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Despite Washington’s labor shortage, thousands on long-term unemployment can’t find a job

By Paul Roberts, The Seattle Times
Published: August 8, 2021, 6:03am
2 Photos
Fitness trainer Priscilla Bell leads a group exercising outdoors at the Delridge Community Center on Monday, June 21, 2021. She was laid off during the pandemic and still has not found work.
Fitness trainer Priscilla Bell leads a group exercising outdoors at the Delridge Community Center on Monday, June 21, 2021. She was laid off during the pandemic and still has not found work. (Steve Ringman/Seattle Times/TNS) Photo Gallery

Like hundreds of thousands of other Washingtonians, Priscilla Bell, a personal trainer in Seattle, lost her job during the first chaotic weeks of the pandemic last year.

But unlike many of those laid off due to COVID-19, Bell hasn’t been able to find work since, despite an intensive job search that started when gyms partially reopened for the first time last August.

Instead, the 58-year-old is among nearly a quarter-million Washingtonians who’ve experienced long-term unemployment during the pandemic — and who often don’t know how, or if, they’ll be able to get back to work.

“My faith in the job market is not very high right now,” says Bell.

It’s one of the pandemic’s biggest economic puzzles. Washington is recovering from the COVID-19 recession so strongly that labor shortages are showing up in industries ranging from food service and warehouses to accounting and finance.

Yet amid that boom, a surprisingly large number of people have struggled to find work — some since the start of the pandemic.

During June of this year, 176,992 Washingtonians, or 4.6% of the state’s workforce, received an the emergency federal benefit for unemployed workers who have exhausted their 26 weeks of regular state unemployment benefits, according to the state Employment Security Department (ESD).

By comparison, 37% more Washingtonians were receiving extended benefits in June than were a similar group at the same point in the Great Recession, according to ESD data — even though the state’s population today is only around 14% larger.

All told, 248,423 people in Washington have received extended benefits during the pandemic, as of July 24.

Having so many people out of work for so long comes at a substantial cost. Beyond the threat to the economic recovery, long-term unemployment, which the federal government defines as 27 weeks or more, can cause long-term damage to workers’ job prospects and future earnings.

Long-term joblessness can have “a scarring effect,” says Jennie Romich, a professor in the University of Washington School of Social Work and an expert in poverty and social policy.

That effect is all the more troubling given that long-term joblessness in the pandemic has disproportionately hit certain groups, among them older workers, Black workers, and workers with less education.

All recessions spur long-term unemployment; indeed, the Great Recession and other recent downturns were followed by “jobless” recoveries and lingering high unemployment.

But the current surge differs in ways that could make it harder to resolve — and which have many blaming the crisis on the government’s own policies.

During the Great Recession, long-term unemployment largely reflected a weak demand for labor, especially in sectors that were hit hard by layoffs, such as construction, says Anneliese Vance-Sherman, an ESD regional economist who covers the Seattle area.

Today’s supply-demand picture is far more fractured, Vance-Sherman says. Not only is demand wildly uneven (scorchingly high in some industries, nonexistent in others) but many workers themselves have been slow to return.

“The pandemic really impacted the supply of labor, in a way that we haven’t seen with other recessions,” Vance-Sherman says. “This is just a different animal.”

Benefits to blame?

For some employers and politicians, the main difference is what they see as overly generous federal pandemic unemployment benefits, currently $300 a week, that are added to regular state benefits.

Many see those extra federal dollars, which expire Sept. 6, as fueling the labor shortage, especially at lower-wage service companies, such as restaurants, where combined federal and state jobless benefits have averaged around 90% of normal wages, ESD data show.

Jeremy Flowers, who works with the Western Washington offices of Express Employment Professionals, a recruiting company, says he sees “a little bit” of that work-vs.-unemployment tension when talking with job candidates for lower-wage jobs: “What’s the benefit of x dollars a week when I can make the same amount of money at home?”

That tension may also help explain the large number of extended unemployment claims filed by workers with only a high school degree or less, who tend to have lower incomes. Although these workers make up around 25% of the state labor force, they accounted for 41.3% of all extended unemployment claims filed in the week ending July 17, according to ESD data.

But pandemic benefits can account for only part of the long-term unemployment crisis, experts say.

Higher-income workers, for example, generally can replace only around half or less of their lost wages with unemployment benefits. (Currently, the average combined weekly benefit paid in Washington is $665, or well below the state’s average weekly wage of $1,475, and current combined benefits max out at $1,229.) Yet nearly 20% of extended unemployment claims came from workers with a four-year college degree or higher, who tend to have higher incomes, ESD data shows.

The reality is that long-term unemployment is being driven by a constellation of factors, industry officials and many economists say.

Some unemployed workers are staying home due to fear of COVID-related safety risks in the workplace, Flowers says — concerns that may only rise with the surging delta variant.

Others haven’t been able to take jobs because they couldn’t find child care for their young children, or their school-age children were at home with remote learning.

Childcare was the obstacle for Seattle resident Lesley Heerwagen. The 38-year-old mother of two got her teaching certificate several years ago, but had to delay her job search last year because she wasn’t comfortable having her 3-year-old son in day care during the pandemic.

Yet because many day care facilities permanently closed or still haven’t fully reopened, it took Heerwagen months to find another opening for her son so she could resume her job search. Now, she worries that she’ll be going up against candidates who haven’t had such a long layoff. “There’s so much competition,” says Heerwagen, who adds that she has not applied for unemployment because her husband is working.

When people consider going back to work, “the continuing $300 plays a role in that decision, for sure,” says Jake Vigdor, an economist with the University of Washington Evans School of Public Policy who has studied the Seattle-area labor market. “But [so do] issues with finding child care, health concerns, and so forth.”

In many cases, however, the back-to-work decision isn’t entirely up to the workers.

Historically, laid-off workers have returned to their former job or industry, says Vance-Sherman. Yet many of the businesses hit hardest by COVID still haven’t fully recovered.

Manufacturing, which represented around 8.5% of Washington’s pre-COVID workforce, saw some of the heaviest layoffs last year and now accounts for 11.4% of extended unemployment claims filed in the week ending July 17.

Boeing’s workforce has lost thousands of jobs— including more than 3,200 well-paid engineers and technical staff — since January 2020.

Other hard-hit sectors such as the performing arts and tourism have also been slow to rehire.

Zach Burns, 32, of Kirkland, lost his job as a sound engineer for a local dinner theater in March 2020 and hasn’t been able to find a similar job. “The industry is still trickling back,” says Burns. “So there’s not a whole lot out there.”

Overall, despite the rebound, the state’s labor force — 3,403,100 as of June 2021 — is still down by nearly 76,000 jobs compared to February 2020, just before the pandemic, and is roughly the same size it was in March 2019.

Long-term unemployment is also hammering different demographic groups in patterns that seem little connected to jobless benefits.

Black workers, who represent just 4.2% of Washington’s pre-COVID workforce, filed 9.9% of extended unemployment claims during the most recent week, while white workers, at 74% of the labor force, filed just 58.6% of those claims.

One factor in that disparity: Black workers were overrepresented in service jobs that suffered some of the heaviest losses during the pandemic, and “some of them are just not coming back,” says Andrea Caupain, CEO of Byrd Barr Place, a Seattle-based nonprofit that works with low-income families.

Another factor: A systemic lack of access to technology and technology training before the pandemic meant some Black workers were already behind other workers in the digital skills that employers increasingly require, says Felisa Bryant, director of workforce development at the Urban League of Metropolitan Seattle. “The problems were already here,” says Bryant. “The pandemic just brought them more to light.”

Another big disparity is around age. Workers 55 and older accounted for 21.3% of the state’s pre-COVID labor force but 28.2% of extended unemployment claims. That fits with national data showing a substantial uptick in “unplanned” retirements during the pandemic.

Philip Dawdy, 58, a veteran political lobbyist from Seattle, says he hasn’t found any new lobbying work since the pandemic started, and now fears “not being gainfully employed again — or even having an opportunity to be gainfully employed.” When pandemic unemployment benefits end next month, he says, “I’m scared to death about what I’m going to do.”

“It’s dismaying,” adds Seattle-area resident Suzanne Ferris, 69, who lost her job as a fitness instructor last year and hasn’t found another job since, despite applying for dozens of openings.

Several older unemployed workers say they worry employers are favoring younger candidates, who typically command lower salaries and may be more comfortable with office workplace technology.

“Certainly no employer has said, ‘We think you’re too old,’” says a Tacoma-area woman in her mid-60s who has only been able to find a few freelance gigs since being laid off from a corporate communications job early in the pandemic. “But on average, I’m going to have to work a little harder to learn a new piece of software or memorize things quickly. That’s way more than made up for by depth and breadth of experience — but the value of that isn’t obvious to everyone.” She asked that her name not be used to avoid hurting her job prospects.

Employers aren’t explicitly discriminating against older workers, says Vance-Sherman — but she adds that “stereotypes” and “assumptions” about age and technology may result in “systemic barriers that do discriminate against older workers.”

Unemployed workers point to another pandemic anxiety: that COVID-related gaps on their résumés — and the implication that their jobs skills have eroded — are putting off prospective employers.

Many employers and recruiters say the labor market is so tight that employers aren’t as focused on résumé gaps as they normally might be.

But they say long gaps can still be a problem. While employers generally “have been sensitive to what has happened” during the pandemic, for a candidate who “has been out more than one year … we can start to see some disadvantages” for competitive positions, says Josh Wong, a director at the Seattle office of CVPartners, a placement firm specializing in finance, accounting, audit and tax jobs.

Given the complicated reasons behind today’s crisis of extended joblesness, many economists and industry leaders say the problem won’t vanish when the $300-a-week pandemic benefit ends next month.

To be sure, the ranks of the long-term unemployed have shrunk in recent weeks. Economists credit that partly to the higher wages many employers have had to offer to fill openings. And as of July 4, claimants must search for work while receiving benefits, a requirement that was suspended last spring for safety reasons.

But other obstacles, such as lack of child care or health concerns, aren’t likely to fade as quickly.

For unemployed parents with young children, for example, the enticement of higher wages may be more than offset by the cost and inaccessibility of child care. “Is it really worth it to go to work just to turn your paycheck over to child care?” says the Urban League’s Bryant.

Instead, Bryant says, many unemployed workers may be holding out for a job that pays “not just earning a wage but a living, sustainable wage — because there’s a difference.”

Others may be waiting for jobs that don’t require moves to costly cities like Seattle, or long commutes, or even being in an office at all. Wong says employers advertising job openings that are “100% in-office are having a tough time with hiring.”

Vance-Sherman thinks a turning point in the long-term unemployed crisis could be the start of the school year, which, barring a surge in COVID cases, may allow many unemployed parents “to be able to step back into the workforce.”

But other long-term unemployed workers may face some tough choices.

Burns, the sound engineer, says he has found job openings in parts of the country where live performance is more fully reopened. But those opportunities would come with a substantial salary cut “and would mean the prospect of moving my entire life,” he adds.

Others feel they may be forced to change careers — and worry that could mean taking a pay cut or struggling with a new skill set.

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Bell, the exercise trainer, says she has looked into administrative jobs, but would need to catch up on new office technologies. “Lord, I don’t know Microsoft Word … or how to use Excel,” Bell says. She’s sure she could master the technology if a prospective employer would train her — but fears being beaten out by candidates who already have that know-how.

Instead, like many workers who’ve lost jobs they had for decades, Bell wants to hold out a little while longer and see if her old industry rebounds.

After nearly 40 years as a trainer, she says, “it’s all I know how to do.”