While Northeast Ohio went through a spike in the unemployment rate during the height of the COVID-19 pandemic, just as the rest of the country did, people in the region did not return to work at as high a rate as the country as a whole.
Instead, the region’s labor force, the number of people working plus the number of people who are seeking work, has shrunk since the pandemic began at a rate significantly higher than the rest of the country, said Cleveland-area economist James Trutko.
According to Trutko’s analysis of data from the federal Bureau of Labor Statistics, the regional labor force has declined by 91,000 people, a 6% drop, from February 2020 to September 2021. That compares with the national decline, which the BLS pegs at 1%.
“I’ve never seen really a loss in the labor force like this,” Trutko said in a phone interview last Tuesday, Nov. 30. “The drop in employment and the simultaneous drop in the labor force, that’s the big new thing to me. Both of those numbers are very surprising.”
More typically, Trutko said, employees are laid off and the unemployment number climbs, but the number of people remaining in the workforce doesn’t decline at the same time. He said that while the region’s workforce has fallen over the last several decades, the decline had been in line with the decline in population.
It’s too early for economists and others who follow the region’s workforce and its needs to accurately know the causes of the decline. But observers have offered a number of possible reasons.ADVERTISING
One is that because the region has an older average population than the country as a whole, it has a greater number of people at an age and in a position where continuing to work was not an economic necessity. Essentially, they retired — and removed themselves from the labor force — a little earlier than planned.
“There’s a lot of dynamics at play that I think we’re still trying to fully understand,” said Jacob Duritsky, vice president for strategy and research at Team NEO, the regional economic development nonprofit. “I think what we may end up seeing is that a lot of people who were at least close to being in a position to retire, maybe did.”
Team NEO’s work covers 18 counties in Northeast Ohio, and Duritsky said the labor force decline in that region is about 4.5%. He also pegged the region’s workforce as 5% older than the national average.
With the region’s strong industrial base, that may mean that the retirement of skilled manufacturing workers could lead to the loss of institutional and technical knowledge, declining productivity and rising costs. A 2019 study by the Manufacturing Institute found that one-quarter of the manufacturing workforce nationally was over the age of 55.
Duritsky added that he, as well as many people like him who closely watch economic conditions, can so far only go by what they are hearing anecdotally to explain the impact of the pandemic on the economy.
“There’s sort of a younger generation of workers, too, who don’t necessarily seem as motivated, maybe as people were historically, to just take a job,” he said. “They’re looking for more, they’re looking for workforce culture and things like that.”
Jill Rizika, executive director of Towards Employment, a nonprofit that provides coaching and training to help connect people with jobs, is seeing people who, for a variety of reasons, aren’t rushing to get back to their jobs.
“I think parents in particular are really hard hit by what’s going on,” she said. “With all the uncertainty about child care or schools that could get shut down at any minute, how are you supposed to work when you could be called away at any minute to go pick up your kid and be home for 14 days?”
She also, though, is seeing people who are looking for training to avoid going back to jobs where they risk exposure to the COVID-19 virus — restaurant and hospitality workers in particular.
“I think we’re seeing an uptick in people going into training, either because they recognize that getting skills at this point will have a payoff in seeing their wages rise,” she said. “Also, maybe they were health care or hospitality workers and they don’t want to go back (to those sectors).”
The long-term issues of building a strong and growing workforce are being analyzed by the Fund for Our Economic Future, another economic development nonprofit. It has begun a research project to identify what needs to be done to support and build the region’s workforce.
“More companies are asking about what the area needs for job retention and expansion,” she said.
A small group of the people who have returned to employment have chosen a way to use their time away from work that is paying off.
Tech Elevator, the Cleveland-based tech education business, has a 14-week coding program that is attracting the attention of some who have temporarily left the workforce.
Marty Mordaski, director of the Cleveland campus, said that in the last six months, he has seen a 45% increase in applications from prospective students who are coming out of the food service industry.
“Even through the pandemic, we still maintained a 90% placement rate, meaning that 90% of our students are getting jobs in tech within 180 days of graduation,” he said. “So someone coming out of the food service industry, if we look at those folks that have (gone through) the program, when they come to Tech Elevator, their average annual earnings, which were $32,000 a year, their average salary post-Tech Elevator is about $57,000 a year.”
Read original release here.
Miller, Jay. (2021, December 5) Pandemic still keeping some people away from workforce. Crain’s Cleveland Business. Retrieved from https://bit.ly/3lF8LAf