Job growth in Georgia stalled last month, mired down by pandemic uncertainty that’s kept workers on the sidelines and customers out of shops and restaurants.
After robust hiring during the previous three months, the state’s overall economy shrunk by 500 jobs in August, according to the state Department of Labor. The job losses came in restaurants, hotels and retail — businesses that typically rely on in-person interactions.
“Growing concerns about catching COVID are making consumers more reluctant to resume their normal activities, which would include eating out,” said Mike Wald, former regional economist for the Bureau of Labor Statistics. “Hiring done in May, June and July was based on a full resumption of consumer pre-COVID behavior, and that is not happening.”
Before the pandemic, the state added an average of 6,700 jobs during the month of August. Summer’s end is typically a time of modest hiring as schools reopen and factories resume full production.
Last month, school jobs dipped, but factories were hiring and many white-collar jobs were filled.
The official unemployment rate edged down to 3.5% in August from 3.6% in July. However, that does not reflect thousands of people who worked pre-pandemic but haven’t returned to the labor force. Because they aren’t looking for jobs, they are no longer counted as unemployed, said Mark Butler, the state’s labor commissioner.
The state’s labor force is 31,000 smaller than it was when the pandemic began, Butler said.
Economists have been debating the reasons for the missing workforce for months.
For a time, government officials and some businesses blamed federal enhanced unemployment benefits for giving workers leverage. More people were turning down low-paying jobs. To entice workers, some businesses — including Amazon, Target and Walmart — raised pay and added incentives.
And in late June, Gov. Brian Kemp eliminated the benefits in Georgia. But the number of people in the labor force continued to lag.
Economist Tom Smith, from Emory’s Goizueta School of Business, said there are “probably a half-dozen reasons” for that.
More than anything else, the erratic pandemic — in its fourth wave in Georgia — has people concerned about what’s down the road, Smith said.
Some people are worried about contracting the virus, especially in jobs that require close interaction with the public, he said. Some are trying new types of work. Some are living with relatives or friends and don’t absolutely need the paycheck. “I don’t think there is a single narrative,” he said.
“I think we are being driven by the unknown,” Smith said. “And there’s a cohort of potential employees who are afraid, and they are thinking, maybe I should just wait until things get settled.”
According to Butler, a department survey shows that many jobseekers are afraid of COVID-19, but they also want better pay and benefits. And some employers say people are applying for jobs they aren’t qualified for.
“Based on what we are seeing, it may take months, if not years, for the job market to return to some type of normalcy,” he said. “There is no doubt there’s a mismatch in skills for the jobs available, we are hearing that from both employer and job seeker.”
Some workers want more flexibility to care for children or older relatives, a desire that might outlast the pandemic, Butler said. If employers and workers cannot find a way to bridge the gaps, the economy will suffer, the commissioner said.
Matt Heller said he’s had trouble hiring for 10 positions at Island Fin Poke, a soon-to-open restaurant in Peachtree City that he co-owns. The restaurant will primarily serve take-out, and the jobs pay up to $12 an hour, plus tips that should run between $3 and $10 an hour, he said.
“I am not that concerned about the pandemic, but the labor piece has been a challenge,” he said. “I’m having no problem getting high school kids wanting to work and excited to work. Everybody else, not so much.
“I get replies to the job postings, but then people don’t even show up for interviews.”
Georgia job growth or loss by sector in August
Administrative and Support Services: 3,500
Professional, Scientific, and Technical Services: 2,500
Non-Durable Goods Manufacturing: 1,000
Finance and Insurance: 800
Wholesale Trade: 700
Arts, Entertainment and Recreation: 500
Health Care and Social Assistance: 400
Accommodation and Food Services: -7,300
Retail Trade: -1,700
Specialty Trade Contractors: -1,500
Local Government: -1,000
Repair and Maintenance: -1,000.
Source: Georgia Department of Labor
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Georgia 2021 jobs (and average for the same month, pre-pandemic)
May: 14,100 (8,800)
June: 40,300 (7,400)
July: 36,100 (6,400)
August: -500 (6,700)
Sources: Georgia Department of Labor, Bureau of Labor Statistics
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Georgia economy compared to pre-pandemic
Jobs: -171,000
Number of people in labor force: -31,000
Sources: Georgia Department of Labor, Bureau of Labor Statistics
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