The Rate Of Unemployment Rises, But The Labour Market Has Recovered Completely

The coronavirus pandemic in spring 2020 caused a significant spike in Oregon’s unemployment rate, which increased from 3.5% to 3.7% in August. However, Oregon has since gained back all of the jobs lost during that brief downturn.

The rate of 3.7% matched the average for the country. By historical standards, which date back to 1976, it is still low; Oregon’s most recent low was 3.4% between November 2019 and February 2020, a period of four months. (Some records go back to before 1976, but they cannot be compared to recent data.)

According to Gail Krumenauer, an economist with the Oregon Employment Department, “we are still close to that record low rate we observed right before the epidemic.” In 2022, Oregon will continue to see high job growth and labor market expansion.

The following industries saw the most growth in August: manufacturing, 3,800; leisure and hospitality (restaurants, bars, lodging, entertainment); construction; 1,400; professional and business services; 1,000; and government, 3,800, mostly in public schools, which laid off fewer workers this summer than in previous summers.

800 jobs were lost in other sectors, while 700 jobs were lost in financial activities.

With 1,974,700 jobs overall, Oregon outperformed pre-pandemic February 2020 by 2,500. All of the lost jobs in the private sector have now been recovered.

The leisure and hospitality industry is still 12,000 short of where it was before the outbreak. However, according to Krumenauer, the industry-led growth over the previous 12 months with 18,500 employees (9.9%). Manufacturing gained 9,900 (5.3%), professional and business services gained 1,700 (4.7%), and construction gained 9,600 (8.7%).

Construction, manufacturing, trade, transportation/warehousing/utilities, professional and technical services, real estate, and rentals and leases are among industries that presently have more jobs than they did before the epidemic.

The labor force participation rate in Oregon has stabilized at 63.5%.

According to Krumenauer, “it’s still the highest participation rate we have seen in Oregon in a decade.”

Although the ratio is declining, there were twice as many jobs available in Oregon for the whole year as there were unemployed persons, and employers stated that many of those positions were difficult to fill for a variety of reasons.

By the end of this year, the Oregon Office of Economic Analysis, which creates the state’s quarterly economic and revenue predictions, had predicted a complete recovery.

There is a different mix of jobs today. A study from the employment department was published in August and covered the first two years of the pandemic. According to the report’s analysis of payroll records, 36% of people who were laid off went back to work for their previous companies, and 12% had a new employer working in the same industry. 23% of the workforce ended up in another industry. Others simply retired or departed Oregon’s workforce.

Two Crises

But it took Oregon less than two years to recover from the pandemic recession, compared to nearly seven years for the state to recover from the Great Recession (2007-09).

Both, according to Krumenauer, were dramatic, but in different ways.

During a global pandemic, she claimed, “we took what was otherwise a robust economy and closed enterprises for public health and safety precautions.”

“Even though some of the closures persisted for a long, the majority of the layoffs we observedβ€”roughly nine out of tenβ€”were brief. Many of those employees were allowed to return to their jobs. That was distinct from what we saw during the previous downturn.”

Contrarily, almost a year after analysts determined that the beginning of that downturn was in December 2007, subprime mortgages and speculation caused a boom in home values, followed by a collapse of financial markets in fall 2008.

Two years into the recession, we were still losing employment, according to Krumenauer. “The majority of the layoffs were long-term. After the recession ended, there was modest job growth for the first few years. So the recuperation period was prolonged.”

The Labour Market Has Recovered Completely
The Labour Market Has Recovered Completely

According to acting director David Gerstenfeld, the pandemic caused a record one-month spike in the unemployment rate, from 3.4% in March to 13.3% in April 2020, when it took 18 months for Oregon employment to plummet to its lowest levels during the prior downturn. More than the state had given out in the preceding ten years, 580,000 Oregonians earned a record $7.5 billion in unemployment benefit payments in 2020.

In comparison to the previous downturn, “there was a more severe impact,” he said.

Federal assistance is essential

From 2011 to 2019, Gerstenfeld oversaw the agency’s unemployment benefits section. In May 2020, he was named acting director. He claimed that due to declining federal funds, the final 200 limited-duration employees hired two years ago to assist with Oregon’s record number of unemployment benefits claims will be laid off on September 30. The U.S. Department of Labor provides funding to Oregon and other states so they can staff their employment offices.

Along with stimulus payments to individuals and forgiven loans to businesses, unemployment benefitsβ€”some of which were made accessible by Congress for the first time to self-employed and gig workersβ€”helped keep the U.S. economy afloat.

The American Rescue Plan Act, passed in March 2021, added $1.9 trillion to the $2.2 trillion granted by the CARES Act in March 2020.

The recovery was largely attributed to a number of stimulus initiatives, including unemployment payments from various programs, according to Gerstenfeld. When the preventative health measures went into force, they maintained the economy’s overall strength.

Although people are once again taking on debt, the pandemic helped many to reduce their burden. According to Krumenauer, customers are still looking for goods and services, which make up 70% of all economic activity in the United States.

She stated, “We have seen that solid demand remains even as inflation has increased.” “It has led to a situation where there are more job opportunities than unemployed persons in Oregon and across the United States.”

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