I boldly predict that 2021 will not be as bad as 2020. Yes, that’s a low bar, but I believe the local labor market will see only a modest improvement at best.
First, a recap of 2020. COVID put the global economy into a steep dive last March. The recovery that began in May was just as steep, but only partial. Here in Clark County, we lost 19,700 jobs in March and April, more than in the Great Recession of 2007-08. By November, only 7,200 jobs—just more than a third—had come back. That means more than 12,500 local workers were still unemployed eight months later. That same proportion held for the Portland metro area. Some industry highlights regarding percentage of losses or gains: total jobs, -7 percent; health care, -2 percent; retail trade, -3 percent; manufacturing, -4 percent; construction employment, -8 percent; business services (like staffing services, janitorial, landscaping), -11 percent; food services, -17 percent; K-12 education, -21 percent; hotel/motel, -36 percent. A notable employment gain was in finance, which grew 1 percent.
Unemployment remains a big concern, as does underemployment—people still working but at greatly reduced hours—and therefore, income. In mid-December, even after seven months of recovery, here’s the breakdown of county residents who filed unemployment claims: almost 2,500 food service workers, 1,800 managers, 1,300 office workers, 1,200 sales workers and 1,200 personal care workers. Claimants were predominantly women—54 percent, despite only 46 percent of the workforce was female. Although a third of the county workforce hold a bachelor’s degree or higher, only 18 percent of claimants had that much formal education. A preliminary analysis indicates that in Clark County, lower-wage workers were disproportionately unemployed—38 percent of claimants were paid less than $18 per hour in the last quarter of 2019, versus 27 percent of all jobs paying in that range.
The pace of economic recovery depends largely on three factors: the purely health component (vaccine development, COVID mutation); people’s behavior and federal policy. First off, the approval of vaccines is a huge positive. On the flip side, the discovery of new strains of the virus and its presence in the wild are worrying. Second, economic activity will not return to “normal” until we reach herd immunity, with (according to Dr. Fauci) 90 percent of the population vaccinated. Current polling shows an improvement in public acceptance of the vaccine, but it is still well below that 90 percent level. Additionally, public health experts predict it will take many months to vaccinate that many people. Until then, in order to reduce infection rates, we must continue to mask up and be social distanced—probably through much of 2021. As a nation we haven’t had a good track record at following basic public health guidelines. If unsafe behavior continues into the new year, it will hamstring any economic recovery.
Some perspective: an employment growth rate of 3 percent would be a pretty good year. That would get us back to 165,000 jobs—still more than 7,000 jobs short of last February. We’d have to see an 8 percent growth rate to get us back to pre-COVID employment levels—a rate which has never been attained in Clark County.