How quickly will America’s labour market recover? — Macro
The way that crises can effect structural unemployment as people’s skills deteriorate leading to ‘lasting scars on both workers and the economy.’ Seems like a shorter period of time in this specific crisis as lots of workers were put back to work in autumn. Also, the impact may be less bad than expected because many of the jobs that were temporarily lost were ‘lower skill’ meaning that the skills lost could be gained back in a shorter period of time. However, while service workers made up a decent chunk of the economy, there were even more professionals and managers which tend to have much higher skill sets, and so have much more to lose in terms of being blocked out of the economy from their job sets. Even with this a strong majority of the laid of labour force — aorund 3.9 of the 5.7 million people — left specifically because of covid, making it likelier that they will return. Out of those who return, a significant number will ikely also have continued working on zoom over the pandemic, decreasing the deterioration of skills and maybe developing new ones such like the ability to use video conferencing software to allow more economic globalisation. The main issue that the article shows is that consumer spending relies on employment, and employment relies on consumer spending, and so without government intervention its possible that neither rises and aggregate demand continues to fall indefinitely. This could be a much bigger issue with governments that are more against intervention, leading to a much more drawn out recovery with even more skill deterioration and possibility for structural unemployment.