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Economists Reconsider Pandemic and Post-Pandemic Workplace Predictions

S.J. Steinhardt
Published Date:
Jul 20, 2023

The COVID-19 pandemic did not change the labor market permanently in as many ways as economists had predicted, The New York Times reported.

Concepts such as the “she-cession,” early retirements and quiet quitting have proved not to be long lasting. Women have returned to the post-pandemic in record numbers, older workers have come back to the job market, and the alternative to quiet quitting may be, well … quitting.

In June, the employment rate for women in their prime working years, commonly defined as 25 to 54, was the highest on record.

Despite millions of Americans in their 50s and 60s leaving the labor force early in the pandemic, causing many economists to believe that that they would never come back, Americans between ages 55 and 64 returned to work just as fast as their younger peers and are now employed at a higher rate than before the pandemic. While some may have been forced back to work by inflation, others had always planned to return and did so as soon as it felt safe.

Still, Americans who are past the traditional retirement age of 65 have not returned to work in large numbers, the Times reported

A “white-collar recession” has also proved to be questionable. Technology layoffs at big companies have not appeared prominently in overall employment data. High-skilled employees seem to be moving into new and different jobs pretty rapidly, and unemployment remains very low both for information and professional and business services.

Currently, a historically strong labor market with very low unemployment has provided workers with the leverage more ability to win better wages and benefits. Working from home for many white-collar jobs is still reshaping the economy.

“The profession has not fully digested the lessons of the recovery from the Great Recession,” said, Adam Ozimek, chief economist at the Economic Innovation Group, a research organization in Washington, to the Times. One of those lessons is: “Don’t bet against the U.S. worker.”

Many labor market experts were skeptical that the job market would fully recover from the shock of the pandemic, but the rebound from the pandemic recession has been faster than the one that took place after the 2008-09 downturn. The difference is that the last recession left lasting damage due to the financial meltdown and housing market collapse. But, when there are jobs, people will fill them.

“People want to adapt, and people want to work: Those things are generally true,” said Julia Coronado, the founder of MacroPolicy Perspectives, a research firm, told the Times. “People are resilient. They figure things out.”