Atlanta has weathered the economic disruption from the COVID-19 pandemic with greater resilience than Georgia and the country as a whole. For example, in April 2020, Atlanta’s unemployment rate spiked to 13.8 percent before falling to 5.0 percent in February of this year, below that of the country (6.7 percent).
However, these top-line unemployment statistics obscure the risk that Atlantans exiting the workforce could hinder long-term economic growth. McKinsey projections, developed in partnership with Oxford Economics, show that the Atlanta area is unlikely to return to pre-pandemic levels of employment before the second quarter of 2023. The pace of recovery is driven in part by a disproportionately slow recovery in employment for women, Hispanic and Black workers, and workers with lower incomes or levels of education.
While that disparity has troubling implications for economic equity in our city, it also has real economic consequences for all Atlantans. If specific segments of the population exit the workforce, that means less economic activity and less opportunity for everyone. Critical to ensuring continued economic growth and prosperity is ensuring all Atlantans who can work have the opportunity to do so.
Credit: contributed
Credit: contributed
More than 70,000 women in the Atlanta area lost their jobs or left the labor force from February 2020 to February 2021. Conversely, Atlanta’s male labor force has grown by more than 88,000 from February 2020 to February 2021. Women who have lost or left jobs because of the COVID-19 crisis face longer stretches without employment and could see their skills and careers atrophy. In addition, the burden of unpaid childcare has significantly increased during the pandemic and is carried disproportionately by women, creating a further disincentive for their return to work.
Credit: contributed
Credit: contributed
The impact on Black workers is especially concerning. Nationally during the pandemic, 39 percent of all jobs held by Black workers were threatened by reductions in hours or pay, temporary furloughs, or permanent layoffs, compared with 34 percent held by white workers. This translates to more than 400,000 jobs among Black workers in the Atlanta area. While overall unemployment rates have returned close to pre-pandemic levels across the city, trends for Black workers before the downturn were not positive. The Brookings Institution found the unemployment rate in 2019 for Black workers in Atlanta was nearly five times that of white workers.
These trends are likely to widen the existing economic racial divide in our city. According to a 2020 report from the Atlanta Wealth Building Initiative, Atlanta leads the country in income inequality and lack of economic mobility. The pandemic has the potential to reverse decades of progress toward an inclusive economy — and to slow the city’s growth in a way that all Atlantans may feel.
This trajectory is not set in stone, however. Targeted action can make a difference, including:
- Offer reskilling programs to prepare workers for jobs that are high growth and/or less vulnerable to automation – skills such as cybersecurity and information technology, skilled trades, and precision manufacturing. Atlanta has seen recent private sector investment — for example, Bank of America’s $1 million investment in 2020 in Atlanta Technical College jobs initiatives.
- Expand support, such as childcare, to facilitate the reentry of Atlanta parents into the labor force. As of August 2020, 40 percent of childcare centers across Georgia were closed; those that remain open operate with lower margins to account for smaller class sizes alongside the same fixed costs. Childcare providers need access to more assistance (access to capital, financial resources, advice) to remain open and provide affordable access to childcare.
- Provide financial support to enable students and workers to obtain the education and certifications required for jobs in the post-COVID-19 economy. For example, Georgia State University offers microgrants to cover small financial shortfalls that might otherwise prevent students from completing a degree program. Atlanta’s network of post-secondary education providers can learn from GSU’s playbook to support the realities of a post-COVID-19 workforce.
- Accelerate vaccine distribution efforts, engaging local channels to increase vaccine access and decrease vaccine hesitancy, ensuring all Atlantans remain safe as people return to in-person work and the city continues to open up in 2021.
- Invest in accessible transit infrastructure in Atlanta, which McKinsey’s past research found to be a factor in Atlanta’s uneven geographic distribution of prosperity. Accessible transit could increase access to opportunity and stimulate growth for the unemployed concentrated in historically and structurally impoverished neighborhoods.
Atlanta has an opportunity to make choices to increase economic activity and ensure access to opportunity for all Atlantans — making our economy more equitable, not less, in the post-pandemic recovery. Meeting the moment could have a real impact on growth prospects for all Atlantans, but there’s no time to waste.
André Dua is senior partner with global consulting firm McKinsey & Co. and a leader with the firm’s inclusive U.S. economy initiative. Steve Reis is managing partner for McKinsey’s Atlanta office.
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