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The Post-Pandemic Labor Market’s Long-Term Scars

Even before the COVID-19 crisis, African-Americans, Hispanics, women, and workers without a post-secondary education faced dimming prospects as a result of automation and other trends. Now, these forces have been strengthened, creating an even bigger mismatch between worker qualifications and available jobs.

BERKELEY – Thanks to the rapid deployment of vaccines, COVID-19 infections, hospitalizations, and deaths in the United States are declining, and pandemic restrictions on economic activity are being eased. But even with labor markets gradually improving, the economic recovery has been slow and uneven, and there is a long way to go.

According to the latest official figures, overall US employment is still down by about 9.5 million jobs from when the recession hit, and by nearly 12 million from its pre-pandemic trend. Unemployment, adjusted for the sharp drop in labor-force participation, is around 10%, and the rate is even higher for African-Americans, Hispanics, women, and the less educated, reflecting both the dual nature of the pandemic and longer-running labor-market disparities.

Another trend that predates COVID-19 is the transformation of work through automation and digitalization – processes accelerated by how businesses and consumers have responded to the pandemic. This trend, too, threatens to deepen pre-existing inequalities, because black and Hispanic workers are overrepresented in the jobs that are at the greatest risk from automation.

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