The real number of jobs lost due to COVID
With all the news coverage of the jobs lost and recovered during the pandemic, a basic calculation has been missing. Typically, the purpose of jobs reporting is to focus on the drop in jobs for months in 2020 compared to the same month in 2019. And the recovery focuses on how many of the losses each month in 2020 have been recovered in 2021. While useful, these measures to not capture the real impact of COVID on jobs.
The correct way to measure the impact is to estimate the number of jobs in each month if the growth rate over the two years prior to COVID had been sustained. For the U.S., monthly data for private sector employment is available through July 2021. U.S. jobs grew 3.16 percent from July 2017 to July 2019. If, as a reasonable assumption that same two-year growth had continued, July 2021 employment would have been 132,365,000, a gain of 4,060,000 from 2019. The July 2021 level, as measured by the Bureau of Labor Statistics (BLS), was 3,538,000 below the July 2019 reading. Thus, in total, July 2021’s actual job count was 7,598,000 below the level it could have reached absent the pandemic. This despite the 6,758,000 growth in jobs compared to the July 2020 reading. Obviously, the measured shortfall from 2019 is an inadequate gauge of the pandemic effect because it fails to take into account the growth that could have occurred in 2020 if the COVID pandemic had not happened.
In Pennsylvania the most recent jobs data are for June 2021. The same calculations for the state as for the U.S. described above shows the June 2021 private jobs count to be 344,000 below the June 2019 level but up 311,000 from June 2020. Using the 2017 to 2019 growth rate to estimate the June 2021 level, if there had been no pandemic, puts the jobs count at 5,479,300—up by 124,000 for 2019. The BLS measured jobs for June 2021 stood at 5,011,000, a shortfall of 468,300 jobs compared to the no-pandemic estimate—the sum of the measured loss and the estimated gain. Again, the reason for the 468,300 shortfall is the absence of growth—and actual decline—in 2020.
The point is that while job counts are looking better in the U.S. and Pennsylvania compared to 2020, the true measure of the pandemic effect requires an estimate of what would have happened without the pandemic. And that results in huge shortfalls of jobs for the state and the nation.