Back to Normal?
Friday Dec 17th, 2021
- A lot of Baltimoreans lost jobs during the pandemic
- The jobs returned, but many didn’t go to Baltimoreans
- Mean wages of workers were higher throughout most of the pandemic
- Congress’s end of extended unemployment insurance meant many folks lost benefits and others had benefits reduced by $300 in September
- Unemployment insurance reductions likely led many of the unemployed to accept low wage jobs and enabled some employers to fill the same jobs with lower pay
The COVID-19 pandemic is far from over, and over 40% of the world has not received any vaccinations for COVID-19. However, many government operations have returned to business as usual; for example, the end of the COVID-19 State of Emergency, the rescission of pandemic unemployment insurance benefits, and the return of a fully operational evictions court suggest some confidence by policymakers that economic conditions for most of the labor force have recovered significantly since the early pandemic.
To explore this idea locally, the table below compares different workforce metrics for Baltimore City from February 2020, before the pandemic State of Emergency Declaration, and October 2021, the most recent available data from the Bureau of Labor Statistics.
|Metric for Baltimore City||Feb-20||Oct-21||Difference|
|Total Unemployed Population||13,367||19,201||↑ 44%|
|Total Employed Population||274,563||258,355||↓ 6%|
|Labor Force||287,930||277,556||↓ 4%|
|Total Jobs in Baltimore City |
|Average Weekly Wage |
Table 1: Comparison of workforce metrics for Baltimore City from February 2020 and October 2021. Numbers are not seasonally adjusted, except where otherwise noted. *Inflation adjustment based on Baltimore-Columbia-Towson MSA Consumer Price Index (CPI) as the BLS does not publish CPI figures for Baltimore City.
As shown, over 5,000 more Baltimore City job seekers were looking for work in October 2021 compared to February 2020, resulting in a Baltimore City unemployment rate that is 50% higher than it was before the pandemic. At the same time, the labor force declined by about 4%, potentially explained by early retirements facilitated by pandemic job losses, the continued trend of emigration from the city, and the increase in mortality rates during the pandemic from a stretched healthcare system (including the loss of over 1,300 Baltimore City friends and neighbors due to complications from COVID-19). Conversely, the number of jobs in Baltimore City is higher than it was before the pandemic. In fact, the number of jobs in Baltimore is higher than it has been since at least 2010.Table 1: Comparison of workforce metrics for Baltimore City from February 2020 and October 2021. Numbers are not seasonally adjusted, except where otherwise noted. *Inflation adjustment based on Baltimore-Columbia-Towson MSA Consumer Price Index (CPI) as the BLS does not publish CPI figures for Baltimore City.
How is it possible for unemployment to be significantly higher than it was with a shrinking labor force and a larger number of available jobs? It is likely that many Baltimoreans lost their jobs at the start of the pandemic. In addition, the residents of Baltimore City are not working many of the jobs that have come to the city since the beginning of the pandemic. Bureau of Labor Statistics data shows that, while Baltimore City has surpassed its pre-pandemic job numbers, the Baltimore-Columbia-Towson Metropolitan Statistical Area has 55,600 fewer seasonally adjusted jobs in October 2021 than it had in February 2020 (representing a 3.9% decrease in jobs). This could pressure non-city residents to compete with Baltimoreans for jobs in Baltimore City.
The average wage data above does suggest a return to pre-pandemic wages; however, the average inflation-adjusted wage of workers during the pandemic was trending higher than it had been since at least 2010. The plot at the top of the page shows wages peaking from April 2020 through the beginning of 2021. While a 7.1% inflationary increase in the Baltimore-Columbia-Towson MSA Consumer Price Index offset raw average wage increases, at its peak the increase in raw average wages was as high as 13.8% in January 2021, significantly higher than the total inflation since the pandemic started. Unfortunately, the peak in average raw wages in January was followed by a decline, with the largest drops being seen from May to June 2021 and September to October 2021.
It is not possible to predict with certainty the reason for the recent drops in average wages. Since these are average wages, the growth in these statistics may be in part due to many workers in industries that have traditionally low wages (i.e., hospitality) losing their jobs at the start of the pandemic. With fewer low-paying jobs to account for, averages naturally will go up. However, the drops in June 2021 and September 2021 also coincided with two major events related to the end of enhanced unemployment benefits in Maryland. In June, Governor Hogan announced the end of enhanced pandemic unemployment insurance for Maryland, and in September 2021 Congress's decision to not continue benefits meant official the end of expanded unemployment insurance in Maryland. Before the end of the program, these enhanced unemployment insurance benefits expanded eligibility criteria and increased the amount of support received by unemployed individuals by $300 per week, meaning more people got unemployment insurance and got more support from it. The existence of this safety net may have provided a lifeline for workers who choose not to take low-wage opportunities that did not pay competitive wages. The reduction in the scope and amount of unemployment insurance benefits likely led many unemployed people to accept low-wage jobs and enabled some employers to fill the same jobs with lower pay, as they no longer had to compete with increased unemployment benefits.
1 Based on data compiled by New York Times from Our World in Data
2 State of Maryland Executive Order 12-06-15-01
3 Analysis from the New School Schwartz Center for Economic Policy Analysis shows the retired share of the US population is about 2% higher than expected
4 Provisional CDC data suggests a 15.9% increase in mortality rates to 828.7 deaths per 100,000 population, which was especially true for Black Americans whose rates rose to 1,105.3 deaths per 100,000 population.