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    They Relied on Chinese Vaccines. Now They’re Battling Outbreaks.

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    More than 90 countries are using Covid shots from China. Experts say recent infections in those places should serve as a cautionary tale in the global effort to fight the disease.Mongolia promised its people a “Covid-free summer.” Bahrain said there would be a “return to normal life.” The tiny island nation of the Seychelles aimed to jump-start its economy.All three put their faith, at least in part, in easily accessible Chinese-made vaccines, which would allow them to roll out ambitious inoculation programs when much of the world was going without.But instead of freedom from the coronavirus, all three countries are now battling a surge in infections.China kicked off its vaccine diplomacy campaign last year by pledging to provide a shot that would be safe and effective at preventing severe cases of Covid-19. Less certain at the time was how successful it and other vaccines would be at curbing transmission.Now, examples from several countries suggest that the Chinese vaccines may not be very effective at preventing the spread of the virus, particularly the new variants. The experiences of those countries lay bare a harsh reality facing a postpandemic world: The degree of recovery may depend on which vaccines governments give to their people.In the Seychelles, Chile, Bahrain and Mongolia, 50 to 68 percent of the populations have been fully inoculated, outpacing the United States, according to Our World in Data, a data tracking project. All four ranked among the top 10 countries with the worst Covid outbreaks as recently as last week, according to data from The New York Times. And all four are mostly using shots made by two Chinese vaccine makers, Sinopharm and Sinovac Biotech.“If the vaccines are sufficiently good, we should not see this pattern,” said Jin Dongyan, a virologist at the University of Hong Kong. “The Chinese have a responsibility to remedy this.” A vaccination on Chiloé Island, Chile. In Chile, the Seychelles, Bahrain and Mongolia, 50 to 68 percent of the populations have been fully vaccinated.Alvaro Vidal/Agence France-Presse — Getty ImagesScientists don’t know for certain why some countries with relatively high inoculation rates are suffering new outbreaks. Variants, social controls that are eased too quickly and careless behavior after only the first of a two-shot regimen are possibilities. But the breakthrough infections could have lasting consequences.In the United States, about 45 percent of the population is fully vaccinated, mostly with doses made by Pfizer-BioNTech and Moderna. Cases have dropped 94 percent over six months.Israel provided shots from Pfizer and has the second-highest vaccination rate in the world, after the Seychelles. The number of new daily confirmed Covid-19 cases per million in Israel is now around 4.95.In the Seychelles, which relied mostly on Sinopharm, that number is more than 716 cases per million.Disparities such as these could create a world in which three types of countries emerge from the pandemic — the wealthy nations that used their resources to secure Pfizer-BioNTech and Moderna shots, the poorer countries that are far away from immunizing a majority of citizens, and then those that are fully inoculated but only partly protected.China, as well as the more than 90 nations that have received the Chinese shots, may end up in the third group, contending with rolling lockdowns, testing and limits on day-to-day life for months or years to come. Economies could remain held back. And as more citizens question the efficacy of Chinese doses, persuading unvaccinated people to line up for shots may also become more difficult.One month after receiving his second dose of Sinopharm, Otgonjargal Baatar fell ill and tested positive for Covid-19. Mr. Otgonjargal, a 31-year-old miner, spent nine days in a hospital in Ulaanbaatar, the capital of Mongolia. He said he was now questioning the usefulness of the shot.“People were convinced that if we were vaccinated, the summer will be free of Covid,” he said. “Now it turns out that it’s not true.”Xi Jinping, China’s leader, pledged to deliver a Chinese vaccine that could be easily stored and transported to millions of people around the world. He called it a “global public good.”Andrea Verdelli/Getty ImagesBeijing saw its vaccine diplomacy as an opportunity to emerge from the pandemic as a more influential global power. China’s top leader, Xi Jinping, pledged to deliver a Chinese shot that could be easily stored and transported to millions of people around the world. He called it a “global public good.”Mongolia was a beneficiary, jumping at the chance to score millions of Sinopharm shots. The small country quickly rolled out an inoculation program and eased restrictions. It has now vaccinated 52 percent of its population. But on Sunday, it recorded 2,400 new infections, a quadrupling from a month before.In a statement, China’s Foreign Ministry said it did not see a link between the recent outbreaks and its vaccines. It cited the World Health Organization as saying that vaccination rates in certain countries had not reached sufficient levels to prevent outbreaks, and that countries needed to continue to maintain controls.“Relevant reports and data also show that many countries that use Chinese-made vaccines have expressed that they are safe and reliable, and have played a good role in their epidemic prevention efforts,” the ministry said. China has also emphasized that its vaccines target severe disease rather than transmission.No vaccine fully prevents transmission, and people can still fall ill after being inoculated, but the relatively low efficacy rates of Chinese shots have been identified as a possible cause of the recent outbreaks.The Pfizer-BioNTech and Moderna vaccines have efficacy rates of more than 90 percent. A variety of other vaccines — including AstraZeneca and Johnson & Johnson — have efficacy rates of around 70 percent. The Sinopharm vaccine developed with the Beijing Institute of Biological Products has an efficacy rate of 78.1 percent; the Sinovac vaccine has an efficacy rate of 51 percent.The Chinese companies have not released much clinical data to show how their vaccines work at preventing transmission. On Monday, Shao Yiming, an epidemiologist with the Chinese Center for Disease Control and Prevention, said China needed to fully vaccinate 80 to 85 percent of its population to achieve herd immunity, revising a previous official estimate of 70 percent.Data on breakthrough infections has not been made available, either, though a Sinovac study out of Chile showed that the vaccine was less effective than those from Pfizer-BioNTech and Moderna at preventing infection among vaccinated individuals.A representative from Sinopharm hung up the phone when reached for comment. Sinovac did not respond to a request for comment.William Schaffner, medical director of the National Foundation for Infectious Diseases at Vanderbilt University, said the efficacy rates of Chinese shots could be low enough “to sustain some transmission, as well as create illness of a substantial amount in the highly vaccinated population, even though it keeps people largely out of the hospital.”Mongolia now ranks among the top countries that have fully vaccinated its population, inoculating about 52 percent of its people. But on Sunday, it recorded 2,400 new infections, quadrupling from a month before.Khasar Sandag for The New York TimesDespite the spike in cases, officials in both the Seychelles and Mongolia have defended Sinopharm, saying it is effective in preventing severe cases of the disease.Batbayar Ochirbat, head researcher of the Scientific Advisory Group for Emergencies at Mongolia’s Ministry of Health, said Mongolia had made the right decision to go with the Chinese-made shot, in part because it had helped keep the mortality rate low in the country. Data from Mongolia showed that the Sinopharm vaccine was actually more protective than the doses developed by AstraZeneca and Sputnik, a Russian vaccine, according to the Health Ministry.The reason for the surge in Mongolia, Mr. Batbayar said, is that the country reopened too quickly, and many people believed they were protected after only one dose.“I think you could say Mongolians celebrated too early,” he said. “My advice is the celebrations should start after the full vaccinations, so this is the lesson learned. There was too much confidence.”Some health officials and scientists are less confident.Nikolai Petrovsky, a professor at the College of Medicine and Public Health at Flinders University in Australia, said that with all of the evidence, it would be reasonable to assume the Sinopharm vaccine had minimal effect on curbing transmission. A major risk with the Chinese inoculation is that vaccinated people may have few or no symptoms and still spread the virus to others, he said.“I think that this complexity has been lost on most decision makers around the world.”In Indonesia, where a new variant is spreading, more than 350 doctors and health care workers recently came down with Covid-19 despite being fully vaccinated with Sinovac, according to the risk mitigation team of the Indonesian Medical Association. Across the country, 61 doctors died between February and June 7. Ten of them had taken the Chinese-made vaccine, the association said.The numbers were enough to make Kenneth Mak, Singapore’s director of medical services, question the use of Sinovac. “It’s not a problem associated with Pfizer,” Mr. Mak said at a news conference on Friday. “This is actually a problem associated with the Sinovac vaccine.”Bahrain and the United Arab Emirates were the first two countries to approve the Sinopharm shot, even before late-stage clinical trial data was released. Since then, there have been extensive reports of vaccinated people falling ill in both countries. In a statement, the Bahraini government’s media office said the kingdom’s vaccine rollout had been “efficient and successful to date.”Still, last month officials from Bahrain and the United Arab Emirates announced that they would offer a third booster shot. The choices: Pfizer or more Sinopharm.Reporting was contributed by Khaliun Bayartsogt, More

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    'I Quit My Job' Is a Signal of Economic Recovery

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    With new opportunities and a different perspective as the pandemic eases, workers are choosing to leave their jobs in record numbers.At some point early this year, Justin Hoffman concluded that he was being underpaid.The marketing director at an orthopedic practice in Findlay, Ohio, Mr. Hoffman was making $42,000 a year — about $13,000 less, by his count, than people were making in similar jobs elsewhere.But when he asked for a raise in March, he was given only a small bump in pay. “That was kind of the straw that broke the camel’s back,” he said.So after some careful thinking, Mr. Hoffman, 28, did what he had long ached to do: He quit. His last day was June 4.Mr. Hoffman is among millions of workers who have voluntarily left their jobs recently, one of the most striking elements of the newly blazing-hot job market. According to the Labor Department, nearly four million people quit their jobs in April, the most on record, pushing the rate to 2.7 percent of those employed.The rate was particularly high in the leisure and hospitality industry, where competition for workers has been especially fierce. But the number of those quitting registered across the board.Economists believe that one reason more workers are quitting is simply a backlog: By some estimates, more than five million fewer people quit last year than would otherwise be expected, as some workers, riding out the labor market’s convulsions, stuck with jobs they may have wanted to leave anyway. (And the millions of involuntary job losses during the pandemic surely accounted for some of the reduction in quitting.) Now that the economy is regaining its footing, workers may suddenly be feeling more emboldened to heed their impulses.But another factor may be the speed with which the economy has reawakened. As the pandemic has receded and the great reopening has swept across the country, businesses that had gone into hibernation or curtailed their work force during the pandemic have raced to hire employees to meet the surging demand.At the same time, many people remain reluctant to return to work because of lingering fears of the virus, child care or elder care challenges, still-generous unemployment benefits, low wages or other reasons.The result has been an explosion of job openings, despite a relatively high unemployment rate, as businesses struggle to recruit and retain employees — a dynamic that has placed power more firmly in workers’ hands. With employers offering higher wages to attract candidates, many workers — especially in low-wage positions in restaurants and hotels — are leaving their jobs and jumping to ones that pay even slightly more.“There’s a lot of churn in low-wage jobs where people don’t really have a career progression,” said Julia Pollak, a labor economist at ZipRecruiter. “If you find a job that offers just marginally more, there’s no cost to you in switching.”More than 740,000 workers quit jobs in leisure and hospitality in April, the Labor Department said, for a rate of 5.3 percent. A vast majority were in accommodation and food service.The pandemic has driven workers to quit for other reasons as well. With fewer opportunities for spending, some people were able to save money and pay down their debts, giving them a cushion to leave jobs with which they were dissatisfied. Other workers, disinclined to give up remote work, are abandoning jobs that are no longer affording them as much flexibility.For Mr. Hoffman, the decision to leave his job was the culmination of months of perceived injustices, which he said he was able to evaluate more clearly because of the pandemic.As coronavirus cases swelled in the fall, he asked to work from home because of the risk he feared he posed to his sister, whose immune system is compromised. His request was denied, he said, crystallizing his sense that he was not respected or valued.Over the last year, with the pandemic limiting his social interactions, he began to network over Twitter with other people in marketing. That was how he determined that he was being significantly underpaid.Mr. Hoffman, who is now looking for work, said he probably would have quit eventually. But the pandemic, he said, hastened his decision.“I think that if the pandemic hadn’t happened, then things wouldn’t have turned out this way,” he said. “It didn’t just change my perspective on my compensation, but I think it’s changed a lot about my understanding of the relationship between employers and employees.”A restaurant in Louisville, Ky., advertised it was hiring. More than 740,000 workers quit jobs in leisure and hospitality in April, the Labor Department said.Amira Karaoud/ReutersOn a more philosophical level, the constant threat of illness, more time with family members, leisure time that gave way to new passions — all may have prompted some workers to reassess how they want to spend their time. Burned out, some people have left their jobs for once-in-a-lifetime experiences, like traveling the world. Others have seen an opportunity to shift careers or branch out on their own.Start-ups surged during the pandemic, particularly in Black communities, as stimulus checks and unemployment benefits helped seed entrepreneurs’ dreams and bolster their confidence.“The pandemic, for a lot of people, was really stressful and caused a lot of uncertainty, so I think what a lot of people did was reflect on their lives,” said Anthony Klotz, an associate professor of management at Texas A&M University who studies employee resignations.Dr. Klotz said people were accustomed to work being at the center of their lives and identities — a reality that may have shifted during the pandemic.“In general, we want a life of contentment and a life that has purpose,” he said. “And I think for many people, they’ve discovered that contentment and purpose for them may lie outside of work.”That was the case for Matt Gisin, 24, who gave notice at his job as a graphic designer at a health and wellness company this month. During the pandemic, he was able to work remotely, and without a commute, he had more time for hobbies like CrossFit and video game streaming.“I got very adjusted to all of this time and all of this freedom,” he said.But slowly, his company began requiring employees to come back into the office, first for two days a week, then three, then four. With so many people commuting to work in their cars, his trip from his home in Mamaroneck, N.Y., to the middle of Long Island could stretch to two hours each way, leaving him little time for his pastimes.“I wasn’t happy anymore,” he said. “I was finding happiness in a lot of outside activities so I took this kind of leap to leave.” He now hopes to find a job in the video game industry.Economists expect the elevated level of quitting to continue for some time, as the pandemic eases and the economy rebalances.“I would be surprised if this ended before the summer ended,” said Andrew Chamberlain, the chief economist for the hiring site Glassdoor. But he also said there was an “expiration date”: A high number of workers quitting will contribute to a labor shortage, eventually forcing employers to raise wages and provide other incentives, which will help lure workers back and re-establish economic equilibrium.In the meantime, he said, workers — especially those with low wages — will continue to gain leverage over employers.“The longer these shortages persist, the more bargaining power you put into the hands of very low-skilled workers,” he said. “There is some evidence that employers are moving in response, and that’s unusual.” More

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    The Economic Gauges Are Going Nuts. Jerome Powell Is Taking a Longer View.

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    Despite the current confusion, his outlook, based on hard lessons from the 2010s, is essentially optimistic.Jerome Powell, the Federal Reserve chair, made clear that he believes the fundamentals of the economy are stable, even though the pandemic has thrown it for a loop.Eric Baradat/Agence France-Presse — Getty ImagesThe economy is changing so fast that just making sense of it is no easy task. Within a few months, the United States has gone from no jobs and depressed prices to widespread labor shortages and uncomfortably high inflation.In this most unusual recovery, the signals that economic policymakers use to inform their decisions are going haywire. What is one to make, for example, of the combination of strong growth in jobs and wages paired with millions of working-age people who seem to have no interest in returning to the work force?It’s easy to imagine Jerome Powell, the Federal Reserve chair, as a pilot in unfamiliar territory with malfunctioning gauges. He’s doing what you’d want a pilot to do in those circumstances: looking to the horizon.A recurring theme on Wednesday, as he spoke to the news media after a Fed policy meeting, was his focus on the things that haven’t changed about the economy, the lessons learned in the expansion of the 2010s. He is resisting the urge to conclude that the pandemic fundamentally changed the most important dynamics.To Mr. Powell’s mind, these are those lessons: American workers are capable of great things. The labor market can run hotter for longer than a lot of economists once assumed, with widely beneficial results. There are many powerful structural forces that will keep inflation in check. And for those reasons, the Fed should move cautiously in raising interest rates, rather than risk choking off a full economic recovery too soon.His is a profoundly optimistic view of the coming years. He does not see the labor shortages of 2021 as evidence of lasting scars to the potential of American workers, but rather as a reflection of the difficulty of reopening large sectors of the economy and reallocating labor after a pandemic.“You look through the current time frame and look one and two years out — we’re going to be looking at a very, very strong labor market,” Mr. Powell said, describing an environment of low unemployment, high rates of participation and “rising wages for people across the spectrum.”And he was dismissive of the possibility that spikes in both wages and prices would turn into a lasting 1970s-style spiral.“Is there a risk that inflation will be higher than we think? Yes,” Mr. Powell said. “We don’t have any certainty about the timing or the extent of these effects from reopening.”But he added: “We think it’s unlikely they would materially affect the underlying inflation dynamics that the economy has had for a quarter of a century. The underlying forces that have created those dynamics are intact.” These include globalization and an aging world population.If you squint, you can even see the application of lessons from three big missteps in Mr. Powell’s career as a central banker.In 2013, as a Fed governor, he helped push Chair Ben Bernanke toward “tapering” the pace of bond-buying in the Fed’s quantitative easing program, which created global financial tremors and led the central bank to reverse course. (In one sign of how deep the scars of that experience are, Mr. Powell carefully said on Wednesday that at this meeting, they merely talked about talking about tapering their current Q.E. purchases, which was itself a subtle shift from his previous guidance that it was not yet time to talk about talking about tapering.)In 2015, Mr. Powell supported a decision to begin raising interest rates to prevent inflation from taking off. This also caused global economic problems — and an under-the-radar economic slowdown in the United States — even though with hindsight the American job market had lots of remaining potential to improve.And in 2018, under his leadership, the Fed raised interest rates four times despite an absence of inflationary pressure. The last of these, especially, came to look like a mistake within days, and Mr. Powell soon reversed course.At each of those junctures, the people who argued that the American labor market was already at or near its potential — a fundamentally pessimistic view about the number of people who could be coaxed to work by the right mix of compensation and job opportunities — looked with hindsight to be wrong. So were the people who routinely predicted that an outburst of problematic inflation was right around the corner.The risk with this approach is that Mr. Powell is, in effect, fighting the last battle — applying the lessons of those episodes to a different economic environment.There are, after all, quite a few differences between then and now. Most significantly, fiscal policymakers have acted on a much larger scale now, and the trillions of dollars coursing through the economy surely create different types of inflation risks. All else being equal, looser fiscal policy — larger continuing deficits — implies that tighter monetary policy is needed to keep a lid on inflation.Moreover, there are some signs — early, but striking — of a more lasting change in the power dynamics between capital and labor. Workers appear to have the upper hand with employers in ways they haven’t in a generation.This could turn out to be a temporary result of the post-pandemic moment, and is mostly positive (Mr. Powell explicitly characterizes higher wages and more expansive job opportunities as a good thing). But if we are returning to a more 1960s-style dynamic in which workers demand pay that is higher than productivity gains would imply are justified, and employers readily give it to them and raise their prices, it will mean that Mr. Powell’s Fed is on track to get behind the curve on inflation.Ultimately, then, the question of whether the Fed is on a wise course will depend on whether the pandemic fundamentally changed things, or just created a miserable year for the economy, after which things return to normal.One trait Mr. Powell has shown, including in the 2013, 2015 and 2018 episodes, is a willingness to pivot when evidence emerges that his judgment is wrong. The best hope for the economy of the 2020s is that his pilot’s view of the horizon is correct. The second best is that if it turns out to be wrong, he adjusts quickly. More

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    The Recession Isn’t Over Till They Say It’s Over. (But Who Are They?)

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    The contraction in the U.S. seemed to end quickly in April 2020, but the committee charged with determining an endpoint has been quiet.One year ago, a committee of economists declared that the pandemic had officially caused the United States to fall into a recession. So is it over yet?It might seem a simple question — and yet the committee still doesn’t have an answer. That’s because it’s more of a head-scratcher than it might seem. And the issue raises some other weird questions, like: What is a recession?Let’s back up. America’s semiofficial arbiter of these things is a committee of the National Bureau of Economic Research, a private organization based in Cambridge, Mass. It’s called the Business Cycle Dating Committee, and it consists of eight esteemed academics who specialize in macroeconomics and business cycles.Their definition of a recession has been “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”Economists like those on the committee use the term recession to refer only to the period in which economic activity is contracting, not to the entire period of bad economic times. That’s why the previous recession was ruled to have technically ended in June 2009, even though the economy still felt terrible to people during the sluggish recovery that followed.Which brings us to the pandemic recession. There’s little argument that economic activity peaked in February 2020 and contracted in March 2020. The United States went through a period of rapidly collapsing economic activity with no modern precedent. Travel-related industries were most heavily affected, but sectors as varied as manufacturing, retail, construction and health care also took a hit.“Significant decline in economic activity.” Check. “Spread across the economy.” Check. Ah, but now consider “lasts more than a few months” — what about that?It now looks as if economic activity bottomed out sometime in April, maybe six weeks or so after the February peak. The committee says it weights two monthly data series particularly heavily: personal income excluding government transfers, and payroll employment. Both of these were higher in May than in April, providing evidence that April was the trough.That’s not to say that the economy was in very good shape for the remainder of 2020. The personal income measure surpassed its prepandemic level only last month, and employment is still well below prepandemic levels. But the direction of change has now been positive for more than a year.Robert Hall, the Stanford economist who chairs the committee, declined to comment Thursday on when a ruling on the recession end date might come. But let’s imagine that the end date winds up being April. If the economic peak of the previous expansion was February 2020 and the trough of the recession was April 2020, then it really lasted only two months. Or even less, if you believe the rebound actually started in mid-April.Two months are not “more than a few months.” The previous shortest recession on record was the one that began in January 1980 and lasted six months.In effect, the committee’s judgment is that even if the pandemic recession did not fit the usual definition of a recession, it still was one.In its own words: “In the case of the February 2020 peak in economic activity, we concluded that the drop in activity had been so great and so widely diffused throughout the economy that the downturn should be classified as a recession even if it proved to be quite brief.”Professor Hall declined to comment beyond that, saying that further elaboration on the jointly approved written comments would need to be approved by the committee.But it’s easy to imagine why the committee ended up with that conclusion. It would be awfully pedantic to refuse to classify an enormous economic contraction as a recession just because it didn’t fit a somewhat vague definition that a few economists had written down.“I think way back in March of 2020 there was a question of: ‘Should we call this a recession?’” said Tara Sinclair, an economist at George Washington University who studies business cycles. “Or if this is something that is going to last a few weeks, then the economy bounces right back, should it be treated as a recession or as the equivalent of a natural disaster?”Waiting to call an endpoint made sense, she said, as the committee was watching for evidence of a second wave of virus outbreak that might cause the economy to tumble again. In fact, a wave of infections in the fall dragged down employment numbers for a single month, but by most evidence it did not cause a broad or sustained contraction in economic activity.But “at this point, they are taking a particularly long time to call a particularly clear trough,” Professor Sinclair said.There’s one more wrinkle that shows how the pandemic recession is a weird one. Another common definition of recession, used especially widely outside the United States, is two straight quarters of contraction in G.D.P.Even though the actual economic contraction lasted only a few weeks in early 2020, it appears in the G.D.P. tables as having stretched over two quarters. The economy was shutting down in mid-March severely enough to cause the economy to shrink at a 5 percent annual rate in the first quarter that ended March 31.Then the continued collapse of the economy into early April meant that the second quarter, which began April 1, recorded a further 31 percent rate of shrinkage. If the pandemic had started at the beginning of a quarter rather than the end, the data would most likely have shown only a single quarter of declining G.D.P.The exact start date and end date aren’t of great importance, of course, unless you’re a chart maker focused on where the gray bars should go in an economic data visualization, or a politician looking for talking points on the campaign trail. What matters for people is how long and how severe the bad times turn out to be.But if nothing else, what appears likely to be the shortest recession on record shows just how odd the pandemic economy has really been. More

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    Workers Are Gaining Leverage Over Employers Right Before Our Eyes

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    “Employers are becoming much more cognizant that yes, it’s about money, but also about quality of life.”The relationship between American businesses and their employees is undergoing a profound shift: For the first time in a generation, workers are gaining the upper hand.The change is broader than the pandemic-related signing bonuses at fast-food places. Up and down the wage scale, companies are becoming more willing to pay a little more, to train workers, to take chances on people without traditional qualifications, and to show greater flexibility in where and how people work.The erosion of employer power began during the low-unemployment years leading up to the pandemic and, given demographic trends, could persist for years.March had a record number of open positions, according to federal data that goes back to 2000, and workers were voluntarily leaving their jobs at a rate that matches its historical high. Burning Glass Technologies, a firm that analyzes millions of job listings a day, found that the share of postings that say “no experience necessary” is up two-thirds over 2019 levels, while the share of those promising a starting bonus has doubled.People are demanding more money to take a new job. The “reservation wage,” as economists call the minimum compensation workers would require, was 19 percent higher for those without a college degree in March than in November 2019, a jump of nearly $10,000 a year, according to a survey by the Federal Reserve Bank of New York.Employers are feeling it: A survey of human resources executives from large companies conducted in April by the Conference Board, a research group, found that 49 percent of organizations with a mostly blue-collar work force found it hard to retain workers, up from 30 percent before the pandemic.“Companies are going to have to work harder to attract and retain talent,” said Karen Fichuk, who as chief executive of the giant staffing company Randstad North America closely tracks supply and demand for labor. “We think it’s a bit of a historic moment for the American labor force.”This recalibration between worker and employer partly reflects a strange moment in the economy. It’s reopening, but many would-be workers are not ready to return to the job.Yet in key respects, the shift builds on changes already underway in the tight labor market preceding the pandemic, when the unemployment rate was 4 percent or lower for two straight years.That follows decades in which union power declined, unemployment was frequently high and employers made an art out of shifting work toward contract and gig arrangements that favored their interests over those of their employees. It would take years of change to undo those cumulative effects.But the demographic picture is not becoming any more favorable for employers eager to fill positions. Population growth for Americans between ages 20 and 64 turned negative last year for the first time in the nation’s history. The Congressional Budget Office projects that the potential labor force will grow a mere 0.3 to 0.4 percent annually for the remainder of the 2020s; the size of the work force rose an average of 0.8 percent a year from 2000 to 2020.An important question for the overall economy is whether employers will be able to create conditions attractive enough to coax back in some of the millions of working-age adults not currently part of the labor force. Depending on your view of the causes, the end of expanded pandemic-era jobless benefits might have an effect too. Some businesses may need to raise prices or retool how they operate; others may be forced to close entirely.Higher wages are part of the story. The jobs report issued on Friday showed that average hourly earnings for nonmanagerial workers were 1.3 percent higher in May than two months earlier. Other than in a brief period of statistical distortions early in the pandemic, that is the strongest two-month gain since 1983.But wages alone aren’t enough, and firms seem to be finding it in their own best interest to seek out workers across all strata of society, to the benefit of people who have missed out on opportunity in the last few decades.“I’ve been doing this a long time and have never felt more excited and more optimistic about the level of creative investment on this issue,” said Bertina Ceccarelli, chief executive of NPower, a nonprofit aimed at helping military veterans and disadvantaged young adults start tech industry careers. “It’s an explosive moment right now.”In effect, an entire generation of managers that came of age in an era of abundant workers is being forced to learn how to operate amid labor scarcity. That means different things for different companies and workers — and often involves strategies more elaborate than simply paying a signing bonus or a higher hourly wage.At the high end of the labor market, that can mean workers are more emboldened to leave a job if employers are insufficiently flexible on issues like working from home.It also means companies thinking more expansively about who is qualified for a job in the first place. That is evident, for example, in the way Alex Lorick, a former South Florida nightclub bouncer, was able to become a mainframe technician at I.B.M.Mr. Lorick often worked a shift called “devil’s nine to five” — 9 p.m. to 5 a.m. — made all the more brutal when it was interspersed with day shifts. The hours were tough, but the pay was better than in his previous jobs, one at a retirement home and another serving food at a dog track. Yet it was a far cry from the type of work he had dreamed about in high school, when he liked computers and imagined making video games for a living.As a young adult, he took online classes in web development and programming languages, but encountered a Catch-22 many job seekers know well: Nobody wanted to hire a tech worker without experience, which meant he couldn’t get enough experience to be hired. College wasn’t for him. Hence the devil’s nine to five.Until late last year, that is. After months on unemployment during the pandemic, he heard from I.B.M., where he had once applied and been rejected for a tech job. It invited him to apply to an apprenticeship program that would pay him to be trained as a mainframe technician. Now 24, he completed his training this month and is beginning hands-on work in what he hopes is the start of a long career.“This is a way more stable paycheck, and more consistent hours,” Mr. Lorick said. “But the most important thing is that I feel like I’m on a path that makes sense and where I have the opportunity to grow.”Before Adquena Faine began an I.B.M. apprenticeship to become a cloud storage engineer, she was driving for ride-hailing services to support herself and her daughter, dealing with the erratic income and sore back that came with it.“I really hate driving now,” she said. “I could feel the car vibrating even when I wasn’t in the car.”She had attended but not completed college, and served in the Air Force, but the information technology industry was new to her.“They were confident they could teach me what I needed to know,” she said. “It was intense, but I didn’t want to let myself down or my baby girl down.”The hiring of Ms. Faine and Mr. Lorick was part of a deliberate effort by I.B.M. to rethink how it hires and what counts as a qualification for a given job.The apprenticeship program began in 2017, and thousands of people have moved through that and similar programs. Executives concluded that the qualifications for many jobs were unnecessarily demanding. Postings might require applicants to have a bachelor’s degree, for example, in jobs that a six-month training course would adequately prepare a person for.“By creating your own dumb barriers, you’re actually making your job in the search for talent harder,” said Obed Louissaint, I.B.M.’s senior vice president for transformation and culture. In working with managers across the company on training initiatives like the one under which Mr. Lorick was hired, “it’s about making managers more accountable for mentoring, developing and building talent versus buying talent.”“I think something fundamental is changing, and it’s been happening for a while, but now it’s accelerating,” Mr. Louissaint said.Efforts like the one at I.B.M. are, to some degree, a rediscovery in the value of investing in workers.“I do think companies need to relearn some things,” said Byron Auguste, chief executive of Opportunity at Work, an organization devoted to encouraging job opportunities for people from all backgrounds. “A lot of companies, after the recessions in 2001 and 2008, dismantled their onboarding and training infrastructure and said that’s a cost we can’t afford.“But it turns out, you actually do need to develop your own workers and can’t just depend on hiring.”Any job involves much more than a paycheck. Some good jobs don’t pay much, and some bad jobs pay a lot. Ultimately, every position is a bundle of things: a salary, yes, but also a benefits package; a work environment that may or may not be pleasant; opportunities to advance (or not); flexible hours (or not).Statistics agencies collect pretty good data on the aspects of jobs that are quantifiable, especially salary and benefits, and not such great data on other dimensions of what makes a job good or bad. But it is clear, as the labor market tightens, that people routinely favor those less quantifiable advantages.That has become vividly apparent in the restaurant industry, which is facing extreme labor shortages.“Traditionally in restaurants, it was: ‘Hey, this is the job. If you want these hours, great; if not, we’ll find somebody else,’” said Christopher Floyd, owner of the hospitality industry recruitment firm Capital Restaurant Resources in Washington. “Now employers have to say, ‘You have the qualities we’re looking for; maybe we can work out a more flexible schedule that works for you.’ Employers are becoming much more cognizant that yes, it’s about money, but also about quality of life.”Whether it’s a bigger paycheck, more manageable hours, or a training opportunity offered to a person with few formal credentials, the benefits of a tight labor market and shifting leverage can take many forms.What they have in common — no matter how long this shift toward workers lasts, or how powerful a force it turns out to be — is that it puts the employee in the position that matters most: the driver’s seat. More

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    Federal Unemployment Aid Is Now a Political Lightning Rod

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    Republican-led states are cutting off relief months ahead of schedule, citing openings aplenty. Some jobless workers face hardships and tough choices.Of the more than four million people whose jobless benefits are going to be cut off in the next few weeks, Bre Starr will be among the first.That’s because Ms. Starr — a 34-year-old pizza delivery driver who has been out of work for more than a year — lives in Iowa, where the governor has decided to withdraw from all federal pandemic-related jobless assistance next Saturday.Iowa is one of 25 states, all led by Republicans, that have recently decided to halt some or all emergency benefits months ahead of schedule. With a Labor Department report on Friday showing that job growth fell below expectations for the second month in a row, Republicans stepped up their argument that pandemic jobless relief is hindering the recovery.The assistance, renewed in March and funded through Sept. 6, doesn’t cost the states anything. But business owners and managers have argued that the income, which enabled people to pay rent and stock refrigerators when much of the economy shut down, is now dissuading them from applying for jobs.“Now that our businesses and schools have reopened, these payments are discouraging people from returning to work,” Gov. Kim Reynolds of Iowa said in announcing the cutoff. “We have more jobs available than unemployed people.”While the governor complains that people aren’t returning to work soon enough, however, some Iowans respond that they are being forced to return too soon.“I’m a Type 1 diabetic, so it’s really important for me to stay safe from getting Covid,” Ms. Starr said, explaining that she was more prone to infection. “I know that for myself and other people who are high risk, we cannot risk going back into the work force until everything is good again.”But just what does “good again” mean?Covid-19 cases have been declining in Iowa as they have throughout the country, and deaths are at their lowest levels since last summer. State restrictions were lifted in February, businesses are reopening, and Iowa’s unemployment rate was 3.8 percent in April, the latest period for which state figures are available — much lower than the national 6.1 percent that month. (Unemployment rates in the 25 states that are cutting off benefits ranged from 2.8 percent to 6.7 percent.)Still, an average of 15,000 new cases and more than 400 related deaths are being reported daily across the country, and barely 40 percent of the population has been fully vaccinated.Most economists say there is no clear, single explanation yet for the difficulty that some employers are having in hiring. Government relief may play a role in some cases, but so could a lack of child care, continuing fears about infection, paltry wages, difficult working conditions and normal delays associated with reopening a mammoth economy.The particular complaints that government benefits are sapping the desire to work have, nonetheless, struck a chord among Republican political leaders.In Ms. Starr’s case, Ms. Reynolds’s move to end federal jobless relief in Iowa is likely to have its intended effect.Ms. Starr can be counted among the long-term unemployed. She has relied on a mix of pandemic-related benefits since last spring, when she left her job as a delivery driver for Domino’s Pizza after co-workers started getting ill.She could probably have already gotten her job back; Domino’s in Des Moines is advertising for drivers. But Ms. Starr has been reluctant to apply.“A lot of people in Iowa don’t wear masks — they think that Covid is fake,” said Ms. Starr, who worries not only about her own susceptibility to infection but also about the health of her 71-year-old father, whom she helps care for: He has emphysema, diabetes and heart troubles.An early withdrawal from the federal government’s network of jobless relief programs affects everyone in the state who collects unemployment insurance. Ms. Starr, like all recipients, will lose a weekly $300 federal stipend that was designed to supplement jobless benefits, which generally replace a fraction of someone’s previous wage. In most of the states, the decision will also end Pandemic Unemployment Assistance, which covers freelancers, part-timers and self-employed workers who are not normally eligible for unemployment insurance. And it will halt Pandemic Emergency Unemployment Compensation, which continues paying people who have exhausted their regular allotment.In addition to the $300 supplement, Ms. Starr gets $172 a week in Pandemic Unemployment Assistance. The total is about $230 less than she earned at her previous job. The government checks pay for her rent, food and some of her father’s medicine, she said.Ms. Starr, who is vaccinated, said the governor’s order would probably force her to go back to work despite her health fears. She is thinking about some kind of customer service job from her home, although that would require her to buy a laptop and maybe get landline telephone service, she said. Absent that, she said, she may have to take another delivery job or work in an office.Whether her case is evidence that ending jobless benefits early makes sense depends on one’s perspective.A brewery in Phoenix. As local economies flicker back to life, federal emergency benefits have prompted a debate over whether pandemic jobless relief is helping or hindering the recovery.Juan Arredondo for The New York TimesIn many cases, the problem is not that people don’t want to work, said Jesse Rothstein, a professor of public policy and economics at the University of California, Berkeley. Rather, benefits give the jobless more options, he said, like an ability “to say no to things that maybe aren’t safe or aren’t good fits.”Mr. Rothstein, though, cautioned against drawing broad conclusions.“The reopening happened really quickly,” he said. As a result, he said, it’s not surprising that there is friction in ramping up and hiring that could be unrelated to benefits. “It may just be that it takes a few weeks to reopen,” he added. “Some of the trouble employers are having in finding workers is that they all tried to find them the same day.”At the online job site Indeed, job searches in states that announced an early end to federal unemployment benefits picked up relative to the national trend. But the increase was modest — about 5 percent — and vanished a week later, said Jed Kolko, the chief economist for Indeed. And low-wage jobs weren’t the only ones to attract more responses; so did finance positions and openings for doctors.Aside from any discussion about the impact of jobless benefits on the labor market, economists have warned of long-lasting scars inflicted on the economy by the pandemic.“It’s important to remember we are not going back to the same economy,” the Federal Reserve chair, Jerome H. Powell, has said. “This will be a different economy.”“The real concern,” he said, “is that longer-term unemployment can allow people’s skills to atrophy, their connections to the labor market to dwindle, and they have a hard time getting back to work.”Roughly 41 percent of the nation’s 9.3 million unemployed fall into the long-term category, defined as more than 26 weeks. About 28 percent of the total have been unemployed for more than a year.Historically, this group, which is disproportionately made up of Black and older Americans, has had a tougher time getting hired. That pattern was likely to be repeated even in the unusual circumstances caused by the pandemic, said Carl Van Horn, the founding director of the Heldrich Center for Workforce Development at Rutgers University.Employers tend to take a negative view of people who have been out of work for an extended period or have gaps in their résumés, regardless of the reasons, Mr. Van Horn said.“Employers always complain about not being able to find the job seeker they want at that moment at the price they are willing to pay, whether it’s the best economy in 50 years or a terrible economy,” he said.The problem with prematurely ending jobless benefits, he said, is that “such a broad brush policy also punishes people who are also desperately looking for work.”That’s the situation that Amy Cabrera says she faces in Arizona. Since she was furloughed last summer, Ms. Cabrera, 45, has been living off about $500 a week in unemployment benefits, after taxes — roughly half the $50,000 salary in her previous job conducting audits in the meetings and events department at American Express.To make ends meet, she has given up the lease on her car and sublet a room in the house she rents in the San Tan Valley, southeast of Phoenix. “I’m paying for my food — whatever I need to survive — and that’s it,” she said, as she sat in the used 2006 Jeep she bought so she would not be carless. Food stamps are helping pay for her meals.But Ms. Cabrera rejected the idea that there were plenty of jobs to be had in Arizona, where the governor has moved to end the $300 federal supplement on July 10. Many positions she is qualified for, including executive administration and office management jobs, are paying $15 an hour, she said, far from enough to pay her $1,550 monthly rent and part of her son’s college tuition. Jobs in Phoenix or Tempe would require her to commute nearly two hours each way during rush hour. And because of a bad back, she can’t have a job that would require her to spend time on her feet.“I have desperately been looking for work,” Ms. Cabrera said. Still, of the roughly 100 jobs she estimated she had applied for, she has had only one interview.She said she didn’t know how she would live on her remaining unemployment benefits — $214 a week after taxes — when she loses the $300 supplement.“I really don’t have an answer for that yet,” she said. “I’ve really just been trying to roll with the punches.” More

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    Hot Vax Summer Is Looking Lukewarm

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    The latest jobs report suggests that getting the economy back up to speed is not going to be effortless.Scene from a diner in New York City last fall. Finding people to fill jobs, particularly those like restaurant work, is proving hard for employers.Laylah Amatullah Barrayn for The New York TimesNow that’s more like it.Employers added 559,000 jobs in May, and created more jobs in March and April than earlier estimates suggested. The shockingly weak April number that confounded economists four weeks ago (originally reported as a gain of 266,000 jobs, now revised up to 278,000) looks like an aberration, not a major downshift in the pace of recovery.But that doesn’t mean all is well. Just a few weeks ago, it seemed more likely than not that the United States was on the verge of a boom summer, a time of explosive growth that would bring the economy back to full health faster than in any recovery in memory.It has become increasingly clear, however — both from anecdotal reports and in data — that a reopening spurred on by vaccination is harder than it once seemed. The possibility of adding a million jobs a month seemed within grasp not long ago, but now looks more like wishful thinking.It’s not so much a hot vax summer as a warm vax summer.If you average the last three months of job creation, employers are adding 541,000 positions a month. In a normal expansion, that would be great; it’s a higher number than was attained for even a single month in the recovery that began in 2009. But it does not imply a return to full health in the immediate future.At the job creation rate of the last three months, it would take 14 months to return to February 2020 employment levels — longer if the goal is to return to the prepandemic employment trend.Unlike in a typical recovery, the problem appears to be the supply of labor, not the demand for it. Job openings are at record highs and employers are eager to hire, but they can’t find workers, at least not at the wages they are used to paying.The details of the May numbers support this idea. Wages are soaring — average hourly earning were up 0.5 percent, yet the share of adults in the labor force actually ticked down. The number of people not in the labor force rose by 160,000, implying more people just said, “Forget it, I’m not even looking for a job.”There have been heated debates over whether this is a result of expanded unemployment insurance benefits, which may give people less incentive to work; concerns related to child care and Covid-related health risks; or perhaps a broader psychological reset for many would-be workers.These are not mutually exclusive; all are likely to be contributors to this unusual moment in which demand for goods and services is soaring and supply of them is constrained.An open question is how much labor supply might increase in some states that end expanded jobless benefits earlier than the September expiration date contained in federal law.The details of the industries that are adding jobs similarly point to reopening struggles. The leisure and hospitality sector, which suffered the worst damage from the pandemic, added 292,000 jobs in May. That sounds great, but is actually slower than the 328,000 jobs it added in April.In other words, even as the nation was four weeks further along in achieving widespread vaccination, and seemingly every restaurant in the country was complaining it couldn’t hire enough waiters, cooks and dishwashers, the pace of recovery in that sector slowed rather than accelerated.To the degree that the labor supply shortage is about people re-evaluating their priorities, it’s not necessarily a bad thing. It could lead to a more lasting reset of compensation and work standards across the economy.But it does have implications for politics and the economy as a whole. For instance, Democrats want to run on a boom-time economy in the 2022 midterms. That will be hard to do if the supply of labor turns out to have shifted lower in the long term.In this strange reopening summer, there have been supply constraints on many things, including lumber, computer chips and used cars. But there is a big difference between those supply problems and the labor supply problem: Humans, unlike lumber and semiconductors, can make choices.To the degree that the labor shortage is caused by expanded jobless benefits or schools that are closed, it should go away in time. To the degree there is a broader rethinking of the role of work in people’s lives, this phenomenon will outlast this post-pandemic summer, whatever its temperature ultimately turns out to be. More