Some jobs won't recover from the pandemic recession. It could be a good thing for workers.
- The US is back to record-high employment, but the labor market looks nothing like it did in early 2020.
- The couriers and messengers sector has seen employment surge during the pandemic.
The US may be back to record employment, but jobs look completely different from the pre-pandemic norm.
For starters, many in-person service sectors are still struggling to get back to the employment levels seen before the pandemic. Travel arrangement and reservation services are far from their pre-crisis job count, with employment still down around 31% from February 2020 levels as of August. Such businesses were battered throughout the pandemic as early lockdowns and subsequent virus variants paused travel for the better part of a year.
The slump in business travel also dragged on the sector's hiring plans, and that deficit is likely to stick around, Julia Pollak, chief economist at ZipRecruiter, told Insider.
"Remote work is permanently going to be higher than it was before the pandemic, so jobs in the office ecosystem and jobs related to commuting are going to be permanently lower," she said.
Employment in coal mining is 17.7% below its pre-pandemic level. Daniel Zhao, lead economist at Glassdoor, told Insider that this highlights a long-term trend that existed before COVID as the US moves to cleaner sources of energy.
The shift away from coal is "not something that has really been changed by COVID," Zhao said. "If anything, maybe the pandemic has modestly slowed that just because of how high energy prices have been. But overall that's a trend that I expect to continue regardless of how the pandemic continues to play out."
Transit and ground passenger transportation, which includes school buses and public transit, is also still not back to pre-pandemic employment either.
"I do expect there to be a recovery in that industry, but the pace is likely to be different than for the rest of the economy because it is very, very much based on government funding," Zhao said.
Employment in leisure and hospitality is still down 1.2 million from its level before the pandemic
Businesses in the leisure and hospitality industry have added jobs at the fastest pace throughout the recovery, signaling they could still catch up. Yet with employment still so far from prior highs, the crawl back to those job counts could slow well before the sector fully rebounds.
"We all thought the initial movements away from trend were pandemic-related, and that things would go back to normal. But now they've been really steady at the new normal for a very, very long time," Pollak said. "We're not really seeing a convergence that's related to an end of the pandemic and a return to normal behavior."
The accommodation sector — hotels and motels — has suffered during the pandemic. Such companies' job counts are down roughly 19% from levels seen in February 2020.
"I think overall, accommodation and the broader leisure and hospitality industry will return to pre-pandemic employment levels," Zhao said. "Right now, that industry feels like it's far away from where it was before the pandemic, but that's largely because of how deep the crisis was for the leisure and hospitality industry."
Food services and drinking places, which like accommodation belongs to leisure and hospitality, is also still below pre-pandemic employment. It could be one potential sector that may not get back to how it looked before the pandemic.
"Restaurants and their patrons have found themselves in a 'new normal.' Given emergent technology, changing consumer behavior and dining preferences, and the extraordinary challenges of the last two years, the industry is unlikely to ever completely return to its pre-pandemic state," Hudson Riehle, senior vice president of the Research and Knowledge Group at the National Restaurant Association, said.
Some industries in the US are seeing high employment compared to February 2020
On the other end of the labor-market spectrum, businesses that aided the shift to lockdown living are faring the best. Employment in the warehousing and storage sector is up 35% from early 2020 levels, buoyed by the surge of e-commerce business and supply-chain snarls that emerged last year.
"Warehousing has been a winner in the pandemic-era labor market as households shifted their consumption away from services and toward goods," Nick Bunker, economic research director of Indeed Hiring Lab, told Insider in a statement.
Employment in couriers and messengers, a sector that has grown throughout the pandemic, is nearly 28% above the pre-pandemic count.
The data processing and hosting sector has boosted employment to 18% above prior highs, likely aided by the hastened shift to cloud computing and telework. Hiring in the scientific research and development services industry was up just as much.
The changing labor market could be good for workers
The labor market shakeup isn't necessarily a bad thing. Nonfarm payrolls rose to nearly 153 million in August, surpassing the previous high set in February 2020 and marking a new record for US employment. The unemployment rate edged higher to 3.7%, but the uptick reflected a healthy increase in labor force participation, and the rate still hovers near five-decade lows.
Job openings remain near record highs, hinting that labor demand is still robust. That could be advantageous to Americans displaced from struggling sectors and looking to move into another area of work.
Yet the latest employment figures confirm that the labor market is taking a form never seen before. The pandemic was always set to leave the US with some permanent scarring. Some of that has already emerged throughout the labor market, and as the recovery charges forward, the workforce is likely to diverge even further from its pre-crisis status quo.