Memorial Day weekend – the unofficial kickoff to summer. If you’re like me, yours looks like a combination of work and play.
But this year, many Americans have had to postpone their usual summer planning. And many others are preparing to make do with less as states begin to revoke a federal unemployment benefit.
The worker shortage that some employers have been complaining about might get better as more people come off unemployment. Or it might not — with coronavirus cases in the U.S. the lowest they’ve been in a year and the economy picking up steam, workers might remain in short supply.
Here are three ways of looking at this summer’s labor outlook.
1. Kids these days — can they find jobs?
Teen participation in the labor market–much like their participation in family activities–has been waning since the 1950s. Nowadays, teenagers are more likely to fill their summers with extracurricular activities and internships. The quest for my teenager, a history buff, is a museum internship.
But this year, teenagers aged 16 through 19 have mounted an enthusiastic return to the labor market post-pandemic. Labor force participation among teens dropped to 30.7% as the lockdown began but has bounced to 37.2%, roughly 1 percentage point better than its pre-pandemic level.
Summer also is when new entrants to the world of work typically kick off their professional careers. But for young adults aged 20 through 24, labor participation still lags pre-pandemic levels.
The ADP Research Institute’s “People at Work” survey, which we conducted last winter, found that Gen Z workers aged 18 through 24 were the cohort hardest-hit by job losses, pay cuts, furloughs, reduced hours, and layoffs during the coronavirus pandemic.
The unemployment rate for Gen Z workers is still a bit above 10%. After a turbulent year, we’ll be watching to see if the newest entrants to the workforce come back this summer.
2. Is the great American road trip back?
For my family, summer means road trips. We’ve driven from the Redwoods to Yellowstone to Mississippi and many places in between. This summer, our hazel-eyed pooch, Lavender, is likely to make her inaugural summer road trip to Huntsville, Alabama, for a family reunion.
Summer travel is good for the economy. The more we engage in the economy in normal ways, by doing normal things like visiting relatives, the stronger and more sustainable the recovery becomes.
The U.S. still has a lot of ground to make up when it comes to our travel behavior. Recent data shows total vehicle miles traveled fell 13% in March from a year earlier. Airline miles traveled were down a staggering 53% in February, the most recent month available, from a year earlier.
Source: St. Louis Federal Reserve Economic Research
Moreover, would-be travelers might encounter unexpected hurdles to summer destinations. Travel staples like hotels and rental cars are in short supply after companies reduced their offerings when customer demand retreated last year. A lot of service providers have yet to return to normal operating capacity.
3. Will our vacation plans be enough to boost hiring?
Think about the ultimate family destination and Disney World or Disneyland probably come to mind. For Main Street’s young and young at heart, the theme parks can symbolize the pinnacle of summer fun.
We know leisure and hospitality has been hard-hit by the pandemic. Though this sector represented only 11% of total employment before the coronavirus, it suffered roughly 40% of the job losses, according to ADPRI employment data.
As of April, leisure and hospitality employment at Disney’s home base near Orlando is just two-thirds of its pre-pandemic level. And even with the backdrop of Hollywood attractions, leisure and hospitality employment in the Los-Angeles-Anaheim metro area, home to Disneyland, is down 25%.
Hiring at vacation destinations would boost not only local markets, but national economic resiliency overall.
For the more than 8 million workers still sidelined by the pandemic, summer plans might include finding work. This month, more than 20 states plan to end $300 in weekly federal benefits for unemployed workers, a response to employer complaints that they can’t find enough workers.
Nationally, the enhanced benefits, part of the American Rescue Plan that Congress passed in March, are scheduled to sunset at in September. While the benefits have been criticized as a deterrent to work, other factors such as increased family responsibility, a lack of affordable childcare, limited employment options, and health concerns could be weighing on individual decisions to rejoin the workforce or stay out.
We’re about to witness a real-life experiment. States may be revoking enhanced benefits before childcare facilities have resumed full capacity and while national vaccination rates remain short of levels needed for herd immunity. Even though this summer could be a real breakthrough for economic growth, there’s a chance that ending the benefits won’t make a dent in the labor shortage.