(Reuters) – Judith Ramirez received a letter this month that she’d been dreading: The Honolulu hotel that furloughed her from a housekeeping job in March, during the lockdown triggered by the coronavirus pandemic, made her layoff permanent.
Ramirez, 40, was originally told she might be called back after business picked up. But infections increased in Hawaii over the summer and quarantine restrictions for visitors were extended, a blow to the state’s tourism-dependent hotels.
Six months into the pandemic, evidence of longer-term damage to the U.S. labor market is emerging, according to separate analyses of detailed monthly jobs data by labor economists and Reuters.
Retirements are drifting up, women aren’t reengaging with the job market quickly, and “temporary” furloughs like Ramirez’s are becoming permanent – trends that could weigh on the U.S. economic recovery in the short term as well as the country’s prospects in the long term.
Economic growth depends on how many people work. If more retire, or are kept from the job market because of childcare or health and safety issues, growth is slower.
“In the first few months of the recession we were much more focused on how many jobs could come back, how many jobs could be preserved,” said Kathryn Anne Edwards, a labor economist at RAND Corp. “Now the question is really how much damage has this done.”
WOMEN, OLDER WORKERS DROP OUT
The U.S. economic drag is falling heavily on two groups, women https://www.reuters.com/article/health-coronavirus-usa-women/analysis-working-women-and-especially-single-moms-are-hit-hard-by-coronavirus-downturn-idUSL1N2CP02O and older workers, who fueled https://www.reuters.com/article/us-usa-economy-women/tight-u-s-labor-market-shrinks-gender-and-race-gaps-to-record-lows-idUSKCN1VR2JC a rise in labor force participation prior to the pandemic. That supported stronger-than-expected economic growth in 2018 and 2019, and showed how a historically low unemployment rate drew people back into jobs.
Those workers may now be getting stranded. Women and workers aged 65 and older make up a disproportionate share of the 3.7 million people no longer working or actively seeking a job since the pandemic hit, Labor Department data show.
People 65 and older made up less than 7% of the workforce in February, but 17% of those who have left the labor market through August. Women previously accounted for 47% of the workforce, but make up 54% of the departed.
Initial evidence of longer-term trouble is starting to show in the monthly Current Population Survey (CPS) that forms the basis of regular government employment reports.
After a spike in women leaving the labor force in the early months of the pandemic, particularly to tend to family responsibilities, there’s been slower movement back into jobs compared to the months before the pandemic, according to an analysis of CPS data by Nick Bunker, economic research director for North America at the Indeed Hiring Lab.
The percentage of women and men who moved from employed to out of the labor force jumped as the pandemic layoffs hit in April. The number of women, however, who cited child care or family responsibilities as the reason, increased 178%, while the number of men citing it less than doubled, Bunker’s analysis showed.
The percentage of those women moving in the other direction month to month – from caring for family into a job – meanwhile has dropped, to a low of 5% in April from 6.6% in 2019, though it rose to 5.8% in July. It is lower for men too.
The data “suggests … that being out of the labor force for family reasons is a ‘stickier’ state” than prior to the pandemic, Bunker said.
The Center for Retirement Research at Boston College found CPS data shows a rising share of workers 65 and older are calling it quits, a development many economists expected given the risk COVID-19 poses to older people.
Nearly a fifth of that age group working as of July 2019 were retired as of July of this year, compared to 17% for the prior year, the center’s research concluded. The percentage of these workers who consider themselves “retired” instead of merely out of work also rose steadily in recent months, from 14.2% in April to 19.5% in June.
“It is something we expected might happen – that people who were close to retirement might transition earlier,” said Anqi Chen, the center’s assistant director for savings research.
NOT LIKE LAST RECESSION
The situation is rekindling debates from a decade ago about how unemployment can lead to long-term economic “scarring,” but the specifics are different.
The 2007-2009 recession fell disproportionately on the male-dominated construction and manufacturing industries. The pandemic has caused more job losses in services concentrated among women, and brought the added complication of school closings and concerns about the safety of daycare centers and nursing homes.
The road back to employment may be getting harder, as suggested in the analysis of CPS data by Rand’s Edwards. Of 7.6 million people “temporarily” laid off as of June, the number who had found jobs by July – 2.4 million – was eclipsed by the 2.8 million who either left the labor force altogether or said they were no longer expecting to get their jobs back. That’s the first time in the pandemic that was the case.
Ramirez, the laid-off housekeeper, said she has been looking for a job, but not many places are hiring with travel sharply down from pre-pandemic levels and many retail stores closed. Some businesses say they have a list of furloughed employees waiting to be called back. “There’s no hiring here,” she said. “People don’t know we are struggling.”
(Reporting by Howard Schneider and Jonnelle Marte; Editing by Paul Simao)
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
