This morning, the Department of Labor (DOL) reported that 140,000 jobs were eliminated from payrolls around the country in December. This monthly jobs report marks the first time since last spring that there was a net decline in nonfarm employment. Most sectors faced major job loss, with leisure and hospitality cutting close to 500,000 jobs in the last few weeks of 2020. Both the DOL and economists point to the rising number of COVID-19 cases to explain the decline: one analyst has noted that he “can’t see . . . the labor market . . . [getting] a whole lot better until we get the pandemic under control.” In addition, economists continue to highlight concerns that the pandemic is permanently altering the labor market, eliminating jobs and forcing people into long-term unemployment.
One change in the labor market is shifting hiring patterns. Several economists have noted that over the past few months, many employers have not added permanent positions to their payrolls. Instead, companies are hiring temporary workers, allowing them to quickly adjust in light of what are now inevitable fluctuations in the economy. According to the leader of a staffing firm, “employers are still cautious related to their work force strategy.”
Last week, an additional 787,000 workers filed for state unemployment benefits. According to the DOL, the number of new claims filed was 3,000 less than those filed the week prior. In addition to state benefits, these workers will also receive federal assistance, as states begin to implement Congress’s $900 billion relief package. Though each state’s timeline will vary, one analyst from the National Employment Law Project is confident that “at least half of the states . . . [will] have something up by next week,” increasing weekly unemployment checks by $300 for the next 11 weeks.
On Thursday, President-elect Joe Biden nominated current Boston Mayor, Marty Walsh, to lead the Department of Labor. Before his tenure as mayor, Walsh served as the head of the Boston Building and Construction Trades Council, a group responsible for organizing and coordinating local unions. Many have highlighted Walsh’s support for workers over the years, pointing to both his time in the Massachusetts State Legislature and as mayor. Specifically, he has advocated for policies that protect employee wages and that provide Boston government employees with six weeks of paid parental leave. Though Walsh has garnered the support of groups such as the American Federation of State, County and Municipal Employees (AFSCME) and the American Federation of Teachers (AFT), some are disappointed with Biden’s choice in light of other candidates who would have increased the diversity of his administration. One of those candidates was Julie Su, California’s Secretary of Labor, and a favorite among a diverse array of groups that have called for an Asian American to be included in Biden’s cabinet.
In a recent blog post, the Brookings Institution highlighted the important role that a robust social insurance scheme, such as one that enhances unemployment benefits, can play in helping to both support workers and eliminate disparities among different groups of workers and their families. Using the CARES Act as an example, the authors’ study reveals that this legislation helped to increase monthly disposable personal income (DPI) in 2020, including among lower-income households. This increase occurred even in light of the pandemic and resulting economic upheaval, emphasizing both the government’s ability to provide more consistent and vigorous support for the labor force and the pressing need to do so.