The US Has Reversed Pandemic Job Losses. Most Individual States Haven't.
In July, the U.S. economy regained the 25 million jobs it had lost in the pandemic. But in 31 states and the District of Columbia, employment still lags pre-pandemic levels.
New York state is down 327,800 jobs as of August, as remote work has battered shops and other businesses that once catered to commuters. The state might not see pre-pandemic employment levels until 2026, according to a budget report last month.
Midwestern states have lost thousands of manufacturing and hospitality jobs. Ohio has 124,200 fewer jobs than it did before the pandemic, while Pennsylvania (-111,300), Michigan (-96,000) and Illinois (-76,400) are not faring much better. The numbers, from the U.S. Bureau of Labor Statistics, compare employment in February 2020 with the August job numbers, which were released Sept. 16.
The jobs picture is brighter in parts of the South and West, where some states are benefitting from an influx of new residents. Texas has 563,900 more jobs than it did before the pandemic. Florida has added 371,900 jobs, and North Carolina (180,900), Georgia (158,100) and Utah (104,700) also have more jobs now than before the pandemic.
Even states that have fewer jobs than they did before the pandemic have benefited from job growth in transportation and warehousing, a sector boosted by Americans’ increasing propensity to shop online. Nationally, there are more than 714,000 additional transportation and warehousing jobs, and the industry was the fastest-growing employer in 15 states.
“Some of the strongest job growth is coming from an industry in which job quality is pretty low, with the caveat that many of the missing jobs in leisure and hospitality are generally low-quality jobs as well,” said Kathryn Zickuhr, a labor market policy analyst at the Washington Center for Equitable Growth, a nonprofit research group.
Leisure and hospitality jobs, in places such as hotels and restaurants, are still slumping in most states and are down by about 820,000 nationally. They represent the biggest drop in jobs for 20 states and the District of Columbia.
Nationally the 25 million jobs lost in the pandemic have come back as of July, but some states have yet to recover fully. Thirty-two states and the District of Columbia have yet to recover all the jobs they had in February 2020 before the pandemic.
Source: U.S Bureau of Labor Statistics, Stateline analysis.
Companies such as Amazon and Walmart have hired hundreds of thousands of workers for warehouses and distribution centers, according to an April report by the Washington Center for Equitable Growth.
However, warehousing and transportation jobs tend to pay poorly, and they can be unsafe and insecure, the report noted. At the time the report was released, warehousing and transportation workers made an average of $27.79 an hour, nearly $4 less than the national average. A disproportionate number of those jobs are held by men and Black and Hispanic workers.
In Ohio, for instance, there are 38,200 fewer leisure and hospitality jobs and 17,800 fewer manufacturing jobs than before the pandemic, but there are 37,300 more transportation and warehousing jobs.
“COVID-19 has definitely changed the job mix in Ohio. Many of the jobs lost were in industries that had been growing,” said Michael Shields, author of an September report on jobs recovery by Policy Matters Ohio, a progressive policy research institute. Shields said the institute is concerned about low levels of unionization in warehouses compared with disappearing factory jobs, making the warehousing jobs generally lower paying and less secure.
The number of manufacturing jobs already was declining in Ohio before the pandemic, according to the report. But service jobs in leisure and hospitality; government; health and education; and professional and business services grew between 2000 and 2019.
Texas, which has gained more jobs than any other state since February 2020, started to recover from its job losses quickly, according to a recent article in Southwest Economy, published quarterly by the Federal Reserve Bank of Dallas. The state had completely recovered early losses of 1.4 million jobs by last December, with the Austin and Dallas-Fort Worth areas leading the way with more remote-friendly jobs.
“The boom in high-tech, financial activities, and professional and business services helped Austin and [Dallas-Fort Worth] come back sooner than their counterparts along the Gulf Coast and the [U.S.-Mexico] border,” Southwest Economy noted.
Other Texas areas have been slower to recover: Pandemic border closures stopped cross-border shopping and led to a sharp decrease in trade in El Paso; San Antonio’s tourism was devastated by curtailed travel; and Houston suffered persistent losses in energy jobs, according to the article.
Florida, which has gained the second-highest number of jobs, was one of only a few states where the number of service and manufacturing jobs increased, though leisure and hospitality jobs are still down from pre-pandemic levels.
Adrienne Johnson, chief economist for the Florida Department of Economic Opportunity, said in an e-mailed statement that there had been a shift toward better-paying jobs in professional services, finance and manufacturing. The number of warehouse jobs also increased by 56,300.
In most states, there was a correlation between population changes and job growth. The Northeast lost almost 450,000 people between April 2020 and July 2021, and the Midwest lost 144,000, while the South gained almost 960,000 and the West added about 79,000 during that time, U.S. Census Bureau estimates show.
As consumer spending continues to fuel the demand for goods, there are some signs pointing to the creation of better-paying jobs.
In June, for example, Ford announced plans to add 6,200 auto manufacturing jobs by 2026 in Michigan, Missouri and Ohio. The company cited increased demand for electric cars and other vehicles, though that won’t make much of a dent in the nearly 30,000 durable-goods manufacturing jobs lost during the pandemic in Ohio and Michigan alone.
Another bright spot: The continuing labor shortage could finally be raising wages for warehouse and courier employees, said Beth Gutelius, research director at the Center for Urban Economic Development at the University of Illinois Chicago.
“Wages [in warehousing] have stagnated for decades, even as demand for warehouse workers has grown rapidly especially since 2013 as e-commerce took off,” Gutelius said. Since last year, however, “wages and hiring finally begin to move in the right direction, including the arrival of long-overdue upward pressure on wage rates.”