Latest News

Help My Career: People are ‘long social distancing’ due to COVID-19. Economists say that’s contributing to a drop in labor-force participation.

More than two years after the coronavirus pandemic began, social distancing is keeping some workers from going back to work. It’s a decision, medical experts say, that everyone must make for themselves, based on their own circumstances, but some economists say people opting out of work throughout the course of the coronavirus pandemic may also be having an impact on economic output.

Some people are not prepared to let their guard down — in the knowledge that COVID-19 has not gone away, according to this working paper distributed by the National Bureau of Economic Research. Some 13% of American workers say they will continue social distancing as the economy opens up and cases fall, and another 45% said they will do so in limited ways. Meanwhile, only 42% of those workers said they plan a “complete return”.

The study, entitled “Long Social Distancing,” estimated that people’s unwillingness to be in close proximity to each other — justified in many cases, especially for those who are immunosuppressed and/or have elderly relatives — has reduced labor participation by 2.5 percentage points in the first half of 2022 compared to what economists would normally expect to see — translating to $250 billion in potential annual output, representing nearly a 1 percentage-point drop. 

The authors of the report define long social distancing as “persistent behavioral responses to the COVID-19 pandemic, whereby (some) individuals avoid face-to-face encounters in public places, including the workplace and public transit.” The paper was written by Steven J. Davis, research associate at the University of Chicago, Jose Maria Barrero, co-founder of the WFH Research, a project that looks at the shift to remote working, and Nicholas Bloom, a professor in the department of economics at Stanford University.

Some workers are understandably concerned about COVID-19. COVID-19 cases and hospitalizations in the U.S. are on the increase, and intensive-care-unit beds are being filled again, in a trend that may signal an end to the stable period the U.S. experienced during the fall months. Some states, including New York, Utah, and California, saw a higher rate of new cases.

The daily average of new cases was up 28% on Monday from two weeks ago, to 53,019, according to a New York Times tracker. The number of daily cases being admitted to Intensive Care Units rose 21% to 4,136 over the same period, while the number of daily deaths from COVID-19 dropped 11% to 261, the newspaper said.

Medical experts are warning that new omicron subvariants are on the rise and are quickly replacing earlier ones. The most recent data release from the Centers for Disease Control and Prevention showed that the BQ.1.1 and BQ.1 sublineages of BA.5 accounted for 62.8% of all cases in the U.S. in the week through Dec. 3, exceeding the 13.8% of cases caused by BA.5.

“Medical experts are warning that new omicron subvariants are on the rise and are quickly replacing earlier ones. ”

“The rates of COVID-19–associated hospitalization and death are substantially higher among unvaccinated adults than among those who are up to date with recommended COVID-19 vaccination, particularly adults aged 65 years, and over, according to the CDC.

Those early, fraught months of COVID-19 when millions of people worked from home and hospitals were filling up in the U.S. with coronavirus patients also provided a rare opportunity for people to reevaluate the role of work in their lives. And, notwithstanding recent layoffs in the tech sector, now many have leverage: Unemployment is falling and wages are rising, as companies struggle to attract and retain workers.

Writing for the Guardian newspaper last month, Tedros Adhanom Ghebreyesus said the world has never been in a better position to end the pandemic that has killed almost 6.5 million and infected more than 600 million, but he also sounded a cautionary note: Many people around the world are still experiencing “prolonged suffering” as symptoms linger for months.

“While the pandemic has changed dramatically due to the introduction of many lifesaving tools, and there is light at the end of the tunnel, the impact of long COVID for all countries is very serious and needs immediate and sustained action equivalent to its scale,” Tedros wrote. His piece was part of a new series by the paper titled “Living with long COVID.”

The share of working-age people in the labor force dropped for the third month in a row. Some 186,000 people left the labor force in November, the latest government figures show. The labor force participation rate ticked down to 62.1% in November from 62.2% in the previous month, the Bureau of Labor Statistics said Friday. The number has yet to recover to the pre-pandemic level of 63.4% in February 2020. 

The authors in the latest NBER report analyzed the results of the monthly “Survey of Working Arrangements and Attitudes,” which was founded by a group of economists in 2020 in response to the dramatic impact of COVID-19 on working life. The survey polls nearly 27,500 U.S. residents between the ages of 20 to 64 who have recent experience working. The authors looked at results from February 2022 to July 2022, and focused on people who had at least earned $10,000 in 2021. 

About one-fifth of the respondents who were not participating in the labor force during the week the survey was conducted said concerns about catching COVID-19 or other infectious diseases was the primary or secondary reason they were not currently working or seeking work. The three authors of the paper came from the business and economic departments of Instituto Tecnologico Autonomo de Mexico, the University of Chicago and Stanford University. 

“It is more common among older persons, women, the less educated, those who earn less, and in occupations and industries that require many face-to-face encounters,” the researchers wrote. “People who intend to continue social distancing have lower labor force participation — unconditionally, and conditional on demographics and other controls.”

Some 17.6% of respondents who held a high-school education or less showed a tendency for strong “long social distancing,” compared to 12.8% for those who had completed some college education, 8.9% for college graduates, and 7.6% for those holding a graduate degree. Similarly, those workers earning the least amount of money were more likely to miss work due to their desire to social distance.

Those reporting a strong desire to continue social distancing are more likely to work in jobs that require face-to-face encounters, the study found. In the early days of the pandemic — and before vaccines were available — millions of office-sitting workers were able to work from home, while many lower-wage workers faced the highest risk of contracting COVID-19.

Long social distancing is about 3 percentage points higher for Democrats than for Republicans and even higher for those who identify as Independents or with smaller political parties, the researchers found. “Along several dimensions – education, earnings, industry, and occupation – strong-form long social distancing is more common when remote work opportunities are fewer,” they added.

Businesses have struggled to find workers to fill jobs over the last 12 months, especially for service and labor-heavy positions. Labor shortages led to an increase in wages, and contributed to 40-year high inflation. Two groups of workers are yet to come back in earnest, those aged 20-24 and those over 65 years, the NBER study concluded. Experts say unless such workers return to the workforce, hiring will continue to be tough and labor shortages will persist. 

(This story was updated to include data on COVID-19 cases and hospitalizations.)

Related:

IMF head joins chorus calling on China to adapt COVID strategy as officials pledge to boost vaccinations among elderly

China begins to loosen COVID rules

U.S. unlikely to see another late-year omicron wave, but Fauci urges people to get new COVID booster

We want to hear from readers who have stories to share about the effects of increasing costs and a changing economy. If you’d like to share your experience, write to readerstories@marketwatch.com. Please include your name and the best way to reach you. A reporter may be in touch.

What's your reaction?

Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:Latest News