As the labor market recovers, the biggest factor keeping workers from getting jobs remains the pandemic itself. But rising wages could be what ultimately brings them back.
Three in 10 workers cited Covid-19 fears as a top reason for not urgently looking for a job, according to a Yahoo Finance/Harris Poll survey of 1,003 U.S. adults conducted October 22-25, 2021, while financial cushion and care responsibilities tied for second at 22%.
“Health and safety concerns are still number one on people's minds,” Elise Gould, senior economist at the Economic Policy Institute, told Yahoo Money. "More and more jobs are requiring showing up in person. That is still a major concern for many people who may live with vulnerable family members or have concerns about their own health.”
Understanding worker reluctance is key to getting the labor market back to its pre-pandemic levels. In October, the economy added 531,000 jobs, but that’s still 4.2 million short of where the economy was in February 2020.
‘That would be going away pretty quickly’
Many workers built a financial cushion during the pandemic — thanks to unprecedented government support — that so far has allowed them to be pickier when it comes to job choices. But that may soon be less of a factor, Gould said, as much of the pandemic relief has dried up.
“Many people have lost unemployment insurance,” she said. “Any savings families were able to hold on to, that would be going away pretty quickly.”
The last round of stimulus payments was sent out in April and the federal unemployment programs expired in early September. Since then, the savings rate has returned to pre-pandemic levels, reaching 7.5% in September, after being elevated during the pandemic.
Care responsibilities is another factor holding back workers, the Yahoo Finance/Harris Poll survey found. A similar survey of 5,000 people by Indeed found that more people cited care duties as a reason in October than in the summer.
Gould said child care closures could be a problem for some families, Gould said, along with unpredictable school schedules.
“There's more in-person schooling,” Nick Bunker, director of research at Indeed, told Yahoo Money. “But there's still some instability there with the fact that there are some kids at the quarantine.”
‘There does need to be higher wages to bring them in’
About 1 in 8 workers have given up on finding a job altogether, according to the survey.
More than half of adults (53%) who have searched for a new job in the past six months found the process to be difficult because they didn’t get responses to their application (36%), didn’t find their desired salary (36%), or couldn’t find the right role (30%).
Rising wages, though, may convince more workers to take jobs. Two-thirds of workers said a low salary is the main reason a job posting did not appeal to them, according to the Yahoo Finance/Harris Poll survey.
Overall wages have increased 4.9% in the last 12 months, with leisure and hospitality wages jumping 11.2%, according to the Labor Department.
“It's not as though people are just willing to jump back right in the labor market,” Bunker said. “There does need to be higher wages to bring them in.”
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova
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