Though the job market is strong right now for highly paid professionals and low-wage service workers alike, not everyone can find a match for their skills, experience or location. (Photo: Shutterstock)
Despite the abundance of help-wanted signs, many jobs lost during the pandemic likely will not come back.
Economic data show that companies have learned to do more with less over the last 16 months or so, according to The Wall Street Journal. Output nearly recovered to pre-pandemic levels in the first quarter of 2021 — down just 0.5% from the end of 2019 — even though U.S. workers put in 4.3% fewer hours than they did before the health crisis.
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"When demand falls, it's a natural time to retool or invest, because you won't lose customers or sales while you tinker and shut things down," said Brad Hershbein, senior economist at the W.E. Upjohn Institute for Employment Research. "You don't want to interrupt business when it's at its peak."
The changes will require many workers to adapt. Though the job market is strong right now for highly paid professionals and low-wage service workers alike, not everyone can find a match for their skills, experience or location, creating a paradox of relatively high unemployment combined with record job openings. Economists said it can be a prolonged process for some laid-off workers to find jobs or acquire the skills needed for new careers.
In low-wage sectors such as hospitality and leisure, the push to cut staffing costs is driven partly by short-term labor shortages and expectations that wages will continue rising because of a combination of market forces and possible changes to local and federal laws.
The U.S. tax code encourages investments in automation, particularly after the Trump administration's tax cuts, said Daron Acemoglu, an economist at the Massachusetts Institute of Technology who studies the impact of automation on workers. Firms pay around 25 cents in taxes for every dollar they pay workers, compared with 5 cents for every dollar spent on machines because companies can write off capital investments, he said.
Given the expense and complexity of large automation projects, they aren't always the right solution for companies facing worker shortages or wanting to reduce costs, Acemoglu said. But there are a lot of piecemeal automation steps that companies can take that might be cost-effective, he added: "If you're going to try to completely revamp your factory, that's very expensive. But if you're a retailer, if you introduce 10 checkout kiosks, that's not very expensive."
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
