy.
#Eventually, the vaccine will help revive jobs in sectors that require face-to-face contact, like hospitality. #Economists at #Goldman #Sachs expect a hiring jolt around mid-year to push the unemployment rate down to 5.2% by the end of 2021. #Until then, lower income jobs such as in the hard-hit restaurant industry continue to be most at risk to be temporarily lost again as states hunker down to prevent the virus from spreading further. #And the colder winter weather isn’t helping matters either.

#As the #United #States waits for widespread vaccination, the job market will continue to suffer greatly. #Tighter restrictions in response to high infection rates will mean more unemployment over the winter months, said #Birch.

A shot in the arm

#Unfortunately for #Biden — and the jobless — he has few tools at his disposal for a short-term boost.

#One key tool is stimulus. #While more pandemic stimulus was just signed into law last #Sunday, many economists agree that more stimulus from #Washington will likely be needed both to support the recovery and those who haven’t been able to return to work yet.

“#Stimulating the economy to create jobs is crucial,” said #Heidi #Shierholz, senior economist and director of policy at the #Economic #Policy #Institute, “both to the 26.1 million workers who are being directly harmed by the recession because they are either out of work or have had their hours and pay cut, and to the millions more who saw their bargaining power disappear as the recession took hold.”

These 26 million include the officially unemployed, those who dropped out of the work force, unemployed but misclassified workers and the still-employed whose hours and wages have been cut. The higher the unemployment rate, the more workers will be forced to take whatever job is available, which erodes bargaining power, especially for lower paid jobs.

#Missing the boat on more stimulus next year could exacerbate these disastrous consequences and slow the recovery.

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#Washington’s lawmakers will have to consider worker protections in their plans for more stimulus, especially because many still can’t return to jobs that would put themselves or family members at risk of contracting the virus.

#Looking ahead, #Biden has also proposed investing heavily in #America’s infrastructure, which would create jobs — as well as workforce training programs like apprenticeships. #Such initiatives could change #America’s jobs market in the medium and long term.



[ source link ]
https://edition.cnn.com/2020/12/30/economy/2021-job-market-outlook/index.html

##Americas #job #market #crumbled ##Heres #expect ##Year

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