tag:theconversation.com,2011:/us/topics/labor-market-80371/articlesLabor market – The Conversation2024-02-13T20:22:20Ztag:theconversation.com,2011:article/2225802024-02-13T20:22:20Z2024-02-13T20:22:20ZImmigrants do work that might not otherwise get done – bolstering the US economy<figure><img src="https://images.theconversation.com/files/574706/original/file-20240209-22-8e58kg.jpg?ixlib=rb-1.1.0&rect=46%2C303%2C6889%2C4215&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Hundreds protested peacefully in Immokalee, Fla., against a state law enacted in 2023 that imposes restrictions on undocumented immigrants.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/Florida%20Day%20Without%20Immigrants/f748660925de4eb49e9de66ebcb24178?Query=immigrant%20workers&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=1114&currentItemNo=9">AP Photo/Rebecca Blackwell</a></span></figcaption></figure><p>Although Congress is failing to pass laws to restrict the number of migrants arriving in the U.S., a majority of Americans – about 6 in 10 – <a href="https://poll.qu.edu/poll-release?releaseid=3889">believe there’s an immigration crisis</a> along the Mexico-U.S. border. Politicians who want fewer people to move here often cast those arriving without prior authorization as a <a href="https://kstp.com/kstp-news/top-news/lawmakers-push-north-star-act-in-effort-to-make-minnesota-sanctuary-state-republicans-warn-of-economic-burden/">burden on the economy</a>.</p>
<p>As an <a href="https://stockton.academia.edu/RamyaVIjaya">economist who has researched immigration and employment</a>, I’m <a href="https://www.cbo.gov/system/files/2024-02/59710-Outlook-2024.pdf">confident that economic trends</a> and research findings contradict those arguments.</p>
<p>The U.S. is <a href="https://www.uschamber.com/workforce/understanding-americas-labor-shortage">experiencing a labor market shortage</a> that is likely to last well into the future as the U.S.-born population gets older overall, <a href="https://www.bls.gov/opub/mlr/2023/article/labor-force-and-macroeconomic-projections.htm">slowing growth in the number of workers</a>.</p>
<p>Rather than a drain on the economy, an uptick in immigration presents an opportunity to alleviate this shortage. Data from <a href="https://doi.org/10.1080/13545701.2020.1759815">my own research</a> and studies conducted by other scholars show that immigrant workers in the U.S. are more likely to be active in the labor market – either employed or looking for work – and tend to <a href="https://www.brookings.edu/articles/the-immigrant-workforce-supports-millions-of-u-s-jobs/">work in professions with</a> the most unmet demand.</p>
<h2>Help really wanted</h2>
<p>The U.S. had <a href="https://www.bls.gov/news.release/pdf/jolts.pdf">9 million job openings</a> in December 2023, according to the Bureau of Labor Statistics. The government agency also found that there were <a href="https://www.bls.gov/news.release/empsit.nr0.htm">6.1 million unemployed people</a> actively seeking paid work.</p>
<p>Economists generally compare the two numbers to calculate the labor shortage. It currently stands at nearly 3 million workers, and the bureau expects this gap to grow as <a href="https://www.bls.gov/news.release/pdf/ecopro.pdf">the population ages and people have fewer children</a> over the next decade.</p>
<p>In other words, the U.S. faces a long-term shortage of people looking for employment.</p>
<p>That shortfall would be much bigger without foreign-born workers, who accounted for a <a href="https://www.bls.gov/opub/ted/2023/foreign-born-workers-were-a-record-high-18-1-percent-of-the-u-s-civilian-labor-force-in-2022.htm">record high of 18.1%</a> of the U.S. civilian labor force in 2022, according to the Bureau of Labor Statistics.</p>
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<h2>More likely to be active in the workforce</h2>
<p>Another reason why immigrants can help fill that big hole in the U.S. labor market is that so many of them tend to be employed or are looking for work. </p>
<p>About <a href="https://www.bls.gov/news.release/pdf/forbrn.pdf">65.9% of all people who were born elsewhere</a> were either employed or actively looking for work as of 2022, in comparison to 61.5% of people born in the U.S. </p>
<p>This difference has been <a href="https://www.pgpf.org/blog/2022/11/the-foreign-born-labor-force-of-the-united-states">consistent since 2007</a>, according to research by the Peterson Foundation, a think tank that focuses on long-term budget problems.</p>
<p>In a <a href="https://doi.org/10.1080/13545701.2020.1759815">study I conducted a few years ago</a>, I found that immigrants who arrive in the United States as refugees fleeing violence and persecution in their home countries are eventually more likely to be employed or looking for work than people who are born in the U.S.</p>
<h2>More home health aides and janitors</h2>
<p>Some of the labor market’s biggest shortages are especially acute in professions that tend to attract immigrants, <a href="https://theconversation.com/why-the-daunting-economics-of-elder-care-are-about-to-get-much-worse-83123">such as home health aides</a>.</p>
<p>The health care and social services sector as a whole has about <a href="https://www.bls.gov/news.release/jolts.a.htm">1.8 million</a> open jobs, the largest number of job openings currently available.</p>
<p>This is followed by professional and business services with 1.7 million open jobs. This <a href="https://www.bls.gov/iag/tgs/iag60.htm">category encompasses everything from legal services to janitorial work</a>, including cleaning and grounds maintenance.</p>
<p>Currently, about <a href="https://www.bls.gov/news.release/pdf/forbrn.pdf">22% of employed immigrants work</a> in one of those two high-demand categories or another service occupation.</p>
<h2>Making it easier to age in place</h2>
<p>A team of economists has found that the <a href="https://doi.org/10.1111/roie.12607">cost of home health care and support services is lower</a> than average in places with large numbers of immigrant service workers. This in turn makes it more likely that older adults can avoid institutionalization and stay in their own homes. </p>
<p>But, to be sure, immigrant workers providing these vital community support services often <a href="https://doi.org/10.1001/amajethics.2022.890">endure exploitative</a> working conditions. </p>
<p>The labor market data not only makes it clear that the U.S. economy can absorb large numbers of immigrants, but it shows that these newcomers could be a much-needed solution to a labor supply crisis.</p>
<p>And yet people arriving in the U.S. as political asylum applicants are enduring <a href="https://www.washingtonpost.com/business/2023/05/23/one-answer-to-the-migration-crisis-jobs/54096526-f974-11ed-bafc-bf50205661da_story.html">backlogs and facing hurdles in securing employment authorization</a>, which is delaying their entry into the workforce.</p>
<p>Wouldn’t it make more sense for Congress to expand pathways for legal employment access for migrants? From an economic perspective, that seems to be the most prudent course of action.</p><img src="https://counter.theconversation.com/content/222580/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ramya Devan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Despite widespread fears about immigrants being a burden, even those arriving as asylum applicants are more likely to work than the US-born population.Ramya Devan, Professor of Economics, Stockton UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2016032023-03-10T19:05:14Z2023-03-10T19:05:14ZWhy employment remains red hot even as the Federal Reserve tries to put job market on ice<figure><img src="https://images.theconversation.com/files/514743/original/file-20230310-27-t7m84x.jpg?ixlib=rb-1.1.0&rect=0%2C31%2C2995%2C1962&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Is strong hiring fanning the flames of inflation?</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/JobsReport/913d30c6b2e64f20b9cd1eecc7a020ef/photo?Query=jobs&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=58270&currentItemNo=42">AP Photo/Nam Y. Huh</a></span></figcaption></figure><p><em>The <a href="https://www.nytimes.com/live/2023/03/10/business/jobs-report-economy-news">hot U.S. labor market</a> is showing few signs of cooling down, with the latest jobs report showing continued strong gains, particularly in service industries such as retail and hospitality. The robust employment landscape may put pressure on the Federal Reserve to raise rates more than expected later this month in a bid to further tame inflation.</em></p>
<p><em>The U.S. economy <a href="https://www.bls.gov/news.release/empsit.b.htm">added 311,000 jobs</a> in February, the Bureau of Labor Statistics reported on March 10, 2023, <a href="https://www.bloomberg.com/news/articles/2023-03-10/us-payrolls-top-estimates-while-jobless-rate-rises-wages-cool?srnd=premium&sref=Hjm5biAW">higher than economists were forecasting</a>. The unemployment rate <a href="https://www.bls.gov/news.release/empsit.a.htm">ticked up slightly to 3.6%</a>, still near the <a href="https://fred.stlouisfed.org/series/UNRATE">lowest level in over 50 years</a>.</em></p>
<p><em>To better understand what all this means and why the job market remains strong despite the <a href="https://www.nytimes.com/2023/03/07/business/economy/fed-powell-interest-rates.html">most aggressive pace of interest rate hikes</a> since the 1980s, we turned to Edouard Wemy, an <a href="https://www2.clarku.edu/faculty/facultybio.cfm?id=1080">economist at Clark University</a>.</em> </p>
<h2>What stood out for you most in the jobs report?</h2>
<p>It’s kind of strange how the labor market remains quite strong, with notable gains in labor-intensive service sectors like hospitality and leisure, health care and retail. That’s also where wage growth in February was strongest.</p>
<p>For workers, the report is good news, since it suggests if you’re looking for work you’ve got a strong chance of finding a job. The Job Openings and Labor Turnover Survey shows that there are <a href="https://www.bls.gov/jlt/">almost two vacancies</a> for <a href="https://www.bls.gov/news.release/empsit.a.htm">every unemployed worker</a>, which is pretty high compared with an <a href="https://fred.stlouisfed.org/graph/?g=p9aA#">average of under 0.6 vacancies</a> per jobless person before the pandemic.</p>
<p>But it’s very puzzling. Why is the job growth so strong at a time when the Fed has been aggressively raising borrowing costs to tame the <a href="https://fred.stlouisfed.org/series/CPIAUCSL">highest inflation since the 1980s</a>? Typically, a sudden increase in interest rates – and the Fed has raised rates 4.5 percentage points over the past year – <a href="https://www.investopedia.com/ask/answers/101615/what-happens-if-interest-rates-increase-too-quickly.asp">would chill the labor market</a> and send unemployment much higher. </p>
<p>I believe, as is often the case in economics, it’s a question of supply and demand. The Fed has been focused on the latter. Raising the borrowing costs consumers and businesses have to pay should reduce consumer demand for goods and services, which in turn lowers demand for workers. </p>
<p>But the Fed can’t do much about the supply side of the equation – which refers to the number of available workers in the labor market. That’s measured by the <a href="https://fred.stlouisfed.org/series/CIVPART">participation rate</a>, which plunged at the beginning of the pandemic and still hasn’t fully recovered to pre-COVID-19 levels. This is <a href="https://fred.stlouisfed.org/series/LNS11300001">especially true for men</a>, who are participating in the labor market at a rate of 68%, or 1.1 percentage point below February 2020 levels – the equivalent of about 1.5 million men gone from the workforce. </p>
<p>In other words, if the reason the job market is so tight right now is the relatively low participation rate, then that explains why the Fed’s interest rate hikes are not having much of an effect. </p>
<h2>Why is the participation rate still low?</h2>
<p>Economists, me included, are trying to work that out and have some theories.</p>
<p>The pandemic caused significant disruptions to the labor market – first, lockdowns caused unemployment to soar, then trillions of dollars in government aid meant to support the economy made it easier to get by without a job – and this has resulted in structural changes that persist today. </p>
<p><a href="https://www.bostonfed.org/publications/research-department-working-paper/2016/who-counts-as-employed-informal-work-employment-status-and-labor-market-slack.aspx#:%7E:text=Informal%20Work%2C%20Employment%20Status%2C%20and%20Labor%20Market%20Slack,-By%20Anat%20Bracha&text=According%20to%20the%20Bureau%20of,week%20prior%20to%20the%20survey.">Recent research suggests</a> part of the explanation for the lower participation rate is that more younger workers may be joining the gig economy, which isn’t fully reflected in the government’s job and participation numbers. </p>
<h2>What does this mean for Fed’s rate-hike campaign?</h2>
<p>A few weeks ago markets were expecting the Fed to lift interest rates by another quarter-point <a href="https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm">when it meets on March 21-22</a>. <a href="https://markets.businessinsider.com/news/stocks/stocks-markets-jerome-powell-federal-reserve-rate-hikes-march-testimony-2023-3">That changed</a> after Fed Chair Jerome Powell told Congress on March 7 that the rate-hiking campaign still “has a long way to go.” </p>
<p>After the latest jobs report showed the strength of the labor market, I agree that a half-point increase is likely. But I’m hoping the Fed isn’t going to push up rates much more. </p>
<p>If the reason for the hot jobs market is primarily a supply or structural issue, then higher rates aren’t going to have the effect the Fed seeks – and would only increase the odds of recession. So I’m hoping the Fed’s economists recognize this and adjust their strategy. </p>
<h2>What are the odds of a recession?</h2>
<p>I still don’t think a recession is likely, mainly because recent economic data, such as <a href="https://www.cnn.com/2023/03/06/economy/consumers-keep-spending/index.html">solid consumer spending</a> along with the latest jobs report, have been so strong. But also I do believe the Fed will change its tune, accept inflation may be a bit higher than it hopes and slow the pace of rate hikes. </p>
<p>But if the Fed stays focused on driving inflation to near its target of 2% – from an <a href="https://www.bls.gov/news.release/cpi.nr0.htm">annual pace of 6.4% currently</a> – that would greatly increase the odds of a recession this year or the next.</p><img src="https://counter.theconversation.com/content/201603/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Edouard Wemy does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Fed has been trying to tame employment and wages to keep inflation in check. It ain’t working.Edouard Wemy, Assistant Professor of Economics, Clark UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1887812022-09-05T12:21:16Z2022-09-05T12:21:16ZLegal work-related immigration has fallen by a third since 2020, contributing to US labor shortages<figure><img src="https://images.theconversation.com/files/482152/original/file-20220831-4878-9hc3o7.jpg?ixlib=rb-1.1.0&rect=269%2C122%2C7909%2C4709&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The reduction in foreign-born workers is weighing on the economy.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/visitors-at-the-92-ft-long-immigrantsareessential-art-news-photo/1345035892">Paul Morigi/Getty Images for Working Families</a></span></figcaption></figure><p>With Americans having <a href="https://theconversation.com/expanding-opportunities-for-women-and-economic-uncertainty-are-both-factors-in-declining-us-fertility-rates-162494">fewer children</a> and the nation’s labor force <a href="https://www.bakerinstitute.org/research/gray-future-america-shifting-demographics-implications-immigration-reform">getting older</a>, many <a href="https://www.industryweek.com/talent/education-training/article/21248937/to-address-labor-shortages-manufacturers-must-become-talent-creators">employers in manufacturing</a>, <a href="https://www.cnbc.com/2022/08/03/tech-companies-banks-overstaffed-while-airlines-hotels-need-workers.html">aviation</a> and other industries are having trouble finding enough workers.</p>
<p>The gap between the demand for labor and its supply was <a href="https://www.vox.com/2019/3/18/18270916/labor-shortage-workers-us">already forming in 2017</a>. By 2018, the U.S. economy had increasingly more <a href="https://www.bls.gov/jlt/#data">job openings</a> than unemployed workers. That <a href="https://www.richmondfed.org/publications/research/economic_brief/2022/eb_22-12">gap has widened during the COVID-19 pandemic</a> as more people <a href="https://theconversation.com/brains-are-bad-at-big-numbers-making-it-impossible-to-grasp-what-a-million-covid-19-deaths-really-means-179081">have died</a>, <a href="https://www.pbs.org/newshour/show/why-millions-of-older-americans-are-retiring-early-in-the-wake-of-the-pandemic">retired early</a> or simply <a href="https://www.brookings.edu/blog/up-front/2021/12/14/labor-market-exits-and-entrances-are-elevated-who-is-coming-back/">dropped out of the job market</a>.</p>
<p>By July 2022, as the pandemic’s effects on the workplace were easing, the U.S. had <a href="https://www.bls.gov/news.release/jolts.nr0.htm">11.2 million job openings</a> but only <a href="https://www.bls.gov/news.release/empsit.nr0.htm">5.7 million unemployed workers</a> who might fill them.</p>
<p>I’m a <a href="https://www.bakerinstitute.org/expert/jose-ivan-rodriguez-sanchez">scholar of immigration and economics</a> who researches a trend that’s driving labor shortages: <a href="https://www.economicmodeling.com/wp-content/uploads/2022/04/DD2_Bridging_The_Gap_Final.pdf">declining numbers of immigrants allowed to legally work</a> in the U.S. When I study these numbers, I see an important opportunity to resolve labor shortages that are <a href="https://news.ucr.edu/articles/2022/08/03/demographic-dilemma-slowing-population-growth-not-pandemic-root-us-worker">wreaking economic havoc</a>.</p>
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<h2>Work visas</h2>
<p>An estimated <a href="https://econofact.org/the-decline-in-u-s-net-migration">45 million people</a> living in the United States, roughly 14% of the population, were born elsewhere. About <a href="https://econofact.org/immigrant-earnings-and-out-migration-from-the-united-states">one in six U.S. workers is an immigrant</a>.</p>
<p>Some of these foreign-born workers are legally employed on a temporary basis with <a href="https://www.lexisnexis.com/community/insights/legal/b/thought-leadership/posts/the-three-ways-non-u-s-citizens-can-legally-live-and-work-in-the-united-states">an array of visas</a> that make it possible to obtain jobs that run the gamut from software designers to apple pickers.</p>
<p>In some cases, these employees can obtain <a href="https://www.uscis.gov/green-card/green-card-eligibility/green-card-for-employment-based-immigrants">legal permanent residency</a> – often called “a green card.” Some temporary work visas last longer than 12 months, so the <a href="https://uploads.fas.org/2020/10/Temporary-Work-Visa-Holders-2020.pdf">number of workers with authorization is higher</a> than the number of visas issued in that year. <a href="https://www.uscis.gov/working-in-the-united-states/h-1b-specialty-occupations">H-1B visas</a>, which require a high level of education for fields like computer programming, last three years and can be <a href="https://www.immi-usa.com/h1b-visa/h1b-visa-extension/">renewed for another three</a>. </p>
<p>The government issued a <a href="https://travel.state.gov/content/travel/en/legal/visa-law0/visa-statistics/nonimmigrant-visa-statistics.html">record 813,330 temporary employment-based visas in 2019</a>. The total fell by about a third to 566,000 in 2020, as the COVID-19 pandemic got underway, and the numbers were basically flat in 2021 at 566,001 – the first year of Joe Biden’s presidency.</p>
<p>Of course it’s important that the government not issue visas in such a way that <a href="https://www.npr.org/2017/08/04/541321716/fact-check-have-low-skilled-immigrants-taken-american-jobs">foreign workers depress wages</a> or lead to the dismissal of gainfully employed Americans.</p>
<p>These lower wages could occur in the short run, but <a href="https://budgetmodel.wharton.upenn.edu/issues/2016/1/27/the-effects-of-immigration-on-the-united-states-economy">most empirical studies</a> show there are long-term benefits in terms of what native-born people earn when immigration rises.</p>
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<h2>Taking a bite out of the economy</h2>
<p>The sharp reduction in the number of temporary visas for foreign-born workers in 2020 and 2021 harmed the U.S. economy. Based on my own calculations, the total cost was around <a href="https://www.bakerinstitute.org/research/immigrants-in-strategic-sectors-of-the-us-economy-and-americas-labor-shortage-crisis">0.4% per year of total gross domestic product</a> – at least $82 billion per year in 2020 and 2021.</p>
<p>Immigration restrictions affected far more people, however, including those who were unable to obtain a green card because of the closure of embassies and consulates. All told, these policies resulted in an estimated <a href="https://globalmigration.ucdavis.edu/news/giovanni-peri-and-reem-zaiour-econofact-and-marketwatch">2 million fewer working-age immigrants</a> in the U.S. in 2020 and 2021. </p>
<p>Including those additional losses nearly triples the economic cost of U.S. immigration restrictions to about <a href="https://www.bakerinstitute.org/research/immigrants-in-strategic-sectors-of-the-us-economy-and-americas-labor-shortage-crisis">1.1% per year of U.S. GDP</a>.</p>
<p>Unless the U.S. reverses course and issues more work-related visas, I estimate that the worker shortage will double to over 4 million by 2030. My calculations also suggest this will <a href="https://www.bakerinstitute.org/research/immigrants-in-strategic-sectors-of-the-us-economy-and-americas-labor-shortage-crisis">shave about 4.3% off of GDP</a>, on average, annually for the next eight years. Adding that all up, that would amount to about $9 trillion in lost economic output. </p>
<h2>Labor shortages</h2>
<p>Labor shortages are especially severe today in certain industries that rely heavily on immigrants as employees.</p>
<p>For example, <a href="https://www.bakerinstitute.org/research/immigrants-in-strategic-sectors-of-the-us-economy-and-americas-labor-shortage-crisis">in 2020 foreign-born workers accounted</a> for 39% of the farming, fishing and forestry workforce, 30% of all people employed in construction and extraction, 26% of everyone working in computer science and mathematics and 22% in health care support.</p>
<p>As a result, <a href="https://www.lawinfo.com/resources/immigration/employment-based-immigration/how-immigration-affects-u-s-business-and-tech-industries.html">these industries are facing unprecedented challenges</a> in trying to find workers to <a href="https://www.cbsnews.com/news/immigration-jobs-workers-labor-shortage/">fill open jobs</a>.</p>
<p>If these labor shortages continue, I’m certain that they will keep hurting job markets, supply chains and productivity as <a href="https://www.uschamber.com/workforce/how-fixing-our-worker-shortage-can-fight-inflation">companies have to pay their employees more</a> and then increase prices due in part to those <a href="https://www.wsj.com/articles/labor-shortage-is-vexing-challenge-for-u-s-economy-11660469401">higher labor costs</a>.</p>
<p>The <a href="https://fred.stlouisfed.org/series/CIVPART">labor force participation rate</a>, which measures the number of people in the job market as a percentage of the total working-age population, has been hovering around the lowest levels seen since the 1970s as more U.S. workers drop out of the job market. After plunging to 60% in 2020, it bounced back partially. The rate stood at 62.2% in July 2022.</p>
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<h2>Feasible fix</h2>
<p>Of course, there are other factors besides a lack of foreign-born visas issued that are responsible for the shortage of workers.</p>
<p>But none are easy to resolve. It’s hard for the government to increase the share of <a href="https://www.brookings.edu/research/labor-force-nonparticipation-trends-causes-and-policy-solutions/">adults who are working</a>, and there’s little that can be done in the short term about the <a href="https://www.bls.gov/opub/ted/2021/number-of-people-75-and-older-in-the-labor-force-is-expected-to-grow-96-5-percent-by-2030.ht">country’s aging workforce</a> – the result of a <a href="https://www.cdc.gov/nchs/pressroom/nchs_press_releases/2022/20220524.htm">long-term fertility decline</a>.</p>
<p>Even if the <a href="https://www.brookings.edu/blog/fixgov/2014/11/20/four-realities-about-executive-actions-moving-beyond-the-rhetoric-of-immigration-reform/">political hurdles can be high</a>, I believe boosting the number of immigrants allowed to legally work in the United States is an important way that the authorities can ease labor shortages.</p><img src="https://counter.theconversation.com/content/188781/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jose Ivan Rodriguez-Sanchez receives funding from the Charles Koch Foundation. He is affiliated with Rice University’s Baker Institute for Public Policy. </span></em></p>The immigration decline over the first two years of the coronavirus pandemic led to an annual 1.1% GDP reduction, an economist estimates.Jose Ivan Rodriguez-Sanchez, Research Scholar of Economics, Rice UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1876782022-08-01T12:25:41Z2022-08-01T12:25:41ZInflation is spiking around the world – not just in the United States<figure><img src="https://images.theconversation.com/files/476382/original/file-20220727-15-mm5ak8.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C3000%2C1998&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Rates are spiking in most comparable countries.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/chart-on-a-laptop-computer-with-banknotes-and-coins-on-4-news-photo/1362689276">Jesus Hellin/Europa Press via Getty Images</a></span></figcaption></figure><p>The <a href="https://www.bls.gov/opub/ted/2022/consumer-prices-up-9-1-percent-over-the-year-ended-june-2022-largest-increase-in-40-years.htm">9.1% increase in U.S. consumer prices</a> in the 12 months ending in June 2022, the highest in four decades, has prompted <a href="https://www.axios.com/2022/07/13/june-cpi-report-inflation-fed-biden">many</a> <a href="https://www.yahoo.com/video/3-warning-signs-9-1-170210085.html">sobering</a> <a href="https://www.cnbc.com/2022/07/13/inflation-rose-9point1percent-in-june-even-more-than-expected-as-price-pressures-intensify.html">headlines</a>.</p>
<p>Meanwhile, annual inflation in Germany and the U.K. – countries with comparable economies – ran nearly as high: 7.5% and 8.2%, respectively, for the 12 months ending in June 2022. In Spain, <a href="https://data.imf.org/">inflation has hit 10%</a>. </p>
<p>It might seem like U.S. policies brought on this predicament, but <a href="https://scholar.google.com/citations?user=rRWXpyYAAAAJ&hl=en&oi=sra">economists like me</a> doubt it because <a href="https://www.reuters.com/article/us-emerging-inflation-graphic-idUSKCN24O20J">inflation</a> is <a href="https://www.pewresearch.org/fact-tank/2022/06/15/in-the-u-s-and-around-the-world-inflation-is-high-and-getting-higher/">spiking everywhere</a>, with few exceptions. <a href="https://data.oecd.org/price/inflation-cpi.htm">Rates averaged 9.65%</a> in the 38 largely wealthy countries that belong to the Organization for Economic Cooperation and Development through May 2022.</p>
<p>What revved up those <a href="https://www.stlouisfed.org/on-the-economy/2022/apr/2021-year-high-inflation">price increases starting in early 2021</a>?</p>
<p><iframe id="UZccs" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/UZccs/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>Scarcity put pressure on prices everywhere</h2>
<p>When the COVID-19 pandemic began, demand for computers and other high-tech goods soared as many people switched from <a href="https://www.cnn.com/2021/03/09/success/remote-work-covid-pandemic-one-year-later/index.html">working in offices to clocking in at home</a>.</p>
<p>Computer chip manufacturers struggled to keep up, leading to chip shortages and <a href="https://www.bloomberg.com/graphics/2021-semiconductors-chips-shortage/">higher prices for a dizzying array of devices</a> and machines requiring them, including refrigerators, cars and smartphones.</p>
<p>It’s not just chips. Many of the goods Americans consume, such as cars, televisions and prescription drugs, are <a href="https://www.census.gov/foreign-trade/Press-Release/ft900/final_2021.pdf">imported from all corners of the world</a>.</p>
<h2>Supply chain strains</h2>
<p>On top of problems tied to supply and demand changes, there have been major disruptions to how goods move to manufacturers and then onto consumers along what’s known as the <a href="https://theconversation.com/4-reasons-americans-are-still-seeing-empty-shelves-and-long-waits-with-christmas-just-around-the-corner-168635">supply chain</a>.</p>
<p>Freight disruption, whether by ship, train or truck, has interfered with the delivery of all sorts of goods since 2020. That’s caused the <a href="https://www.investing.com/indices/baltic-dry-historical-data">cost of shipping goods to rise sharply</a>.</p>
<p>These massive shipping disruptions have exposed the disadvantages of the popular <a href="https://www.constructiondive.com/news/inventory-lean-just-in-time-shortage-supply-chain/610029/">just-in-time</a> practice for managing inventory. </p>
<p>By keeping as little of the materials needed to make their products on hand, companies become more vulnerable to shortages and transportation snafus. And when manufacturers are unable to make their products quickly, shortages occur and prices surge. </p>
<p>This approach, especially when it involves the reliance on far-flung suppliers, has left businesses much more susceptible to market shocks.</p>
<h2>Labor complications</h2>
<p>The beginning of the pandemic also sent <a href="https://theconversation.com/covid-19-is-hitting-tipped-workers-hard-141515">shock waves through labor markets</a> with <a href="https://www.pewresearch.org/social-trends/2022/07/28/majority-of-u-s-workers-changing-jobs-are-seeing-real-wage-gains/">lasting effects</a>.</p>
<p>Many businesses either fired or furloughed large numbers of workers in 2020. When governments began to relax restrictions related to the pandemic, many employers found that significant numbers of their <a href="https://www.brookings.edu/blog/the-avenue/2022/01/12/why-the-pandemics-record-breaking-quit-rates-are-a-boon-to-workers/">former workers were unwilling to return to work</a>.</p>
<p>Whether those workers had <a href="https://www.investmentnews.com/covid-early-retirement-rearch-213183">chosen to retire early</a>, seek new <a href="https://www.investmentnews.com/covid-early-retirement-rearch-213183">jobs offering a better work-life balance</a> or <a href="https://www.washingtonpost.com/health/2022/06/06/long-covid-disability-advocacy/">become disabled</a>, the results were the same: labor shortages that required higher wages to <a href="https://www.washingtonpost.com/business/2021/06/10/worker-shortage-raising-wages/">recruit replacements and retain other employees</a>.</p>
<p>Again, all of these dynamics are <a href="https://data.oecd.org/price/inflation-cpi.htm">occurring globally</a>, <a href="https://data.worldbank.org/indicator/FP.CPI.TOTL.ZG">not just in the U.S.</a></p>
<h2>War in Ukraine compounded these woes</h2>
<p>Russia’s war on Ukraine, which began officially on <a href="https://www.pbs.org/wgbh/frontline/interactive/ap-russia-war-crimes-ukraine/">Feb. 24, 2022</a>, has also exacerbated inflation by interfering with the <a href="https://www.brookings.edu/podcast-episode/how-the-ukraine-war-is-affecting-oil-and-gas-markets/">global supply of fuels</a> and <a href="https://www.brookings.edu/podcast-episode/how-the-ukraine-war-is-affecting-oil-and-gas-markets/">grains</a>. </p>
<p>The conflict’s effects are reverberating around the globe and <a href="https://www.federalreserve.gov/econres/notes/feds-notes/the-effect-of-the-war-in-ukraine-on-global-activity-and-inflation-20220527.htm">fueling inflation</a>.</p>
<p>Russia is the world’s <a href="https://www.investopedia.com/articles/company-insights/082316/worlds-top-10-oil-exporters.asp">second-largest exporter of crude oil</a>. Sanctions against Russian imports, combined with <a href="https://www.reuters.com/world/europe/russian-gas-cut-europe-hits-economic-hopes-after-ukraine-grain-deal-2022-07-25/">Russia halting oil shipments to European countries</a> in retaliation, has led to disruptions in the global oil market.</p>
<p>As Europe buys more oil from the Middle East, demand for oil from that region increases, prompting price increases. <a href="https://oilprice.com/oil-price-charts/">Crude prices jumped</a> from $101 per barrel in late February 2022, to $123 a month later. Prices stayed high for several months but by late July were around $100 a barrel again.</p>
<p><a href="https://www.weforum.org/agenda/2022/04/food-prices-fao-index-cereals-commodities-exports/">Food prices have increased substantially</a> in the U.S. and elsewhere, partly due to this conflict. Ukraine possesses some of the most fertile soil in the world and is the <a href="https://www.worldstopexports.com/corn-exports-country/">third-largest exporter of corn</a>.</p>
<p>Russia’s destruction of Ukrainian crops and its <a href="https://www.nytimes.com/2022/06/20/world/europe/russia-blockade-ukraine-grain.html">blockade of Ukrainian exports</a> have led to <a href="https://theconversation.com/war-in-ukraine-is-pushing-global-acute-hunger-to-the-highest-level-in-this-century-181414">significant price increases worldwide</a> for <a href="https://abcnews.go.com/Politics/war-ukraine-catastrophic-effect-global-food-supply-prices/story?id=84418447">agricultural commodities</a>.</p>
<h2>How will the world respond?</h2>
<p><a href="https://www.weforum.org/agenda/2021/08/what-do-people-think-about-trade-and-globalization/">Support for globalization and international trade has waned</a> in recent years. Given supply chain disruptions and the war in Ukraine fueling inflation, this trend will likely continue.</p>
<p>However, as an economist, I believe the benefits of free and open trade still outweigh current challenges.</p>
<p>In my view, there isn’t anything fundamentally wrong with the globalization that <a href="https://www.newsweek.com/how-fix-globalization-82947">cannot be fixed</a>. But, like quelling inflation and alleviating supply chain bottlenecks, it will take time.</p><img src="https://counter.theconversation.com/content/187678/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Decker does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Labor market disruptions, supply chain strains and the war in Ukraine have taken a toll everywhere.Christopher Decker, Professor of Economics, University of Nebraska OmahaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1764882022-02-04T18:17:50Z2022-02-04T18:17:50ZAmericans are returning to the labor force at a quickening rate – do they just really need the work?<figure><img src="https://images.theconversation.com/files/444570/original/file-20220204-19-1jc0lr.jpg?ixlib=rb-1.1.0&rect=0%2C14%2C4748%2C3146&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Plenty of places hiring, and more people looking for jobs.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/UnemploymentBenefits/dead64836f67465cb740142dcceba549/photo?Query=jobs%20market&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=2517&currentItemNo=21">AP Photo/Nam Y. Hu</a></span></figcaption></figure><p>The U.S. economy surprised analysts by adding 467,000 jobs in January, overcoming omicron concerns and continuing a long streak of gains, the <a href="https://www.bls.gov/news.release/empsit.nr0.htm">Bureau of Labor Statistics reported</a> on Feb. 4, 2022.</p>
<p>Yet at the same time, the unemployment rate ticked up a notch, <a href="https://www.bls.gov/news.release/empsit.a.htm">from 3.9% to 4%</a>. </p>
<p>Confused? Shouldn’t a large increase in jobs drive joblessness lower? </p>
<p>Usually, the main culprit behind these types of conflicting results is an increase in the number of people rejoining the labor market. I believe that must be the case here – and recent data show a clear trend in this direction – even though the BLS has adjusted its latest data in a way that makes it harder to see what’s going on or make historical comparisons.</p>
<p><iframe id="tZLRn" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/tZLRn/5/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>The share of working-age Americans either in work or looking for work – known as the labor participation rate – dropped steeply at the beginning of the pandemic.</p>
<p>But there are signs that labor participation may finally be turning around. From a low of 60.2% in April 2020, it has slowly risen since. And <a href="https://www.bls.gov/news.release/empsit.nr0.htm">the latest report</a> showed it reached 62.2% in December and January, the highest since the depths of the pandemic in mid-2020. The 2.2 percentage point gain since April 2020 may not seem huge, but it equates to about 5.8 million people rejoining the workforce.</p>
<p>As an <a href="https://scholar.google.com/citations?user=rRWXpyYAAAAJ&hl=en&oi=ao">economist who has been following the labor market closely for the past year</a>, I think people are being both encouraged and forced back into looking for work. My interpretation of the evidence suggests that <a href="https://theconversation.com/the-great-resignation-historical-data-and-a-deeper-analysis-show-its-not-as-great-as-screaming-headlines-suggest-174454">those who quit</a> and held off getting back into the labor force are now finding job opportunities that are too valuable to pass up. </p>
<p>For one thing, wages continue to increase – they grew rapidly in January 2022, with average hourly wages <a href="https://www.bls.gov/news.release/empsit.t19.htm">up 5.6% from a year earlier</a>. </p>
<p>At the same time, it appears that many businesses are responding to <a href="https://www.businessinsider.com/workers-want-work-life-balance-more-than-higher-pay-2021-8">workers’ desires for some flexibility</a> in scheduling and a better work/life balance. </p>
<p>Greater job flexibility can be seen in the jump in the number of Americans working remotely. The number of employees working from home because of the pandemic <a href="https://www.bls.gov/news.release/empsit.nr0.htm">increased to 15.4% of the workforce in January</a>, as the omicron variant spread and staffers were given the option to work from home. </p>
<p>But it isn’t just employer-driven factors behind the increase in labor participation.</p>
<p>For those without a job and stable income, personal resources can get depleted over time. Some people who left the workforce early on in the pandemic may have been able to get by and cover essential spending such as housing and groceries by relying on personal savings, support from family members or <a href="https://www.nber.org/digest-202202/covid-19-unemployment-benefits-slowed-return-work">generous pandemic-related government benefits</a>.</p>
<p>Those resources are not infinite, however. The <a href="https://fred.stlouisfed.org/series/UEMP27OV">number of long-term unemployed Americans declined</a> in January, following a trend observed throughout 2021, suggesting that a growing number are returning to the workforce. </p>
<p>Moreover, the <a href="https://www.bls.gov/news.release/cpi.nr0.htm">cost of living is soaring at the fastest pace</a> in 40 years. And for households that had been relying on a single income during the pandemic, the problem is made worse by the fact that wages are lagging behind, putting pressure on families. </p>
<p>In other words, job holdouts might not be able out hold out much longer if inflation continues to outpace wage increases.</p>
<p><iframe id="4Ohcl" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/4Ohcl/3/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>But even with the recent uptick in the labor participation rate, the U.S. economy still has a long way to go before the <a href="https://www.cnn.com/2021/12/25/economy/labor-shortage-early-retirement-charts/index.html">ongoing labor shortages</a> hammering companies end and the job markets return to pre-pandemic levels. </p>
<p><em>Editor’s note: This article was updated on Feb. 7, 2022 to take into account the U.S. Bureau of Labor Statistics’ revised statistics for December.</em></p>
<p>[<em>Over 140,000 readers rely on The Conversation’s newsletters to understand the world.</em> <a href="https://memberservices.theconversation.com/newsletters/?source=inline-140ksignup">Sign up today</a>.]</p><img src="https://counter.theconversation.com/content/176488/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Decker does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While the uptick in the unemployment rate in January may seem like bad news, the reason it rose actually shows the labor market returning to normal.Christopher Decker, Professor of Economics, University of Nebraska OmahaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1745882022-01-31T13:00:43Z2022-01-31T13:00:43ZBad managers, burnout and health fears: Why record numbers of hospitality workers are quitting the industry for good<figure><img src="https://images.theconversation.com/files/443206/original/file-20220128-13-dvs5n9.jpg?ixlib=rb-1.1.0&rect=181%2C94%2C5570%2C3733&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Dealing with customers every day can put significant stress on hospitality workers. </span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/VirusOutbreakNewYork/9da6a49f3149473fa1020b2052a28f64/photo?Query=waiter%20&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=3031&currentItemNo=30">AP Photo/Mark Lennihan</a></span></figcaption></figure><p>About 3.5 million people have <a href="https://fred.stlouisfed.org/series/PAYEMS">at least temporarily left the U.S. workforce</a> since March 2020. <a href="https://fred.stlouisfed.org/series/USLAH">Over one-third of them</a> – 1.2 million – are in the leisure and hospitality industry. </p>
<p>This has created huge problems for restaurants, hotels and other leisure and hospitality businesses that have struggled to find workers for <a href="https://fred.stlouisfed.org/series/JTS7000JOL">record numbers of job openings in 2021</a>. </p>
<p>A big part of this decline seems to be explained by the “<a href="https://theconversation.com/us/topics/great-resignation-112723">great resignation</a>.” Leisure and hospitality workers are quitting at the <a href="https://www.bls.gov/news.release/jolts.t04.htm">highest rates of any industry</a>. About 1 million quit in November 2021 alone. And the data suggests many of them are not simply swapping one hospitality job for another but leaving the industry entirely. </p>
<p>Why are these workers quitting, where are they going and what can be done to bring them back? </p>
<p>We recently commissioned a survey aimed at tracking down some of these workers and answering these questions. The research is ongoing, but our early qualitative results offer some clues to answering these questions. </p>
<h2>Reasons for attrition</h2>
<p>Before we get to our early data, there are several characteristics of leisure and hospitality work that help explain why the industry <a href="https://www.schedulehead.com/8-reasons-for-employee-turnover-in-hospitality/">has unusually high turnover rates</a>.</p>
<p>For one thing, the wages are very low. Leisure and hospitality workers <a href="https://www.bls.gov/news.release/empsit.t19.htm">were earning an average of US$515 a week</a> – including tips – as of December 2021, making them the worst-paid of all sectors, according to Bureau of Labor Statistics data. That’s less than half of the average for all private workers and translates into annual income of under $27,000 – based on 52 weeks of pay.</p>
<p>This puts financial stress on these employees, often forcing them to work <a href="https://www.fastcasual.com/news/study-why-hourly-workers-forced-to-work-multiple-jobs/">multiple jobs to get by</a>.</p>
<p>The working hours are also challenging, <a href="https://www.insider.com/when-not-to-eat-at-a-restaurant-2019-3">often involving nights</a>, <a href="https://www.eatthis.com/worst-day-eat-chain-restaurant/">weekends</a> and <a href="https://www.emerald.com/insight/content/doi/10.1108/IJCHM-02-2017-0105/full/html">holidays</a>, which means hospitality workers routinely miss out on time with friends and family, limiting opportunities to recharge their emotional batteries. </p>
<p>Moreover, the nature of the jobs in this sector are particularly stressful and emotionally draining. In fact, <a href="https://www.ucpress.edu/book/9780520272941/the-managed-heart">sociologists</a> and economists have a phrase for this: <a href="https://www.vogue.com/article/what-is-emotional-labor">emotional labor</a>. This concept refers to the suppression of whatever emotions an employee may be experiencing to provide good service to a customer – and often “<a href="https://www.psychologicalscience.org/news/minds-business/what-service-with-a-smile-means-for-employee-well-being.html">with a smile</a>.”</p>
<p>In hospitality, employees must regulate the outward expression of their emotions to the benefit of the customer and their employer, regardless of what they are feeling. Sometimes this puts little or no burden on the employee, but at other times it takes a <a href="https://doi.org/10.1108/IJCHM-03-2017-0176">great emotional toll</a>. </p>
<p>The COVID-19 pandemic <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7574898/">has amped up the emotional labor</a> of service work considerably. </p>
<p>The new stressors include massive furloughs and layoffs since March 2020, significant risks to personal health by having little choice but to work at a physical location where workers regularly are in close proximity to colleagues and customers, as well as fights with patrons over <a href="https://www.today.com/food/food-workers-discuss-pandemic-confrontations-angry-customers-t224537">enforcing mask bans and vaccine mandates</a>. The news media regularly report on angry and even violent confrontations between <a href="https://www.wsj.com/articles/restaurants-and-hotels-push-back-against-the-uptick-in-customer-tantrums-11632821400">customers and service workers</a>, whether on <a href="https://www.cnn.com/travel/article/unruly-airline-passengers-faa-2021/index.html">planes</a>, in <a href="https://www.today.com/food/restaurants-struggling-unruly-patrons-t186105">restaurants</a> or in other types of <a href="https://www.bbc.com/worklife/article/20211007-the-service-roles-that-lead-to-burnout">establishments</a>.</p>
<figure class="align-center ">
<img alt="Two customers – one wearing a mask, one not – hold up their phones to a waiter wearing a mask to show their vaccination status" src="https://images.theconversation.com/files/443205/original/file-20220128-25-7o2v0e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/443205/original/file-20220128-25-7o2v0e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/443205/original/file-20220128-25-7o2v0e.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/443205/original/file-20220128-25-7o2v0e.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/443205/original/file-20220128-25-7o2v0e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/443205/original/file-20220128-25-7o2v0e.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/443205/original/file-20220128-25-7o2v0e.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Hospitality workers are required to enforce vaccine and mask mandates, which has led to altercations.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/VirusOutbreakCalifornia/ba05c94c2d3a48b5abd8514f4483e4a4/photo?Query=waiter%20&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=3031&currentItemNo=14">AP Photo/Damian Dovarganes</a></span>
</figcaption>
</figure>
<h2>Finding the ‘quitters’</h2>
<p>While there’s been a ton of coverage of the sector’s <a href="https://fred.stlouisfed.org/series/JTS7000QUR">record quit rate</a> – which dipped slightly to 5.8% in December – there’s less hard data on why hospitality workers are leaving their jobs now and where they are going.</p>
<p>So as part of an ongoing project studying employee attrition, we asked Qualtrics – an employee and customer experience data-gathering company – to find people who worked in the hospitality sector before and during the COVID-19 pandemic and have since left the industry – a process that was exceedingly difficult. </p>
<p>We completed a qualitative unpublished pilot study in December 2021 to help inform a larger quantitative survey we’re working on right now. Our initial results, which include open-ended responses from 31 people, aren’t necessarily representative of all or even most workers who have quit their jobs but allow us to paint a more complete picture of what’s driving the decisions of these specific individuals. We asked them why they left, where they went and what could lure them back to a hospitality job. </p>
<p>We used their answers to construct questions that are appropriate for in-depth statistical analysis, which will then be administered to 350 people who agree to take part in the quantitative survey. Results of that survey will be available in a couple months. </p>
<h2>Why people are leaving</h2>
<p>Our first question focused on what drove people to not only quit their jobs but leave the hospitality sector. The most common responses related to health and safety concerns, burnout and issues involving managers or co-workers. </p>
<p>One of our respondents was a 35-year-old single mother who said she had been working in the food service industry for about five years before the pandemic hit. She quit her job four months later. </p>
<p>“My safety and my family’s safety were on the line and I was being overworked,” she said. </p>
<p>A 20-year-old man said he left the hotel industry during the pandemic after five years “because I truly wasn’t happy” and “didn’t have the will to keep going on.” </p>
<p>Another 35-year-old woman said she quit her job on a cruise ship because she cares for her elderly parents, who would be more at risk were they exposed to COVID-19. </p>
<p>“They didn’t care about our well-being,” she said. “I have family at home that can die if exposed to COVID.”</p>
<h2>Where did they go</h2>
<p>As for what the people in our survey decided to do after leaving the industry, the most common answer was to get more education. But others emphasized a desire to go into business for themselves or to a different type of service job, such as in retail. </p>
<p>A 21-year-old man who had been working at nightclubs for over three years said he quit to go to college.</p>
<p>Both the 35-year-old single mother and 20-year-old man said they decided to become self-employed. </p>
<p>Another 23-year-old single mother who had worked in food service before and during the pandemic left for retail, stating: “I got another job as a cashier and it was the only thing I could find at that moment.”</p>
<h2>Would they go back</h2>
<p>Most of our participants told us nothing would bring them back to these types of jobs – they were done with the industry. The 35-year-old single mother, for example, said there was nothing that could be done to bring her back now that she had moved on with her own business.</p>
<p>But others said better money or hours would help lure them back, as well as stronger managerial support. </p>
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<p>A 42-year-old woman who spent nearly a decade in the food service industry said she would return for “better pay and more respect,” a sentiment echoed by others. </p>
<p>An 18-year-old woman said she quit a food service job because of a manager with a “really bad temper” who would “cuss at customers and employees.” She said that the only way she would go back to hospitality work is if a company showed her “that managers are actually there to help employees.”</p>
<p>“I would also like customers to be more patient and humble,” she added.</p>
<p><em>Updated to add new quit rate data.</em></p><img src="https://counter.theconversation.com/content/174588/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>New research shines light on what is driving hospitality workers – like waiters and hotel workers – to abandon the industry as part of the ‘great resignation.’Andrew Moreo, Assistant Professor of Hospitality Management and Director of Research, Florida International UniversityImran Rahman, Associate Professor of Consumer Behavior, Auburn UniversityLisa Cain, Associate Professor of Hospitality Leadership and Marketing Management, Florida International UniversityTrishna G. Mistry, Assistant Professor of Hospitality Management, University of South FloridaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1745342022-01-07T17:50:32Z2022-01-07T17:50:32ZLurking behind lackluster jobs gain are a stagnating labor market and the threat of omicron<figure><img src="https://images.theconversation.com/files/439847/original/file-20220107-34182-12c3t6m.jpg?ixlib=rb-1.1.0&rect=0%2C8%2C5774%2C3809&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Flipping jobs?</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/JobsHiring/9e0cb556d2c5492b8b2fe2561e2ad0ca/photo?Query=hiring&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=15002&currentItemNo=13">AP Photo/Jenny Kane</a></span></figcaption></figure><p>The first U.S. <a href="https://www.bls.gov/news.release/archives/empsit_01072022.htm">jobs report of 2022</a> showed continued – if lackluster – growth. But perhaps of greater significance for the economic year ahead are two factors that lurked behind the headline unemployment rate: a stagnating labor pool and the impact of omicron.</p>
<p>First, the good news. The economy did <a href="https://www.bloomberg.com/news/articles/2022-01-07/u-s-adds-fewer-jobs-than-forecast-unemployment-rate-falls">add jobs in December</a>, 199,000 of them, with gains in most sectors. This was less than the 440,000-job increase that <a href="https://www.barrons.com/amp/news/possible-us-job-boom-in-december-lynchpin-to-fed-rate-hikes-01641520209">some economists expected</a>. Still, the gains are an indication of a reasonably healthy economy.</p>
<p>And October and November jobs numbers were revised upward by the Bureau of Labor Statistics. Meanwhile, gains were seen across a number of key sectors. The leisure and hospitality sector was up, as expected given recent trends, as were business services and manufacturing.</p>
<p>Construction was also up and should continue to gain in the months to come – if it can find the workers.</p>
<h2>The stagnating labor market</h2>
<p>The unemployment rate was down to 3.9% – a <a href="https://finance.yahoo.com/news/december-2021-jobs-report-labor-department-unemployment-usa-192453058.html">new low in the pandemic era</a>. This is good, to a degree. People who want jobs are finding them.</p>
<p>The problem is employers are having a hard time finding the workers amid a somewhat <a href="https://www.nytimes.com/2021/01/08/business/labor-force-participation-is-stagnating-and-some-workers-may-never-come-back.html">stagnating labor market</a>.</p>
<p>The number of people in the labor force <a href="https://www.bls.gov/news.release/archives/empsit_01072022.htm">increased a little in December</a>, but not by much – only about 168,000. And with job openings outpacing this small increase in the labor market, there remains a significant risk that worker wages may begin to rise too quickly for the economy. </p>
<p>While this is great for workers, it poses a concern for those trying to tamp down the rising prices of goods. Higher wages in the hands of workers means more money to spend, which generally drives prices of goods upward.</p>
<p>The latest report shows that wages are up, hours worked remain constant and the participation rate was unchanged. Even the number of people not in the labor force but wanting a job changed little. It is very much a sellers market in labor right now. Strikes, wage pressure and more flexible work environments may become the new normal.</p>
<p>Separate data from November, <a href="https://www.bls.gov/news.release/jolts.nr0.htm">released on Jan. 4, 2021, by the Bureau of Labor Statistics</a>, provides further evidence of a drying up labor market. There were 6.9 million hires that month but 10.6 million job openings – a clear imbalance. Meanwhile the share of workers voluntarily quitting their jobs continued to be high.</p>
<p>It appears that many Americans who lost their jobs in 2020 have either <a href="https://www.cnn.com/2021/12/15/economy/labor-force-retirement-great-resignation/index.html">taken early retirement</a> or are still delaying re-entering the workforce.</p>
<p>And those hesitating to rush back to the office or factory floor are unlikely to be encouraged by the problem not yet reflected in jobs data: omicron.</p>
<h2>The slowdown to come</h2>
<p>The latest jobs report does not really reflect the effect of omicron on the labor market. The monthly jobs data is typically collected mid-month – before the highly contagious COVID-19 variant really took hold in the U.S.</p>
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<p>But if the U.S. doesn’t see omicron cases peaking soon, Americans will likely see some real slowdown in hiring. With more workers falling ill and unable to work, managers at retail stores, as well as bars and restaurants, may well be forced to reduce hours of operation, reducing revenue and slowing growth in the process.</p>
<p>We are already seeing this with airlines, which have been forced to cancel flights. The real sectors at risk here are the leisure and hospitality sectors and retail – two industries that have bounced back quite well of late.</p>
<p>This may all sound a little downbeat given that the December jobs report did show gains. Growth is growth – it is just that the risks to the economy are quite high right now.</p><img src="https://counter.theconversation.com/content/174534/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Decker does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The job market continued to improve in December, but a stagnating labor pool will pose more challenges for employers in 2022.Christopher Decker, Professor of Economics, University of Nebraska OmahaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1473822020-11-06T19:14:59Z2020-11-06T19:14:59ZJob policies that offer generous unemployment benefits create more happiness – for everyone<figure><img src="https://images.theconversation.com/files/367974/original/file-20201106-13-1b5ee36.jpg?ixlib=rb-1.1.0&rect=22%2C49%2C2980%2C1891&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Turn that frown upside down.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/happy-sad-royalty-free-image/91048634">shaunl/iStock via Getty Images</a></span></figcaption></figure><p>Losing one’s job undoubtedly makes someone less happy, a feeling <a href="https://news.un.org/en/story/2020/06/1067432">tens of millions of people around the world are experiencing</a> right now. Even as the labor market recovers, as we saw in the <a href="https://www.bls.gov/news.release/empsit.nr0.htm">latest U.S. employment report</a> on Nov. 6, the number of people who have been without a job for more than 26 weeks <a href="https://www.nytimes.com/live/2020/11/06/business/us-economy-coronavirus">continues to increase</a>. </p>
<p>Governments <a href="https://www.ilo.org/global/topics/coronavirus/regional-country/country-responses/lang--en/index.htm">have implemented a wide variety of labor market policies</a> to address the pandemic’s impact, from beefing up funding of existing unemployment policies to supplemental income programs like the <a href="https://www.nytimes.com/2020/07/29/business/economy/unemployment-benefits-coronavirus.html">US$600 checks that the U.S. sent out</a> during part of the pandemic. </p>
<p>While these policies are intended to alleviate the economic pain of losing one’s job, we, as <a href="https://www.minerva.kgi.edu/people/robson-morgan-phd-assistant-professor-social-sciences/">happiness</a> <a href="https://statistiques.public.lu/en/actors/statec/organisation/red/OConnor/index.html">researchers</a>, are more interested in how they might affect people’s well-being during the pandemic. </p>
<p>Broadly speaking, do some types of labor policies result in more happiness than others? </p>
<h2>Measuring happiness</h2>
<p>The answer to this question relies on the <a href="https://ggsc.berkeley.edu/what_we_do/event/the_science_of_happiness">science of happiness</a>, a burgeoning new area of social science research.</p>
<p>Social scientists like us use statistical methods to analyze data collected in surveys that ask people to report their level of happiness based on how they feel their life is going. This allows us to better understand the causes and consequences of happiness. </p>
<p>Perhaps the most well-known results of all this work are the global happiness rankings that come out each year, through which people have learned <a href="https://worldhappiness.report/ed/2020/social-environments-for-world-happiness/">how wonderful life is in Scandinavia</a>. Indeed more and <a href="https://www.happinesscouncil.org">more countries and organizations</a> are <a href="https://issuu.com/behavioralsciencepolicyassociation/docs/policy_insights_from_the_new_science_of_well-being">measuring happiness</a> and tweaking policies as a result.</p>
<p>While economic indicators such as unemployment and gross domestic product paint a <a href="https://news.uchicago.edu/story/happiness-among-americans-dips-five-decade-low">bleak picture of life</a> right now, the loss in happiness is likely even larger than implied by growth and jobs data because these indicators fail to capture psychological costs. Even those who are not sick or unemployed <a href="https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2771502">face significant distress</a> as a result of pandemic-related fears or social isolation. </p>
<p><a href="https://doi.org/10.1162/003465303772815745">Research shows</a> <a href="https://doi.org/10.7758/RSF.2017.3.3.04">these factors</a> <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/roiw.12369">are detrimental</a> for <a href="https://doi.org/10.1142/9789814417358_0006">feelings of well-being</a>. </p>
<p>While worrying about happiness may seem trivial when <a href="https://www.nytimes.com/interactive/2020/world/coronavirus-maps.html">so many people have died</a>, deteriorating well-being can create a <a href="https://ssrn.com/abstract=2306651">vicious cycle</a>. Fear, despair, depression and isolation trigger worse <a href="https://doi.org/10.1016/j.jebo.2019.10.018">health</a>, <a href="https://doi.org/10.1016/j.jebo.2003.09.002">economic</a> and <a href="https://doi.org/10.1111/roiw.12388">social</a> <a href="https://doi.org/10.1016/j.jebo.2019.03.024">outomes</a>, which in turn reinforce the negative feelings.</p>
<p>Such a cycle prolongs recovery and may ultimately lead to spiking suicide rates and deaths of despair. </p>
<p>So at a time of heightened stress and forced social isolation, finding ways to help people stay positive and healthy is extremely important. And based on <a href="https://statistiques.public.lu/catalogue-publications/economie-statistiques/2020/114-2020.pdf">our research</a>, we believe one way to do this is with the right labor market policy. </p>
<h2>Labor market bliss</h2>
<p>Relevant labor market policies can be loosely divided into three types. </p>
<p>The first provides support for people who become unemployed in the form of income replacement or training programs. An example of this is <a href="https://www.oecd.org/employment/emp/employmentdatabase-labourmarketpoliciesandinstitutions.htm">unemployment insurance</a>, which provides benefits to qualified workers when they lose their jobs. </p>
<p>The second type <a href="https://www.oecd-ilibrary.org//sites/1686c758-en/1/3/3/index.html?itemId=/content/publication/1686c758-en&_csp_=fc80786ea6a3a7b4628d3f05b1e2e5d7&itemIGO=oecd&itemContentType=book#">restricts the firing of employees</a>, a policy common in Europe that guarantees job security to some extent. Both of these policies are intended to buffer workers from individual shocks and deteriorating labor market conditions in a recession. </p>
<p>The third includes temporary measures enacted during <a href="https://www.oecd-ilibrary.org/sites/1686c758-en/1/3/1/index.html?itemId=/content/publication/1686c758-en&_csp_=fc80786ea6a3a7b4628d3f05b1e2e5d7&itemIGO=oecd&itemContentType=book">extraordinary times</a> such as furloughing employees: that is, keeping them in their jobs at reduced pay with assistance by governments. The <a href="https://www.theguardian.com/money/2020/may/12/how-the-uk-furlough-scheme-compares-with-other-countries">U.K. notably put this policy in place</a> early in the pandemic with the idea that it would allow economies to quickly recover from COVID-19 by essentially freezing the economy in place, after which people can quickly return to their jobs.</p>
<p>To get a better sense of how these labor market policies affect well-being, <a href="https://statistiques.public.lu/catalogue-publications/economie-statistiques/2020/114-2020.pdf">we studied</a> how happiness changed in 23 European countries in the aftermath of the Great Recession that resulted from the 2008-2009 financial crisis. </p>
<p>We found that countries that had more generous income replacement policies experienced smaller losses in happiness on average. Denmark and Ireland, for example, which experienced some of the smallest declines, both had generous income replacement and training programs for the unemployed. </p>
<p><iframe id="cLddL" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/cLddL/2/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<p>Greece, Italy and several other Mediterranean countries, on the other hand, which suffered some of the largest drops in happiness in the period, offered relatively little income support for the unemployed and had strict employment protection legislation.</p>
<p>Perhaps most surprising is that policies that explicitly protected employees – such as restrictions on layoffs – did not appear to do a very good job keeping people happy. For example, Greece and Italy relied on these types of policies to protect their workers yet nonetheless experienced high losses in happiness. </p>
<p>We believe the reason is that <a href="https://doi.org/10.1162/0033553042476215">these policies</a> make it harder to fire employees. That <a href="https://www.jstor.org/stable/4132669?seq=1">discourages hiring</a> in a recession because employers know they won’t be able to easily let go of the person if conditions deteriorate. So companies defer hiring, which makes it harder for people looking for a job to find one, and increases worries about becoming unemployed. Indeed, <a href="https://doi.org/10.1016/j.red.2012.02.001">previous research</a> indicates that high unemployment during recessions is due more to reductions in hiring than initial dismissals. </p>
<p>[<em><a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=experts">Expertise in your inbox. Sign up for The Conversation’s newsletter and get expert takes on today’s news, every day.</a></em>]</p>
<h2>Supporting well-being</h2>
<p>So what does this tell us about the current situation? </p>
<p>Our research suggests restarting policies like the US$600 supplement the U.S. government offered the unemployed until the funding lapsed at the end of July is the optimal approach to supporting citizens’ well-being. Offering job training programs to help people find new jobs is another good strategy. </p>
<p>Policies that lock people into jobs, like the furlough approach taken in the U.K., may do more harm than good as they can limit the ability of companies to do the hiring necessary to make adjustments during this unprecedented situation. </p>
<p>This will increase worries about becoming unemployed, hurt people who become unemployed and potentially slow an economic recovery by limiting the ability of the labor market to adapt to a post-pandemic world.</p><img src="https://counter.theconversation.com/content/147382/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Kelsey O'Connor's organization received funding from the National Research Fund of Luxembourg for a project Kelsey O'Connor works on. He sits on the Board of Directors for the International Society for Quality-of-Life Studies and the Advisory Panel of the What Works Centre for Wellbeing. </span></em></p><p class="fine-print"><em><span>Robson Hiroshi Hatsukami Morgan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Governments use a variety of labor market policies to support workers who lose their jobs – each with a different impact on a country’s well-being.Robson Hiroshi Hatsukami Morgan, Assistant Professor of Social Sciences, Minerva UniversityKelsey O'Connor, Researcher, National Institute for Statistics and Economic StudiesLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1434062020-08-03T11:59:22Z2020-08-03T11:59:22ZInternational trade has cost Americans millions of jobs. Investing in communities might offset those losses<figure><img src="https://images.theconversation.com/files/349410/original/file-20200724-33-65dkij.jpg?ixlib=rb-1.1.0&rect=35%2C47%2C3895%2C4868&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Some economists support policies that invest in communities and towns as the best way to offset job losses.</span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/u8NQockJPwg">Photo by Andrea Leopardi for Unsplash</a></span></figcaption></figure><p>Arguing against globalization is like arguing against the laws of gravity, <a href="https://www.un.org/press/en/2002/sgsm8262.doc.htm#:%7E:text=It%20has%20been%20said%20that,allows%20only%20heavyweights%20to%20survive.">said</a> former United Nations Secretary General Kofi Annan. <a href="https://searchcio.techtarget.com/definition/globalization">Globalization</a>, the international trade in goods and services with minimal barriers between countries, may seem inevitable as the world’s economies become more <a href="https://www.globalpolicy.org/component/content/article/162/27684.html">interdependent</a>. </p>
<p>Properly regulated, globalization can be a powerful force for social good. For wealthy nations, globalization can mean less expensive goods, additional spending and a <a href="https://velocityglobal.com/blog/globalization-benefits-and-challenges/">higher standard of living</a>. For those who live and work in poorer nations, globalization can lead to greater prosperity with the <a href="https://www.cato.org/publications/commentary/book-review-defense-globalization">power to</a> reduce child labor, increase literacy and enhance the economic and social standing of women. </p>
<p>But <a href="https://rbj.net/2016/08/12/misconceptions-about-free-trade-and-globalization/">not everyone</a> gains from globalization. An analysis of 120 countries between 1988 and 2008 and published by the <a href="https://www.theglobalist.com/the-real-winners-and-losers-of-globalization/">World Bank</a> illustrates who <a href="http://documents1.worldbank.org/curated/en/914431468162277879/pdf/WPS6719.pdf">has lost</a>. The U.S. trade deficit with China, for instance, has had an adverse effect on American workers, effectively <a href="https://www.epi.org/blog/china-trade-deal-will-not-restore-3-7-million-u-s-jobs-lost-since-china-entered-the-wto-in-2001/#:%7E:text=Scott-,China%20trade%20deal%20will%20not%20restore%203.7%20million%20U.S.%20jobs,entered%20the%20WTO%20in%202001&text=It%20is%20unlikely%20to%20significantly,trade%20deficits%20in%20manufactured%20goods.">eliminating 3.7 million jobs</a> between 2001 and 2018. More than 75% of those job losses were in manufacturing, accounting for more than half of all U.S. manufacturing jobs lost or displaced during this period.</p>
<p>If globalization is inevitable, then what are the best strategies to help American workers get back into the workforce when their jobs have been eliminated? </p>
<h2>Job loss and the working class</h2>
<p>The economist Branko Milanovic, using <a href="http://documents1.worldbank.org/curated/en/914431468162277879/pdf/WPS6719.pdf">data from the World Bank</a>, <a href="https://www.hup.harvard.edu/catalog.php?isbn=9780674984035">argues</a> that the losers from globalization are working people in rich nations. Milanovic’s <a href="https://www.hup.harvard.edu/catalog.php?isbn=9780674984035">research</a> demonstrates that a large portion of the lower middle class in the U.S. and Western Europe have seen little to no gain in income since 1988. At the same time, 200 million Chinese, 90 million Indians and nearly 30 million people in Indonesia, Brazil, Egypt and Mexico have <a href="https://www.theglobalist.com/the-real-winners-and-losers-of-globalization/">profited from globalization</a>. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/349757/original/file-20200727-15-1jl7ze5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Since 1991, China has made tremendous gains in manufacturing exports.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/5bekMv8dsiM">Photo by Owen Winkel for Unsplash</a></span>
</figcaption>
</figure>
<p>Many American workers have been <a href="https://doi.org/10.1257/aer.103.6.2121">negatively impacted</a> by liberalized trade with China, the so-called “<a href="https://doi.org/10.1146/annurev-economics-080315-015041">China trade shock</a>,” because goods that China exports to the U.S. have substituted for comparable American-made products. From an economic perspective, China successfully increased its share of world manufacturing exports from a little more than 2% in 1991 to 28% in <a href="https://www.statista.com/chart/20858/top-10-countries-by-share-of-global-manufacturing-output/#:%7E:text=According%20to%20data%20published%20by,China%20overtook%20it%20in%202010.">2018</a>. By contrast, in 2001, <a href="https://www.epi.org/publication/china-trade-outsourcing-and-jobs/">U.S. trade</a> began to increase with China when the latter joined the <a href="https://www.wto.org/">World Trade Organization</a>, the international organization that determines the global rules of trade. Even though U.S. exports to China have increased over time, since the U.S. buys more from China than we sell to them, a <a href="https://www.thebalance.com/u-s-china-trade-deficit-causes-effects-and-solutions-3306277">large trade deficit</a> has opened up. The growth of this deficit means that the U.S. is losing jobs in manufacturing and foregoing opportunities to add jobs in this sector because imports from China have skyrocketed, while exports have not increased as much.</p>
<p>The trade deficit has had <a href="https://www.epi.org/publication/growth-in-u-s-china-trade-deficit-between-2001-and-2015-cost-3-4-million-jobs-heres-how-to-rebalance-trade-and-rebuild-american-manufacturing/#:%7E:text=From%202001%20to%202015%2C%20imports,to%20%24116.1%20billion%20in%202015.">different impacts</a> on regions within the U.S. Some regions are devastated by layoffs and factory closings, while others are surviving but not growing the way they might if new factories were opening and existing plants were hiring more workers. This slowdown in manufacturing job generation is also contributing to stagnating wages and incomes of typical workers and widening economic inequality.</p>
<h2>Retraining and moving for work</h2>
<p>What are the solutions for <a href="https://www.epi.org/publication/manufacturing-job-loss-trade-not-productivity-is-the-culprit/">the millions of American workers</a> who have lost their jobs? Economists generally <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2358751">support</a> “people-based” over “place-based” policies and investments. The rationale is that it’s more important to invest in workers rather than bolster a place where workers live. Economists would argue that directing public funds into regions doing poorly is akin to <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">wasting money</a>. The logical outcome of such policies is that towns that have lost their economic base are allowed to shrink while other economies take <a href="https://www.harvardmagazine.com/2000/11/places-people-policies.html">their place</a>. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/349760/original/file-20200727-15-16slfoz.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Without an economic engine, towns can wither and die.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/HPkYgjuSI4A">Photo by Cam Bradford by Unsplash</a></span>
</figcaption>
</figure>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p>
<p>The Department of Labor’s <a href="https://www.dol.gov/agencies/eta/tradeact">Trade Adjustment Assistance for Workers</a> program helps workers displaced by international trade with job training and relocation assistance, subsidized health insurance and extended unemployment benefits. Trade Adjustment Assistance is a “people-based” policy because it invests in workers. I <a href="https://theconversation.com/a-selective-retreat-from-trade-with-china-makes-sense-for-the-united-states-141110">believe that</a>, relative to the magnitude of the job losses, Trade Adjustment Assistance provides too little relief. While there is little support among economists for <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">place-based policies</a>, recent evidence demonstrates that such policies may deserve another look.</p>
<p><a href="https://www.frbsf.org/economic-research/files/el2015-07.pdf">Examples of place-based policies</a> include enterprise zones where economic incentives are offered to firms to create jobs in economically challenged areas and policies that seek to promote economic development by investing in infrastructure, such as the <a href="https://econofact.org/do-place-based-policies-work">Tennessee Valley Authority</a>, which, since 1933, provided electrification to the rural South, promoting industrialization and enhancing the quality of life in that region.</p>
<h2>Adapting to joblessness</h2>
<p>People-based policies are predicated on the assumption that if given the right incentives, people will leave economically strapped areas and move to flourishing regions. Yet <a href="http://economics.mit.edu/files/7723">research</a> shows that even in regions of the U.S. where deep manufacturing job losses have occurred, workers frequently did not move to new jobs. Those who lost their jobs adjusted, spent less money and stayed put, resulting in a further <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">reduction of economic activity</a> in regions that, in turn, became poorer.</p>
<p>Workers who can move to more promising locales, but choose not to, is a phenomenon not only in the U.S. but in <a href="https://www.iza.org/publications/dp/6685/the-rise-of-the-east-and-the-far-east-german-labor-markets-and-trade-integration">Germany</a>, <a href="http://ftp.iza.org/dp8324.pdf">Norway</a> and <a href="https://DOI.org/10.1080/00343404.2013.879982">Spain</a>, even if economically depressed regions have a negative impact on those who <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">live there</a>. Men – particularly young, white men – in the U.S. are less likely to graduate from college, more likely to bear children out of wedlock and more likely to suffer from what the economists Anne Case and Angus Deaton have called “<a href="https://press.princeton.edu/books/hardcover/9780691190785/deaths-of-despair-and-the-future-of-capitalism">deaths of despair</a>.” These deaths arise because of a deep <a href="https://www.newyorker.com/magazine/2020/03/23/why-americans-are-dying-from-despair">sense of hopelessness</a> stemming from unemployment, lack of resources and alcohol and drug dependency. </p>
<h2>Strengthening a place called home</h2>
<p>If relatively low-skilled workers <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">are unwilling to move</a>, then should policies that favor people-based programs continue? Or is it better to make place-based investments, as the 2019 Nobel laureates <a href="https://www.publicaffairsbooks.com/titles/abhijit-v-banerjee/good-economics-for-hard-times/9781541762879/">Abhijit Banerjee and Esther Duflo suggest</a>?</p>
<p>I believe that the U.S. should back policies that support people where they live and invest in those places when global trade, specifically liberalized trade, has taken a <a href="https://www.epi.org/publication/infographic-free-trade-agreements-have-hurt-american-workers/">toll on American workers</a>. Regional policymaking might ask what is needed so that those who are unemployed do not feel, as Nobel Prize-winning poet Gabriela Mistral writes, that “everyone left and we have remained on a path that goes on without us.”</p><img src="https://counter.theconversation.com/content/143406/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Amitrajeet A. Batabyal does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>When manufacturing jobs disappear, what are the best ways to help unemployed workers?Amitrajeet A. Batabyal, Arthur J. Gosnell Professor of Economics, Rochester Institute of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1305192020-04-20T12:26:27Z2020-04-20T12:26:27ZReplacing workers has many costs<figure><img src="https://images.theconversation.com/files/315558/original/file-20200214-10980-1mb1zta.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Replacing an employee means taking time and resources to train someone new.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/human-resource-manager-explaining-work-dynamics-766701082">djrandco/Shutterstock.com</a></span></figcaption></figure><p>The labor market is changing rapidly with the onset of the coronavirus pandemic. </p>
<p>Many organizations are <a href="https://www.dailycamera.com/2020/04/14/boulder-furloughing-737-city-employees-beginning-april-20/">laying off</a> <a href="https://www.ibtimes.com/coronavirus-layoffs-trump-organization-cuts-1500-employees-pandemic-hurts-presidents-2952985">almost all</a> <a href="https://news.yahoo.com/daily-crunch-amazon-fires-two-173214935.html">of their workers</a>, while others are considering which workers to lay off, <a href="https://www.thedailybeast.com/covid-19-testing-firm-quest-diagnostics-is-furloughing-employees">which to</a> <a href="https://abcnews.go.com/Entertainment/wireStory/disney-world-furloughing-43000-workers-due-virus-70103647">furlough</a> and which to keep. Alternatively, some are <a href="https://news.yahoo.com/former-cdc-director-says-coronavirus-140000179.html">expanding their labor forces</a>.</p>
<p>When <a href="https://abcnews.go.com/Health/wireStory/nyc-mayor-urges-caution-reopening-virus-stalled-economy-70161298">the economy starts to open up</a> again, employers will need to consider rehiring or replacing workers, or hiring workers with a different mix of skills. The cost of replacing an employee is high for employers, and being out of work is harmful for workers, who may be replaced with artificial intelligence or contractors and risk losing their skills.</p>
<p>I’m an <a href="https://www1.villanova.edu/villanova/business/facultyresearch/facultydepartment/biodetail.html?mail=cheryl.carleton@villanova.edu">expert in labor economics</a>, and my work <a href="https://www.researchgate.net/profile/Mary_Kelly18">with a colleague</a> investigates the increase in people engaging in alternative work arrangements such as contract or gig work, along with the implications such jobs have <a href="https://doi.org/10.1007/s11293-019-09628-3">for all workers’ well-being</a>.</p>
<p>There is no denying that the U.S. was experiencing <a href="https://www.whitehouse.gov/articles/job-market-continues-crush-expectations-2020/">a tight labor market</a> and a low rate of unemployment before the coronavirus pandemic took hold. For some fields, particularly health care and services deemed essential by local governments, the labor market continues to be tight.</p>
<p>A sudden massive loss of demand for their goods and services is forcing companies to make quick decisions, and some employers may underestimate the cost to replace good employees. Knowing these costs may encourage them to keep more of their workers on the payroll.</p>
<h2>Where are the costs?</h2>
<p>There are costs involved in losing a worker and replacing them, such as completing paperwork when they leave, advertising the open position, reviewing resumes, interviewing candidates and training the new worker.</p>
<p>Once a new worker is hired, others must also spend time training them, and it will take some time for the new worker to achieve the same level of productivity as the worker who left.</p>
<p>Another cost is the loss in <a href="https://www.investopedia.com/terms/s/socialcapital.asp">social capital</a>. Social capital is the relationships between individuals at work that take time to build and add to the productivity of the firm.</p>
<p>The Society for Human Resource Management <a href="https://www.shrm.org/hr-today/news/all-things-work/pages/to-have-and-to-hold.aspx">found that departures cost about one-third of a worker’s annual earnings</a>. </p>
<p><a href="https://wwww.americanprogress.org/issues/economy/reports/2012/11/16/44464/there-are-significant-business-costs-to-replacing-employees/">The Center for American Progress</a> drilled in deeper. They found the costs of replacing workers who earn less than US$30,000 per year to be 16% of annual salary, or $3,200 for an individual earning $20,000 per year.</p>
<p>For those earning $30,000 to $50,000 per year, it is estimated to cost about 20% of annual salary, or $8,000 for an individual earning $40,000. For highly educated executive positions, replacement costs are estimated to be 213% of annual salary – $213,000 for a CEO earning $100,000 per year.</p>
<p><a href="https://www.americanprogress.org/wp-content/uploads/2012/11/CostofTurnover.pdf">The much higher cost for replacing CEOs</a> is partly due to the fact that they require higher levels of education, greater training, and firms may lose clients and institutional knowledge with such turnovers.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/327014/original/file-20200409-187559-bjch1k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/327014/original/file-20200409-187559-bjch1k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/327014/original/file-20200409-187559-bjch1k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/327014/original/file-20200409-187559-bjch1k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/327014/original/file-20200409-187559-bjch1k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/327014/original/file-20200409-187559-bjch1k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/327014/original/file-20200409-187559-bjch1k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">By mid-April, more than 10% of employees in the U.S. had lost their jobs.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Virus-Outbreak-Unemployment/8f21d0b7f1714cf4a4e714db4496eac7/5/0">AP Photo/Rick Bowmer</a></span>
</figcaption>
</figure>
<h2>Employee alternatives</h2>
<p>This high cost of losing and replacing workers has important implications for organizations, consumers and workers, especially now with <a href="https://www.brookings.edu/blog/up-front/2020/04/15/the-unemployment-impacts-of-covid-19-lessons-from-the-great-recession/">an estimated 15 million unemployed</a>.</p>
<p>For those workers where the costs to replace them are high, firms will try to accommodate them. Strategies may include maintaining pay, increasing benefits and retraining. These actions are also costly, so firms will <a href="https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/alter-benefits-attract-retain.aspx">weigh them against the cost</a> of simply <a href="https://www.inproma.com/blog/2018/11/01/what-is-the-real-cost-of-hiring-a-new-employee-vs-retaining-current-staff/">hiring new workers</a>.</p>
<p>This means businesses face high costs to replace workers in the future, and high costs to retain current workers, leading to higher costs for consumers who buy the firms’ goods and services.</p>
<p>While the above consequences might sound great for workers that organizations choose to keep, these are not the only ways in which firms can respond.</p>
<p>The high cost of replacing workers, along with the increased uncertainty about the economy may cause businesses to use <a href="https://www.mckinsey.com/featured-insights/future-of-work/jobs-lost-jobs-gained-what-the-future-of-work-will-mean-for-jobs-skills-and-wages">more automation and robots</a>. Though such switches may entail a significant upfront cost, once they are made the firms then have more control over their production processes. </p>
<p>Another alternative for firms is to hire fewer permanent employees and turn instead <a href="https://www.nber.org/papers/w22667">to contract workers</a>. With contract workers, employers are not responsible for benefits, and they can more simply increase or decrease the number of workers as needed.</p>
<p>While this may increase employment for some workers, it will decrease it for others and it has serious implications for the availability of health and pension benefits as well as unemployment benefits, as the current crisis has revealed. </p>
<p>Businesses might also consider limiting the scope of what some workers do to limit the cost of replacing them. If the scope of a worker’s job is limited, then fewer areas will be impacted by the individual leaving, and the costs to train a replacement will be lower. For workers, however, it means fewer opportunities to gain experience.</p>
<p>For example, instead of training workers on several or all parts of the production process, the business may limit them to one specific aspect. It will then be less costly for the firm to replace them and the worker will have less experience to add to their resume. This also means less bargaining power for employees.</p>
<h2>Some win, but others lose</h2>
<p>The high cost of losing and then hiring new workers along with increased restrictions on hiring nonresidents might mean higher wages and increased benefits for some workers.</p>
<p>However, the high degree of uncertainty in the current labor market, along with the potential increase in <a href="https://www.cnbc.com/2020/02/04/gig-economy-grows-15percent-over-past-decade-adp-report.html">contract workers</a> and <a href="https://www.reuters.com/article/us-usa-results-automation/u-s-companies-facing-worker-shortage-race-to-automate-idUSKBN1X11T9">automation</a> means that some workers will not realize these potential gains, and all of us as consumers will most likely end up paying higher prices for the goods and services we buy.</p>
<p>[<em>Get the best of The Conversation, every weekend.</em> <a href="https://theconversation.com/us/newsletters/weekly-highlights-61?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=weeklybest">Sign up for our weekly newsletter</a>.]</p><img src="https://counter.theconversation.com/content/130519/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cheryl Carleton does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>As more and more Americans are laid off, employers have to consider the cost of letting their staff go.Cheryl Carleton, Assistant Professor of Economics, Villanova UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1347652020-03-31T12:19:01Z2020-03-31T12:19:01ZCOVID-19 could shrink the earnings of 2020 graduates for years to come<figure><img src="https://images.theconversation.com/files/323694/original/file-20200327-146683-192xywh.jpg?ixlib=rb-1.1.0&rect=346%2C500%2C3931%2C2218&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Jobs could be hard to keep or find for quite a while.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/graduates-during-commencement-ceremony-royalty-free-image/532462384?adppopup=true">Chuck Savage/Getty Images</a></span></figcaption></figure><p>Before the coronavirus pandemic forced <a href="https://www.usatoday.com/story/money/2020/03/18/coronavirus-what-stores-are-open-and-who-is-closed/2865166001/">businesses</a> and <a href="https://www.nytimes.com/2020/03/10/us/coronavirus-closings.html">schools</a> to close, high school and college graduates from the Class of 2020 could have expected to graduate into the <a href="https://www.nytimes.com/2020/02/07/business/january-jobs-report.html">strongest job market</a> in 50 years.</p>
<p>Now, due to massive <a href="https://www.imf.org/en/News/Podcasts/All-Podcasts/2020/03/20/martin-muhleisen-coronavirus">economic fallout</a>, the Class of 2020 is at risk of <a href="https://www.nbcnews.com/business/markets/we-may-well-be-recession-says-fed-chairman-jerome-powell-n1169291">graduating into a recession</a>.</p>
<p>This souring economy has important implications for more than 3.5 million students expected to <a href="https://nces.ed.gov/pubsearch/pubsinfo.asp?pubid=2019001">graduate from high school</a> in 2020, and the more than 1.3 million students expected to graduate from a two-year or four-year <a href="https://nces.ed.gov/ipeds/Search?query=&query2=&resultType=all&page=1&sortBy=date_desc&overlayTableId=25416">college</a>.</p>
<p>The <a href="https://www.hopkinsmedicine.org/health/conditions-and-diseases/coronavirus/coronavirus-social-distancing-and-self-quarantine">social distancing</a> <a href="https://www.aljazeera.com/news/2020/03/emergencies-closures-states-handling-coronavirus-200317213356419.html">that has upended business as usual</a> is causing a wave of <a href="https://www.businessinsider.com/coronavirus-layoffs-furloughs-hospitality-service-travel-unemployment-2020#scandinavian-airlines-sas-announced-that-it-would-temporarily-lay-off-10000-employees-90-of-its-staff-on-march-15-sas-also-halted-the-majority-of-its-flights-and-is-operating-with-limited-service-1">layoffs and furloughs</a>, with an unprecedented <a href="https://www.businessinsider.com/us-weekly-jobless-claims-record-coronavirus-unemployment-insurance-labor-recession-2020-3">3.3 million</a> new unemployment claims filed in the week ending March 21.</p>
<p>And that’s just the beginning. Experts predict the unemployment rate will eventually rise from 3.5% in February to <a href="https://www.bloomberg.com/news/articles/2020-03-22/fed-s-bullard-says-u-s-jobless-rate-may-soar-to-30-in-2q">as much as 30%</a> by June.</p>
<p>We are <a href="http://volweb2.utk.edu/%7Elkessle2/">economists</a> who study the link between <a href="https://volweb.utk.edu/%7Eccarrut1/">education</a> and <a href="https://web.utk.edu/%7Emwanamak/">employment</a>. Should a recession occur, we believe young workers and new grads may be hit hard. History and research also show that the looming economic downturn could have distinct consequences for the Class of 2020 that outlast the economic downturn itself.</p>
<h2>Bigger toll for young workers</h2>
<p>Younger workers typically have more trouble finding and maintaining employment in a recession. For example, during the Great Recession, the unemployment rate for all workers <a href="https://www.bls.gov/opub/mlr/2010/01/cls1001.pdf">peaked at 10%</a> – about half of the <a href="https://www.bls.gov/opub/mlr/2010/01/cls1001.pdf">19.2% peak for workers between 16 and 24 years old</a>.</p>
<p>During a recession, people attempting to enter or re-enter the labor market will have a harder time finding employment and therefore have less access to employer-provided health insurance, potentially leaving both their physical and financial well-being at greater risk. <a href="https://www.census.gov/library/publications/2019/demo/p60-267.html">About 14% of Americans age 19-24 are uninsured</a>, much higher than the 8.5% nationwide rate of uninsurance. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/323699/original/file-20200327-146683-sncder.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/323699/original/file-20200327-146683-sncder.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/323699/original/file-20200327-146683-sncder.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/323699/original/file-20200327-146683-sncder.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/323699/original/file-20200327-146683-sncder.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/323699/original/file-20200327-146683-sncder.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/323699/original/file-20200327-146683-sncder.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/323699/original/file-20200327-146683-sncder.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Unemployment was nearly twice as high for young workers during the Great Recession.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/graduating-class-royalty-free-image/157180551?adppopup=true">Lawrence Sawyer</a></span>
</figcaption>
</figure>
<p>Second, younger Americans <a href="https://qwiexplorer.ces.census.gov/">disproportionately work</a> in the food, retail, leisure and hospitality industries. Those workplaces are all being <a href="https://www.marketwatch.com/story/these-industries-are-more-likely-to-shed-jobs-if-the-coronavirus-pandemic-worsens-but-one-sector-looks-recession-proof-2020-03-11">hit hard</a> as consumers follow government orders to stay home.</p>
<p>Finally, new graduates are not in the best position to benefit from the US<a href="https://www.cnn.com/2020/03/27/politics/coronavirus-stimulus-house-vote/index.html">$2 trillion federal coronavirus relief package</a> that, among other things, is designed to help employers keep or rehire workers. This relief will do more for people who were already working than new graduates seeking to enter the job market or find a better paying job.</p>
<h2>Effects could last several years</h2>
<p>The Class of 2020 could feel the effects of a recession well after the recession has ended. Prior research has found that U.S. college students who graduated during a recession <a href="https://doi.org/10.1086/682938">earned 10% less</a> the first year after they completed their studies than would otherwise be expected. And the negative effects lasted over the next seven years.</p>
<p>Why? Researchers attribute these losses to college graduates <a href="https://doi.org/10.1086/682938">taking jobs that pay less</a> right after they graduated.</p>
<p>Research on Canadian students suggests the effects <a href="https://www.aeaweb.org/articles?id=10.1257/app.4.1.1">may be long-lasting</a> – those who graduated in recession years had initial income 9% below students who graduated in better economic conditions, with the gap closing to zero over the next 10 years.</p>
<p>In the past, the negative effects of graduating in a recession did not affect everyone the same. Highly skilled graduates, those graduating from more selective colleges and universities or who majored in fields that usually lead to high salaries, tend to recover early hits to their earnings by changing jobs and employers once the economy rebounds. All else equal, it <a href="https://cew.georgetown.edu/cew-reports/whats-it-worth-the-economic-value-of-college-majors/">pays more</a> to major in engineering than theater. And these differences are magnified after recessions.</p>
<h2>What young workers can do</h2>
<p><strong>1. Stay healthy</strong></p>
<p>While the individual risks of COVID-19 may seem low for them, <a href="https://thehill.com/policy/healthcare/488325-cdc-data-show-coronavirus-poses-serious-risk-for-younger-people">young people can nevertheless get quite sick</a>, and they can transmit the virus throughout their communities – including to their more vulnerable friends, neighbors and relatives. It is worth stating the obvious that becoming ill with COVID-19 would make it much harder to work or to find work, and that becoming infectious could worsen the health and financial security of others.</p>
<p><strong>2. Pay attention to relief efforts</strong></p>
<p>Grads can actively seek out benefits for which they or their employers may be eligible. <a href="https://www.nbcnews.com/politics/congress/coronavirus-unemployment-benefits-here-s-who-qualifies-how-much-they-n1169846">Unemployment relief</a>, for example, may be available to students who have lost jobs, even if they were working part-time, and partial benefits may be available for those whose hours were reduced as a result of the virus. In addition to expanded <a href="https://www.finance.senate.gov/imo/media/doc/CARES%20Act%20Section-by-Section%20(Tax,%20Unemployment%20Insurance).pdf">unemployment insurance provisions</a>, federal relief efforts include <a href="https://taxfoundation.org/cares-act-senate-coronavirus-bill-economic-relief-plan/">payroll support for businesses</a>, direct <a href="https://www.nytimes.com/article/coronavirus-stimulus-package-questions-answers.html">cash support</a> to all individuals, temporary <a href="https://www.marketwatch.com/story/yes-you-still-have-to-pay-your-student-loans-but-you-may-be-able-to-suspend-them-or-lower-the-payment-2020-03-25">suspension of student loan payments</a>, and a pause on foreclosures and evictions for both <a href="https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Suspends-Foreclosures-and-Evictions-for-Enterprise-Backed-Mortgages.aspx">homeowners</a> and <a href="https://www.barrons.com/articles/fannie-mae-and-freddie-mac-released-coronavirus-relief-plans-heres-what-it-means-for-landlords-and-renters-51585081954">renters</a>. Diverse state, local, and private benefits are popping up as well, such as <a href="https://thehill.com/homenews/state-watch/488423-grocery-store-workers-in-minnesota-classified-as-emergency-workers">child care</a> for a broader definition of emergency workers, and <a href="https://www.wate.com/health/coronavirus/knox-county-schools-announces-meals-will-be-provided-to-any-child-18-under-during-school-closure/">meals for children</a> whose schools are closed.</p>
<p><strong>3. Consider staying in school</strong></p>
<p>Some graduates may be better off by staying in school to pursue another degree. They may have plenty of company: Enrollment <a href="https://doi.org/10.1016/j.jpubeco.2014.12.009">typically rises</a> during recessions. Staying in school will make graduating during a recession less likely and could help graduates land a higher-paying job later on. Continuing students should be cognizant of additional student debt, but also the potential <a href="https://muse.jhu.edu/article/508220">boost in earnings</a> from further education. Another consideration is that the implicit cost of being in school – the income given up because an individual is in school instead of working – is now lower than normal. </p>
<p>We close on a note of optimism. Despite dire short-run predictions for the labor market, economic improvement is <a href="https://www.politico.com/news/2020/03/26/jerome-powell-we-may-well-be-in-a-recession-150036">expected throughout the second half of 2020 and into 2021</a>. Although we have yet to see the full extent of layoffs and overall economic slowdown induced by COVID-19, <a href="https://www.politico.com/news/2020/03/26/jerome-powell-we-may-well-be-in-a-recession-150036">analysts</a> currently expect that the U.S. will get back to work once the virus is under control.</p>
<p>[<em>Get facts about coronavirus and the latest research.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=upper-coronavirus-facts">Sign up for our newsletter.</a>]</p><img src="https://counter.theconversation.com/content/134765/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The economic fallout from COVID-19 will likely harm new workers in distinct ways with long-term effects, three economists say.Celeste K. Carruthers, Associate Professor of Economics, University of TennesseeLarry Kessler, Research Associate Professor - Economics, University of TennesseeMarianne Wanamaker, Associate Professor of Economics, University of TennesseeLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1320682020-02-24T13:48:27Z2020-02-24T13:48:27ZCollege men more likely to seek grade changes than college women<figure><img src="https://images.theconversation.com/files/316650/original/file-20200221-92526-1rgd7ob.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">If you don't ask for a higher grade you won't get one.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/university-students-checking-bulletin-board-for-royalty-free-image/121527617?adppopup=true">ONOKY-Eric Audras/Getty Images</a></span></figcaption></figure><p>“<em>Professor, my final grade in your class is a C. Is there anything I can do to get a B-minus?</em>”</p>
<p>In my job as a college professor, I typically got one or two such requests from male students at the end of each semester. However, only one female student ever asked me for such a favor in six years.</p>
<p>As an economist who studies <a href="https://scholar.google.com/citations?user=6gseVboAAAAJ&hl=en">labor issues related to women</a>, it made me wonder: Do male students ask for grade changes more frequently than female students? Are there gender differences in grade changes in college? If so, what are the reasons behind these differences?</p>
<p>Grades signal how productive an employee is likely to be. And many employers <a href="https://money.usnews.com/money/blogs/outside-voices-careers/articles/2016-04-26/does-gpa-matter-when-applying-for-a-job">require transcripts</a> for entry-level jobs. If male students get grade increases more frequently than female students, it could put equally qualifying women at a disadvantage when they compete for the same position because a higher GPA has been shown to <a href="https://www.aeaweb.org/articles?from=f&id=10.1257%2Faer.20181714">improve a job candidate’s chance of getting an interview</a>.</p>
<p>Using data from a large four-year public university with over 1.3 million grade records between 2010 and 2016, my co-author, economist <a href="https://sites.google.com/site/basitakzafar/">Basit Zafar</a> and I <a href="https://www.nber.org/papers/w26703">discovered</a> that men are 18.6% more likely than women to have their grades changed to a better grade. This gender gap remains even when you take the characteristics of students or different instructors and classes into account.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/316670/original/file-20200221-92533-p5g4x1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/316670/original/file-20200221-92533-p5g4x1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/316670/original/file-20200221-92533-p5g4x1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/316670/original/file-20200221-92533-p5g4x1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/316670/original/file-20200221-92533-p5g4x1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/316670/original/file-20200221-92533-p5g4x1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/316670/original/file-20200221-92533-p5g4x1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Women are less likely to ask for a final grade change, new research has found.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/teacher-giving-test-results-to-students-at-computer-royalty-free-image/487457292?adppopup=true">skynesher/Getty Images</a></span>
</figcaption>
</figure>
<h2>Searching for the source</h2>
<p>Although changes to final grades are rare (fewer than 0.5% of all grade records in the dataset we analyzed), in the student survey we conducted for this study, 40% of students told us that they had ever asked their instructors for a better grade.</p>
<p>The data don’t really show why men are more likely to get their grades changed than women. But there are at least three possible scenarios: 1) Male students simply ask for grade changes more often than female students; 2) instructors are more likely to grant the requests to male students than female students; or 3) female students ask to change their grades during the semester, which lowers their need to do so at the end of the semester.</p>
<p>To figure out which scenario most likely explains the gender gap in grade changes, my co-author and I surveyed instructors and students. The surveys support the first scenario and show that men indeed asked for grade changes more often than women. In other words, gender differences in the way students behave, rather than discrimination by their professors, seems to explain this disparity. And even if instructors treat all of these requests equally, men are still more likely than women to get their grades bumped up simply because they ask more.</p>
<p>We did not find evidence to support the other two scenarios – that instructors are more likely to change grades for male students, or that female students ask for grade changes during the semester. We found that both male and female students hold similar beliefs about their chances of getting their grade changed to a better grade if they ask. And once they ask, men and women are likely to get their requests granted at the same rate.</p>
<p>Furthermore, men are more likely than women to ask not only at the end of the semester but also during the semester.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/316668/original/file-20200221-92518-v678gr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/316668/original/file-20200221-92518-v678gr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/316668/original/file-20200221-92518-v678gr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/316668/original/file-20200221-92518-v678gr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/316668/original/file-20200221-92518-v678gr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/316668/original/file-20200221-92518-v678gr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/316668/original/file-20200221-92518-v678gr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/316668/original/file-20200221-92518-v678gr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Professors tend to treat requests from men and women to change grades the same.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/happy-male-professor-giving-his-students-test-royalty-free-image/1091216916?adppopup=true">skynesher/Getty Images</a></span>
</figcaption>
</figure>
<h2>Costs and risks</h2>
<p>To corroborate the results from the surveys, we conducted a laboratory experiment to test the gender differences in asking for grade changes.</p>
<p>More than 500 participants completed a quiz, and the payoff (from zero dollars to $16) was tied to the grade they received – the higher their score, the higher their payment. We picked three out of 20 questions to randomly grade the three questions.</p>
<p>In other words, even if they got the right answer, through random grading, their correct answers may or may not be scored accurately. Therefore, the initial grade could be the participant’s true grade, but it could also be higher or lower than their true grade.</p>
<p>Participants were fully informed of the uncertainty in the grades, and they were given ten different cost scenarios. The cost scenarios ranged from paying $3.50 to getting paid $1, and the participants had to decide whether they were willing to pay the cost to get their quizzes regraded. If they paid the cost, the true grade was revealed and their payment was adjusted. If they chose not to pay the cost, the initial grade became final and they were paid accordingly.</p>
<p>We found that given a positive cost, nearly half of male participants versus slightly over a third of female participants were willing to pay the cost to get a regrade. However, when it didn’t cost anything or when the participants were paid to ask for a grade change, there was no discernible gender difference in asking.</p>
<h2>Asking is harder for women</h2>
<p>Why are women less willing to pay the cost for regrades? Through questioning the survey participants about how confident or uncertain they were in their answers, we found that women tend to be less confident about their answers and more uncertain about their performance in the quiz.</p>
<p>Nearly half of the gender difference in the willingness to pay for a regrade can be explained by the gender differences in the confidence level, uncertainty about the potential outcomes, and participants’ <a href="https://psycnet.apa.org/record/2007-02371-015">personality traits</a>. However, the remaining half of the gender gap remained unexplained.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/316669/original/file-20200221-92558-exmzu5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/316669/original/file-20200221-92558-exmzu5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/316669/original/file-20200221-92558-exmzu5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/316669/original/file-20200221-92558-exmzu5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/316669/original/file-20200221-92558-exmzu5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/316669/original/file-20200221-92558-exmzu5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/316669/original/file-20200221-92558-exmzu5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">College women experience more stress than men when asking for grade changes.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/stressed-before-an-exam-royalty-free-image/587197896?adppopup=true">Fat Camera/Getty Image</a></span>
</figcaption>
</figure>
<p>In the survey, female students also reported a relatively high stress level when they ask for a regrade.</p>
<h2>Feedback helps</h2>
<p>In our study, we found that men and women do differ in their tendency to ask, even when they are still in school. Therefore, we believe that making an explicit and transparent grading – and regrading – policy for students to follow would lower the cost of asking given that women told us they are more stressed and have a lower willingness to pay to ask.</p>
<p>Because women are less confident and more uncertain about their performance, we also believe that sending a strong signal about student performance in the class would reduce the uncertainty and hence narrow the gender gap in grade changes. </p>
<p>Being aware of the gender difference in asking for grade changes – and establishing a clear policy for grade change requests – could help reduce female disadvantage. This, we believe, could potentially help level the playing field when it comes time to apply for a job.</p>
<p>[<em>You’re smart and curious about the world. So are The Conversation’s authors and editors.</em> <a href="https://theconversation.com/us/newsletters/weekly-highlights-61?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=weeklysmart">You can get our highlights each weekend</a>.]</p><img src="https://counter.theconversation.com/content/132068/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Cher Li does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>An economics professor investigates why college men are more likely to push back when they don’t get the grades they want.Cher Li, Assistant Professor of Economics, Colorado State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1289822020-01-07T13:12:51Z2020-01-07T13:12:51ZUnemployment pushes more men to take on female-dominated jobs<figure><img src="https://images.theconversation.com/files/307803/original/file-20191218-11951-1olndgb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Men make more money in women-dominated fields, such as teaching.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/teacher-pupil-raised-hands-front-school-388667923">Monkey Business Images/Shutterstock.com</a></span></figcaption></figure><p>In the last few decades, many high-paying jobs that are mostly done by men – like manufacturing – have <a href="http://www.careerladdersproject.org/wp-content/uploads/2011/06/forgottenjobs.pdf">contracted or disappeared</a>. At the same time, many jobs in fields dominated by women – like education and health care – have significantly increased.</p>
<p>In fact, female-dominated jobs have some of the <a href="https://www.bls.gov/ooh/fastest-growing.htm">highest projected job</a> and <a href="https://www.bls.gov/emp/tables/industries-fast-grow-decline-employment.htm">wage growth</a> in the economy.</p>
<p><a href="https://scholar.google.com/citations?user=3qAsZVAAAAAJ&hl=en">We are</a> <a href="https://scholar.google.com/citations?user=Fea_VscAAAAJ&hl=en">sociologists</a> interested in the following question: If jobs in female-dominated sectors represent the future, what will it take for men to take them?</p>
<h2>Who’s working where?</h2>
<p>Women have <a href="https://doi.org/10.1177/0891243210361475">made significant progress</a> entering male-dominated jobs – like <a href="https://www.catalyst.org/research/women-in-financial-services/">finance</a>, <a href="https://www.catalyst.org/research/women-in-law/">law</a> and <a href="http://www.aamcdiversityfactsandfigures2016.org/report-section/section-3/#figure-16">medicine</a> – over the past several decades.</p>
<p>However, men have made far less progress entering female-dominated jobs like those of teachers, nurses or human resource representatives, among others.</p>
<p>Men have largely avoided female-dominated work for two key reasons. First, men <a href="https://doi.org/10.1177/09500172004042773">may face social stigma</a> by entering jobs that challenge masculine ideals that they distance themselves from feminine activities.</p>
<p>Second, female-dominated jobs tend to <a href="https://doi.org/10.1353/sof.0.0264">pay less</a> than male-dominated ones, even when skill levels and education requirements are equivalent.</p>
<p>However, not all female-dominated jobs pay poorly. Jobs like nursing can offer high wages, good benefits and job stability. Yet even in this field, men remain a <a href="https://equitablegrowth.org/working-papers/rising-share-men-nursing/">small minority</a> at about 13%.</p>
<p>Prior research shows that <a href="https://doi.org/10.1007/s11199-015-0449-1">few men aspire</a> to work in female-dominated jobs, but we wondered what men who lose their jobs and become unemployed will do? Would they consider female-dominated work then? </p>
<p>It’s more than just an academic question because many men – particularly working-class men – <a href="https://www.foreignaffairs.com/articles/united-states/2019-09-19/american-working-man-still-isnt-working">may face unemployment</a> at some point in their careers.</p>
<p>Our <a href="https://www.sciencedirect.com/science/article/pii/S0049089X19301292">recent study</a> shows that men who are unemployed are much more likely to switch to a female-dominated job. And when they do, some men experience job advantages.</p>
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<iframe width="440" height="260" src="https://www.youtube.com/embed/ucvmcVNpANM?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">‘PBS News Hour’ created a video about men and masculinity.</span></figcaption>
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<h2>Wage and prestige bumps</h2>
<p>Men who enter <a href="https://www.sciencedirect.com/science/article/pii/S0049089X19301292">female-dominated jobs</a> experience, on average, a 4% wage increase and significant boosts to the prestige of their job relative to their previous job before unemployment.</p>
<p>In contrast, men who entered male-dominated jobs or jobs that had an equal balance of men and women either maintained or lost ground in wages and occupational prestige. Examples of mixed-gender jobs include claims adjusters, property managers and retail salespersons.</p>
<p>Our study suggests that female-dominated jobs may help mitigate common <a href="https://doi.org/10.1146/annurev-soc-071913-043237">scarring effects</a> of lost wages or prestige in a man’s subsequent job after being unemployed.</p>
<p>If female-dominated jobs tend to pay less than comparable male-dominated jobs, what explains these job advantages? We suspect that some men may be willing to take a female-dominated job only if it offers higher wages or more occupational prestige. Thus, they may specifically target upgraded jobs in these cases.</p>
<p>Employers may also more <a href="https://doi.org/10.1111/j.1559-1816.2008.00354.x">highly value</a> men’s previous occupational backgrounds in male-dominated or mixed-gender fields, allowing them access to higher level jobs than in other sectors. </p>
<p>Notably, there may be future benefits of entering female-dominated jobs, like stepping onto a “glass escalator.” <a href="https://journals.sagepub.com/doi/full/10.1177/0891243213490232">Research</a> on men in nontraditional fields have found that straight, white men are often fast-tracked to management positions, akin to riding an invisible – but very real – escalator up to the top.</p>
<p>These processes, of course, starkly contrast the <a href="https://www.mckinsey.com/featured-insights/gender-equality/still-looking-for-room-at-the-top-ten-years-of-research-on-women-in-the-workplace">glass ceiling</a> that many women face in which they experience barriers in rising to leadership and contribute to gender inequality within female-dominated domains.</p>
<p>However, these advantages accrue in female-dominated jobs only if men stay in them, and compelling <a href="https://doi.org/10.1177/0730888418780433">research</a> by sociologist Margarita Torre casts doubts that men will stay in these jobs for a long time.</p>
<p>Torre’s work shows that many men use female-dominated jobs as a stopgap position before moving back into a male-dominated or mixed-gender job.</p>
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<h2>Men in female-dominated jobs</h2>
<p>Having men doing “women’s work” may not just affect their careers. It could impact society as well.</p>
<p>Jobs associated with women are economically <a href="https://doi.org/10.1353/sof.0.0264">devalued</a> in the American economy, particularly <a href="https://workinprogress.oowsection.org/2016/10/31/like-women-men-who-are-hands-on-care-workers-also-experience-a-wage-penalty/">when they involve care work</a>, such as teaching, child care and health care. </p>
<p>Although we contend that female-dominated jobs merit <a href="https://doi.org/10.1353/sof.0.0264">better wages</a> regardless of men’s entrance, men’s participation in these jobs may enhance the job’s status and economic value. Indeed, research has shown that <a href="https://www.jstor.org/stable/1519732">wages tend to increase</a> after men enter jobs dominated by women, potentially because employers may more highly value the work that men do or more readily accept men’s negotiations for higher wages. </p>
<p>Men’s entrance into female-dominated jobs could also help reduce potential labor market shortages, <a href="https://money.cnn.com/2018/05/04/news/economy/health-care-workers-shortage/index.html">like those expected in health care</a>. Depending on the job, such position may provide men with greater job stability and employment <a href="https://doi.org/10.1177/0003122413487197">opportunities</a>, given the high projected <a href="https://www.bls.gov/ooh/fastest-growing.htm">job growth</a> of many female-dominated jobs.</p>
<p>Moreover, men’s entrance into female-dominated jobs may push along what we, and many other scholars, see as a needed shift in <a href="https://doi.org/10.3389/fpsyg.2018.01353">how the culture values</a> work traditionally done by women. If female-dominated jobs were as highly valued as comparable male-dominated jobs, the incomes of women in these positions – and thus women’s broader economic status – would <a href="https://doi.org/10.1353/sof.0.0264">increase</a>. </p>
<p>Our research shows that economic conditions are strongly associated with men’s entrance into female-dominated work. The challenge is getting past the point that men in the workforce need an economic shock like unemployment to consider female-dominated jobs.</p>
<p>Raising wages in female-dominated jobs and removing stigmas associated with men doing them would go a long way in advancing men’s integration into these jobs and reducing gender inequality in the workforce.</p>
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<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Men who work in female-dominated fields tend to get more prestige and higher wages.Jill Yavorsky, Assistant Professor of Sociology, University of North Carolina – CharlotteJanette Dill, Associate Professor, University of MinnesotaLicensed as Creative Commons – attribution, no derivatives.