IPC International Community magazine an association member publication
Issue link: https://iconnect007.uberflip.com/i/1488860
14 Post-pandemic Labor Force Dynamics By Shawn DuBravac, IPC Chief Economist It has been three years since the start of the pandemic- induced recession. After an abrupt, but short downturn, the economy—and especially the electronics industry—has experienced record growth. The economic recovery has had a pronounced impact on the labor market. As we enter 2023, there are several unique labor market dynamics to watch. Industry Employment Has Risen Sharply The COVID-induced recession of 2020 was one of the most severe economic downturns in U.S. history. Overall employment fell over 14%. Roughly one in every seven workers lost their jobs. Moreover, the peak-to-trough decline happened in about 60 days, an unprecedented rate. Prior to this downturn, the worst decline in employment was the decline during the financial crisis of 2007–09. Peak-to-trough decline in employment during that recession was 6.3%. Roughly one in every 16 people lost their jobs, but it took 26 months for the economy to reach that level so job loss was much slower during that downturn. During the COVID recession, the electronics manufac- turing sector held up much better than other segments of the economy. Employment fell about 3.5%, and the peak-to- trough decline happened over about 12 months. After an initial decline in employment corresponding with the early months of the pandemic and the uncertainty that followed, the U.S. electronics industry began to hire. In fact, the industry has added over 81,000 new jobs since that low point. The U.S. electronics manufacturing industry now employs over 1.7 million workers, sur- passing levels not seen since 2009. On the surface, the gains may not seem sig- nificant, but these gains follow decades of secular decline in employment. It remains to be seen whether job gains will continue at a similar clip in the year ahead. Industry employment gains in recent months have been rela- tively flat. The recent slowdown in hiring could be driven by several factors. First, demand for some durable goods cat- egories has slowed, especially among consumers who have shifted toward spending on services like dining out and travel, categories especially hard hit by the pandemic. The slowdown in hiring could also reflect the difficulty of hiring. Competition for Workers Is Strong Demand for workers is strong, even in the face of a slowdown in economic activity. Today there are over 10 million open jobs, about 750,000 of which are in manufacturing. At the same time, there are about six million people who are unemployed so there are nearly two job openings for every unemployed worker. 14 INDUSTRY INTELLIGENCE Chart 1: Industry employment gains.