Retirements, labor force changes threaten to permanently scar economy 

    Six months into the pandemic, evidence of longer-term damage to the U.S. labor market is emerging, according to separate analyses of detailed monthly jobs data by labor economists and Reuters.

    Retirements are drifting up, women aren’t reengaging with the job market quickly, and “temporary” furloughs are becoming permanent—trends that could weigh on the U.S. economic recovery in the short term as well as the country’s prospects in the long term.

    “In the first few months of the recession we were much more focused on how many jobs could come back, how many jobs could be preserved,” says Kathryn Anne Edwards, a labor economist at RAND Corp. “Now the question is really how much damage has this done.”

    The U.S. economic drag is falling heavily on two groups, women and older workers, who fueled  a rise in labor force participation prior to the pandemic. That supported stronger-than-expected economic growth in 2018 and 2019, and showed how a historically low unemployment rate drew people back into jobs.

    Those workers may now be getting stranded. Women and workers age 65 and older comprise a disproportionate share of the 3.7 million people no longer working or actively seeking a job since the pandemic hit, Labor Department data shows.

    Specifically, people 65 and older made up less than 7% of the workforce in February, but 17% of those who have left the labor market through August. Women previously accounted for 47% of the workforce, but make up 54% of the departed.

    Initial evidence of longer-term trouble is starting to show in the monthly Current Population Survey that forms the basis of regular government employment reports.

    After a spike in women leaving the labor force in the early months of the pandemic, particularly to tend to family responsibilities, there’s been slower movement back into jobs compared to the months before the pandemic, according to an analysis of CPS data by Nick Bunker, economic research director for North America at the Indeed Hiring Lab. Read the full story.