The Other Reason the Labor Force Is Shrunken: Fear of Covid-19

Wall Street Journal (04/11/21) Guilford, Gwynn

The number of Americans with jobs is down by 8.4 million from a year ago. Fear is one of the most important reasons why fewer Americans are holding jobs. About 4.2 million adults aren’t working because they are afraid of getting or spreading the coronavirus, according to a survey conducted by the U.S. Census Bureau in the second half of March. Some companies say labor is scarce even though the unemployment rate is 6%. This suggests that even with generous fiscal and monetary stimulus, the labor market might not fully heal until Covid-19 is under control. Sixty percent of applicants on ZipRecruiter prefer remote work, but just 9% of vacancies offer that.

Many economists assume a successful vaccine rollout. However, fear of the virus could keep people out of the workforce and add inflation pressure. Employers could be forced to raise wages to hire enough workers or keep those that they have. About 15.5% of adults say they either definitely or probably won’t get vaccinated, according to the most recent Census survey.

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