New report: US labor force participation returning to pre-pandemic levels
A new report says U.S. labor force participation is returning to pre-pandemic levels, although some groups of workers are still falling short.
Specifically, white Americans and male Hispanic Americans have been slow to return to the labor force, according to the Employee Benefit Research Institute (EBRI), a nonprofit based in Washington D.C.
“The pandemic halted many long-term trends in the American labor market. Many Americans dropped out of the labor force or were without a job if they remained in the labor force at the onset of the pandemic. How Americans respond as the pandemic recedes will have significant implications for workers’ retirements,” EBRI Director of Wealth Benefits Research Craig Copeland said.
Among other findings, the report showed the male employment rate dropped by 3.8 percentage points in 2020, with the female employment rate dropping 3.5 percentage points. By 2022, the employment rate for both males and females had recovered significantly, although they were both 1 percentage point below 2019 levels. The EBRI study relies on data from the Bureau of Labor Statistics’ U.S. Census Bureau’s Current Population Survey.
U.S. cold storage provider Americold noted in its Q1 earnings call earlier this month that labor availability was improving across its supply chain.
“Labor is becoming available, retention is getting better,” Americold CEO George Chappelle said.
However, not everyone in the seafood sector agrees with the survey's finding.
High Liner Foods CEO Rod Hepponstall said the labor market was challenging in the company's Q4 2022 earnings call in February, and Baader North America CEO Nils Rabe told SeafoodSource last month the seafood processing sector continues to face labor issues.
“Lots of the issues remain the same,” Rabe said. “Labor is still extremely difficult to get, and finding the right labor is by far more difficult than that. And that’s driving lots of processors into automation.”
Last year, the National Restaurant Association said an extremely shallow labor pool was an existential threat to the U.S. foodservice industry, with B. Hudson Riehle, senior vice president of the National Restaurant Association Research and Knowledge Group, claiming that restaurants’ labor costs were the highest they’ve been in 40 years. However, the industry group noted at the time that a strong labor market and rising wages would drive Americans to travel more and spend more at restaurants, which would help the industry.
According to Megan Greene, a senior fellow at the Watson Institute for International and Public Affairs at Brown University, U.S. companies have been much stronger than expected thanks largely to rebounded U.S. consumption. That’s partly due to fiscal stimulus measures such as mailing checks to households and beefing up unemployment insurance, Greene said, who said strong consumption is expected to continue.
The labor market has also been strong in the U.S., she said.
“The labor market in the U.S. has held up freakishly well. It’s partly thanks to labor hoarding … and by labor hoarding, I mean companies deciding ‘Well, we're going into a weak period, but it was such a nightmare to try to rehire people after we laid them off during the pandemic. We'll just hold on to them and see if we can get through this patch,’” Greene said during a keynote address at the Seafood Expo Global conference in Barcelona last month.
Jobless claims have been on the rise, but they’re still far off from historic highs, she said.
“So it just suggests that the labor market has been weakening a little bit, but it's still incredibly tight and it's still really strong,” Greene said. “Job openings have been coming down from the post-pandemic peak, but they're way above historic norms, and same with the quit rate.”
A strong labor market will help labor force participation fully recover to pre-pandemic levels, according to Copeland.
“A continued strong labor market will likely lead to the labor force participation rates and employment population rates of 2019 being reached. However, a downturn in the economy would likely halt the movement back to 2019 levels, and who is out of the labor force after any downturn could significantly alter what companies’ work forces look like and what Americans have saved for retirement,” Copeland said.
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