The COVID-19 pandemic and subsequent public health-related closures disrupted the workforce nationwide as millions of workers were suddenly unemployed or working remotely. As educators, businesses, and policymakers begin planning for the recovery, they must consider how work and employment in the state is likely to change and how those workers displaced by the pandemic can be best prepared to take advantage of the recovery. On October 29th, the Rockefeller Institute of Government convened a webinar, “Preparing the Workforce Development Infrastructure for Recovery.” The discussion brought together workforce development professionals to discuss how New York State can prepare employees to return to work after the COVID-19 public health emergency is over. The panel included three leading experts on workforce development in the state:
Panelists (in order of presentation):
- Lisette Nieves, president of the Fund for the City of New York and Nathan fellow at the Rockefeller Institute of Government
- Melinda Mack, executive director of the New York Association of Training and Employment Professionals
- Karen Coleman, deputy commissioner for workforce development and governor’s office advisor on workforce policy and innovation for the New York State Department of Labor (DOL)
This post presents three important points explored in the discussion. The first is how the employment impacts have been distributed across the workforce. It is important to understand what groups have been most affected so that response and programming can be effectively targeted. Next, we explore how the workforce development community is positioned to respond to the immediate job losses and also develop programs and policies that can address the inequities brought to light in the pandemic. Finally, we explore how New York State is positioning the response by the workforce development community and how the state is positioning itself to address the accelerated changes that have occurred as a result of the pandemic.
- The Employment Impacts of COVID-19 Were Not Evenly Distributed
Unemployment rates in New York State peaked at 16.0 percent in July 2020 and most recently fell to 9.4 percent in September 2020. There were 354,000 unemployed New Yorkers in February, 1.5 million in July, and 886,500 in September. While the situation is improving, the current unemployment rate is still 2.6 times higher than the September 2019 rate of 3.6 percent. The burden of job losses has not been felt equally across all regions or demographic groups.
New York City, the early hotspot of the COVID-19 pandemic, experienced its highest unemployment rate of 20.4 percent in June 2020. The most recent September data showed 13.9 percent of the city labor force unemployed. This is significantly higher than the rest of the state. The regions with the next highest unemployment rates were Western New York and Hudson Valley, each with 6.5 percent unemployment.
Lisette Nieves highlighted that job losses were acute for low-wage workers, in particular young workers, who she describes as bearing the brunt of the pandemic’s employment impacts. More than a quarter of young workers were unemployed in April 2020 following the implementation of local and state-level public health measures. This has been particularly driven by changes in the service and hospitality industries, sectors that employ a disproportionate number of young workers.
The lost wages of young workers have immediate negative impacts on their families and longer-term implications for their careers. Nieves cautioned against thinking that young workers are just earning “pocket money,” as many are, in fact, making important contributions to family economies. She also pointed out that job losses result in “disruptive pathways to success.” Many of the workers rely on their employment to finance education and have had to also take a break from schooling. These employment disruptions limit opportunities and create greater competition for young workers as they try to find career enhancing opportunities like internships. The longer-term impacts of the disruption remain to be seen.
There is also the hard reality that the COVID-19 recession has disproportionately impacted women. Over 865,000 women left the US workforce between August and September 2020, while only 216,000 men did so. Many of those women will not return to the labor market in the near future and the recession has been dubbed a “she-cession.” The trend is driven by two factors: the loss of service sector jobs and insufficient access to childcare. In July, almost a third of working-age women said they have left the workforce because of disruption to childcare arrangements. Even as jobs are added in the economy, many of these women are unable to return until schools and childcare providers reopen.
The experts agreed that the crisis has shined a light on inequities in the workforce and as a result brought more people to the table to work on solutions than ever before. Nieves says that it is important not to miss “the opportunity of disruption” to create targeted strategies for workforce development. Programs devised to help alleviate youth unemployment after the pandemic ends must consider the joint disruption of employment and education. Initiatives designed to assist women to re-enter the workforce must address the childcare challenges they face.
Grassroots community groups will be critical to developing successful COVID-19 recovery strategies, as these groups have a deep understanding of the challenges facing the populations they serve. These community-focused solutions will need to work in complement with state-level initiatives. The state and federal government will need to dedicate funding and resources to workforce innovation. New York State has a unique opportunity to be a leader in the US in developing policies to help workers through the economic recovery from COVID-19.
- Immediate and Long-Term Solutions Are Necessary
Workforce developers across the state have been proactive in preparing for the recovery. In September 2020, a taskforce of workforce and economic developers issued a report highlighting strategies New York State should consider as it reimagines workforce development policy to address pandemic related disruptions and longer standing issues related to inequality.
Melinda Mack, a key contributor to the strategy, noted that the economy was good before COVID-19, but “not great for everybody.” Prior to COVID-19, 45 percent of New Yorkers were considered working poor and 42 percent had a high school diploma or less. The workforce development community has identified some of the underlying challenges in helping people obtain the credentials needed to succeed in the labor market. Many New York workers face food and housing insecurity in addition to challenges in acquiring childcare—issues that need to be addressed in connection with employment opportunities.
When preparing for the COVID-19 recovery, the workforce development community must remember lessons learned after the Great Recession in 2008. Workforce stimulus funding can be significant and organizations must start preparing infrastructure now in order to be effective immediately. This includes identifying and systematizing what works and addressing parts of the system that need updating. Mack emphasized that it is important “not to be tempted by the shiny things” and avoid too much emphasis on any one emerging industry that often doesn’t have the capacity to use the funding effectively.
Recovery from the Great Recession was slow and this will likely be true for several sectors hurt in the COVID-19 downturn. Leaders in the hospitality industry, for example, are saying that the sector will not return to pre-COVID-19 strength until 2022. Policymakers and practitioners must be thoughtful about distributing resources to a combination of rapid attachment and longer-term programming that will help workers reskill and find new opportunities over the new few years.
One challenge facing workforce developers is uncertainty about funding. Most of the money invested in workforce development comes from the federal government. Federal stimulus will be required to invest in the job pipeline, think about how to get people ready for work, and reconsider the practices used in workforce development. The scale and timing of the funds are still unknown, however, making it hard for workforce developers to make programming and staffing decisions.
A theme central to New York’s recovery strategy has been reimagining. COVID-19 highlighted challenges and inequities in many areas including healthcare, education, housing, and employment. Now is an opportunity to rebuild systems that will address these underlying problems. In the field of workforce development, this means investments that improve the quality of jobs. Mack stressed that, in the long term, “we have to have better jobs in our state,” and identified several strategies for policymakers to consider.
Small businesses provide 50 percent of jobs in New York State and often serve as initial employment for vulnerable groups such as immigrants and the formerly incarcerated. Stabilization of the small business community though programs such as subsidization of wages and economic development incentives focused on quality jobs will be critical to maintaining and creating new employment opportunities across the state.
Mack also called for a comprehensive transformation of policies that impact the working poor in the state. Policy solutions could include a reconsideration of public benefits eligibility. Currently these supports have income cutoffs and end just as someone is beginning to get ahead, a phenomenon known as the “benefits cliff.” One way to address the opportunity gap for workers without degrees is to make it easier for workers to get credit for their education and experience. And finally, panelists noted the problem with unequal broadband access across the state. As educational opportunities, training, and employment all move further online, access to reliable internet is a necessity for all New Yorkers.
- COVID-19 Means Unprecedented Disruption and Accelerated Innovation
While the US has gone through recessions previously, the disruption from COVID-19 is not like most of those preceding events in that the current crisis affected workers across almost all industries. In previous recessions, job losses have been spread across a longer time period and generally centralized in a few sectors. This means that the policies used for recovery in the past will need to be rethought.
Karen Coleman noted that COVID-19 created new challenges and opportunities for innovation within the New York State Department of Labor (DOL). The dramatic increase in demand for assistance in the early days of the pandemic strained the department’s systems, which were not built to accommodate a sudden influx of 1.5 million workers seeking benefits. The system was further strained by a federal mandate to provide benefits to self-employed individuals, an important policy that brought critical assistance to these workers, but one for which the department’s systems were not designed. Consequently, DOL redeployed 1,000 employees who worked in workforce development to address unemployment claims.
In addition to the initial job losses, the disruption has accelerated other trends that impact the workforce. New York State has been a leader in automation in areas such as advanced manufacturing. Now automation is being integrated into a wider range of industries, particularly those that are people driven. Automation trends thought to be 10 to 20 years on the horizon will arrive sooner than anticipated and policymakers will have to grapple with understanding and addressing these trends through workforce development efforts.
Remote work is another trend that dramatically accelerated in the first weeks of the COVID-19 disruptions. Over a third of workers switched from commuting to their workplace to remote work by May in response to social distancing orders. The Bureau of Labor Statistics recently found that 37 percent of jobs can be done entirely from home, while 63 percent require workers to spend at least some time at their workplace. It is likely that the percentage of people working from home after the pandemic is over will be higher than the 10 percent in 2019.
Coleman noted that DOL itself was a pioneer with respect to its internal telework program before COVID-19. That program was rapidly expanded in March, as management in the department transitioned a greater portion of its workforce to a remote working environment. To meet the needs of clients, DOL made key services like teaching people how to write resumes available digitally, including on a mobile device, and is looking to launch virtual job fairs in the near future.
DOL also had to consider how to open job centers in a safe manner during the pandemic as there are still many jobs that require people to go to the workplace. For instance, McDonald’s has around 205,000 employees in nearly 14,000 restaurants and Amazon has 125,000 employees and operates 75 fulfillment centers across North America. There are 3.5 million truck drivers in the United States. Most workers in industries like hospitality, logistics, and transportation cannot do their jobs remotely, yet they are still impacted by COVID-19 and require assistance and additional training.
Trends and Next Steps
Key themes from the webinar included the acceleration of workforce trends brought on by the pandemic, the disproportionate impact of COVID-19 restrictions on low-wage workers, particularly young people, people of color, and women, and the challenge of people working while living in poverty. New York State has grassroots community organizations, workforce developers, and state agencies working to counter the effects of the pandemic on workers in New York, but the scale of the offerings depends heavily on the availability of federal stimulus funding.
Recent news about the progress of COVID-19 vaccines suggests that now is indeed the time to prepare for what comes after the pandemic. The outcome of the presidential election also suggests that the federal government may be more forthcoming with budgetary aid to state and local governments and take a more active role in helping people prepare for success in the labor market. The incoming administration has also committed to implementing a $15 per hour federal minimum wage, which would have a beneficial impact on low-wage workers, but that would need to get passed by Congress first. There are many challenges for the workforce ahead, but also reason for optimism.
ABOUT THE AUTHOR
Jason Russell is associate professor at SUNY Empire State College