Jobs report: Delta is claiming livelihoods
For months, the delta variant has been claiming lives. Now – much like the original strain of the coronavirus - it is also claiming livelihoods.
The U.S. economy added 235,000 jobs on net in August, the Bureau of Labor Statistics reported Friday. This was only about a third of what economists had been forecasting – a huge disappointment.
So what went wrong? Why did hiring sputter? Delta’s fingerprints are all over this report.
The sectors most sensitive to COVID-19 risk took a major beating. Food services and drinking places (that is, restaurants and bars) lost 41,500 jobs in August. The sector had been growing rapidly, averaging 227,000 jobs per month over the prior six months. That industry is deeply in the hole; there were almost a million fewer bar and restaurant jobs in August than there were when the pandemic began.
The retail industry also lost jobs. So did, somewhat counterintuitively, the health-care sector – perhaps a result of more hospitals delaying elective procedures, patients avoiding nursing homes and other congregant settings, and/or staff at those places burning out and quitting. Employment at child-care facilities – tenuous even before the pandemic – also fell.
Meanwhile, there were increases in economic activities likely to be boosted by higher COVID risk. The number of people who teleworked, for example, rose for the first time since December. Hiring also increased in the transportation and warehousing sector.
But warning signs are flashing. Privately produced data on restaurant and flight bookings show Americans are becoming more cautious. So what can be done to boost employment for the workers and industries at risk?
Republicans will likely argue for cutting unemployment benefits, and roughly 7.5 million people are slated to lose their benefits on Labor Day as the remaining federally funded emergency unemployment programs end. But remember: A lot of states have already halted participation in these federal programs. So far, the states that cut access early do not appear to have appreciably different rates of job growth than those states that have kept the extra benefits in place.
There are a lot of differences between states besides this one policy choice – including rates of COVID transmission. But one reason why reducing unemployment benefits might not have much effect on hiring is that so many other factors are also holding people back from taking available jobs. These include lack of child care, transit issues and of course rising COVID risk.
It is quite possible that reducing jobless benefits while the economy remains weak could ultimately slow down the recovery, at least in some parts of the country. That’s because people who lose benefits but are still unable to find or accept available jobs now have less spending power. The local businesses they rely on then have less money coming in.
The Federal Reserve could intervene, but it’s in a tricky position.
The best and most obvious remedy? Clamp down on COVID transmissions. As has been the case since early 2020, the virus is in control of the economy; to get the economy back on firmer footing, we must control the virus.
This is easier said than done, of course, particularly in some Republican strongholds. In Florida and Texas, for instance, the governors have forbidden vaccination mandates, making it harder to safely resume normal economic lives.
If governors want their economies to recover, they must get vaccination rates up and encourage (or, better yet, require) other complementary mitigation strategies, particularly for children too young to get vaccinated.
Instead, perversely, some Republican lawmakers are trying to block such measures, even as they complain about the slowdown in hiring that is the obvious result of uncontrolled COVID spread.
As I said last month: The key to more jobs is more jabs.
Contact Catherine Rampell at crampell@washpost.com.