<mediadc-video-embed data-state="{"cms.site.owner":{"_ref":"00000161-3486-d333-a9e9-76c6fbf30000","_type":"00000161-3461-dd66-ab67-fd6b93390000"},"cms.content.publishDate":1666211143030,"cms.content.publishUser":{"_ref":"00000168-ed7d-d9d9-a9ec-ff7daffb0002","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"cms.content.updateDate":1666211143030,"cms.content.updateUser":{"_ref":"00000168-ed7d-d9d9-a9ec-ff7daffb0002","_type":"00000161-3461-dd66-ab67-fd6b933a0007"},"rawHtml":"
var _bp = _bp||[]; _bp.push({ "div": "Brid_66188500", "obj": {"id":"27789","width":"16","height":"9","video":"1121000"} }); ","_id":"00000183-f1ec-d791-abd3-fffd4fe70000","_type":"2f5a8339-a89a-3738-9cd2-3ddf0c8da574"}”>Video EmbedMore than a tenth of American workers say they will keep social distancing even after the coronavirus pandemic ends, placing a permanent drag on the workforce, new research has found.
Research conducted by three economists and circulated this week by the National Bureau of Economic Research concluded that more than 10% of those in the country with recent work experience will continue “long social distancing” indefinitely and an additional 45% said they will continue to social distance in limited ways. The study is based on a proprietary survey of thousands of working-age Americans with prior-year earnings since May 2020.
In other words, a significant portion of workers are staying home because they don’t want to get COVID-19 at the workplace or during their commute, and plan to do so forever. These individuals, who skew older and less educated, also appear to have permanently scaled back in their social lives to avoid infection.
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The paper, which has not yet undergone peer review, concluded that the persistent social distancing has lowered labor participation by about 2% and that it could continue to crimp the workforce for years.
“The whole pandemic experience appears to have made some people persistently more cautious in their social lives, and by that, I mean including their work lives,” said Steven Davis, one of the authors of the research and a professor at the University of Chicago’s business school. “We see that both in their expressed intentions to social distance but also when we ask certain people why they’re not working a chunk of them cite infection rates.”
“It’s not too surprising, in one sense, if you live through what is for many people, individually and socially, a traumatic experience associated with infection risks. It makes those risks more salient to people, they think about it more, and for some people it affects their behavior,” he added.
Less-educated people, who are less likely to work from home and more likely to use public transportation and thus more exposed to viruses, were more likely to drop out of the labor force.
Also of note, pandemic relief combined with less spending during the worst of the pandemic improved the finances of many households, which may have allowed more people to forgo work. The question now is whether those who are reluctant to work for fear of infection will be pushed back into the labor force as balance sheets return to normal.
The study has implications for the Federal Reserve’s efforts to lower inflation. It indicates that long social distancing is making it harder for businesses to find workers, thereby pushing up wages and adding to inflationary pressures. Help wanted signs still dot the windows of many storefronts, especially in sectors such as retail.
“If lots of less educated people were coming back to the labor force, there would be less pressure on wages and labor costs in the retail, and hospitality, and personal services sectors, and that would help to mitigate inflationary pressures,” Davis said.
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Davis said that he and his co-authors — Jose Maria Barrero of the Instituto Tecnologico Autonomo de Mexico and Nicholas Bloom of Stanford — were surprised at the magnitude of the effects of long social distancing on the labor force.
The economy is currently grappling with the Fed’s rate hikes but the labor market has proven more resilient than many economists anticipated. The economy notched 263,000 new jobs last month, according to the Bureau of Labor Statistics. Monthly job growth has averaged 420,000 so far in 2022, a strong pace at this stage of the cycle.
