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    Black Workers Stopped Making Progress on Pay. Is It Racism?

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    William Spriggs, a professor at Howard University, wrote an open letter last year to his fellow economists. Reacting to the police killing of George Floyd in Minneapolis, he began the letter with a question: “Is now a teachable moment for economists?”Slamming what he saw as attempts to deny racial discrimination, Dr. Spriggs argued that economists should stop looking for a reason other than racism — some “omitted variable” — to account for why African Americans are falling further behind in the economy.“Hopefully, this moment will cause economists to reflect and rethink how we study racial disparities,” wrote Dr. Spriggs, who is Black. “Trapped in the dominant conversation, far too often African American economists find themselves having to prove that African Americans are equal.”After a year in which demands for racial justice acquired new resonance, Dr. Spriggs and others are pushing back against a strongly held tenet of economics: that differences in wages largely reflect differences in skill.While African Americans lag behind whites in educational attainment, that disparity has narrowed substantially over the last 40 years. Still, the wage gap hasn’t budged.In 2020, the typical full-time Black worker earned about 20 percent less than a typical full-time white worker. And Black men and women are far less likely than whites to have a job. So the median earnings for Black men in 2019 amounted to only 56 cents for every dollar earned by white men. The gap was wider than it was in 1970.Lost ProgressEarnings of Black men, as a percentage of the earnings of white men, are at the same place they were in the 1960s and 1970s. More

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    Where Jobless Benefits Were Cut, Jobs Are Still Hard to Fill

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    Missouri scrapped federal pay to the unemployed, saying it kept people out of the labor market. But so far, workers still seem to be choosy.MARYLAND HEIGHTS, Mo. — By lunchtime, the representatives from the recruiting agency Express Employment Professionals decided to pack up and leave the job fair in the St. Louis suburb of Maryland Heights. Hardly anyone had shown up.“We were hoping we would see prepandemic levels,” said Courtney Boyle, general manager of Express. After all, Missouri had just cut off federal unemployment benefits.Business owners had complained that the assistance, as Gov. Mike Parson put it, “incentivized people to stay out of the work force.” He made Missouri one of the first four states to halt the federal aid; a total of 26 have said they will do so by next month. But in the St. Louis metropolitan area, where the jobless rate was 4.2 percent in May, those who expected the June 12 termination would unleash a flood of job seekers were disappointed.Work-force development officials said they had seen virtually no uptick in applicants since the governor’s announcement, which ended a $300 weekly supplement to other benefits. And the online job site Indeed found that in states that have abandoned the federal benefits, clicks on job postings were below the national average.Of course, it’s early. But conversations with employers who are hunting for workers and people who are hunting for jobs in the St. Louis area revealed stark differences in expectations and assumptions about what a day’s work is worth.The divide raises a fundamental question of what a healthy labor market looks like. Does it mean workers are on such a knife edge that they feel compelled to take the first job that comes along? Or is it one in which employers are the ones who have to scramble and feel pressured to raise wages and improve working conditions? Are the economy and the public better off when workers get to be choosy or when employers do?“One way you might define normal is when employers and workers have the same idea of what an appropriate package looks like, and then the issue is matching up the people with the jobs,” said Katharine G. Abraham, an economist at the University of Maryland and a former commissioner at the Bureau of Labor Statistics.“Clearly part of the problem now,” she said, “is that what employers and what workers think is out of whack.”Why businesses are having such trouble hiring when 9.3 million people were unemployed in May is a puzzle that has generated lots of speculation, but little hard evidence. Many economists are skeptical that enhanced jobless benefits have played an outsize role in the hiring squeeze. They are more likely to point to child care and continuing health fears with less than half the population fully vaccinated. Nor should it be surprising that the nation’s road back from the harrowing limbo of the pandemic, in which millions of jobs vanished and more than 600,000 people have died, is bumpy.In any case, the squeeze has given many job seekers the confidence that they can push for higher wages or wait until employers come around.“They know how in demand they are,” said Angelic Hobart, a client service manager at American Staffing who occupied a table at the Maryland Heights job fair. “And I think that is being taken advantage of.” She said she had dozens of manufacturing, warehouse, sales, office and technology positions to fill. But public benefits have made people “very complacent,” she said. And sometimes “their pay expectations are way over what their skill level is.”Many of the 34 employers and agencies at the job fair said they had raised wages by $1 an hour or more in recent months. And they shared a refrain: There were good jobs available but not enough good workers to fill them, those who were reliable and were willing to work hard.That’s not the way Elodie Nohone saw it. “They’re offering $10, $12, $13,” said Ms. Nohone, who already earns $15 an hour as a visiting caregiver and was hoping to find a higher-paying opportunity. “There’s no point in being here.”Her boyfriend, Damond Green, was making his way around the room. He holds two jobs, one at McDonald’s, where after seven years he earns $15 an hour, and another providing home health care. He and Ms. Nohone have a baby on the way, and Mr. Green is looking for one job with higher pay. “Two jobs stretch you thin,” he said.“I want to do something where my work is appreciated,” he said, “and pay me decent.” His goal is to earn $50,000 a year, or about $25 an hour — roughly the median earnings of wage and salaried employees in the United States.The labor market’s deeper problem, said Francine D. Blau, an economist at Cornell University, is the proliferation of low-paid jobs with few prospects for advancement and too little income to cover essential expenses like housing, food and health care.The pandemic focused attention on many of these low-wage workers, who showed up to deliver food, clean hospital rooms and operate cash registers. “The pandemic put their lives at risk,” Ms. Blau said, “and we began to wonder if we are adequately remunerating a lot of the core labor we need to function as an economy and society.”Many economists are skeptical that enhanced jobless benefits have played an outsize role in the hiring squeeze.Whitney Curtis for The New York TimesWorkers at a St. Louis restaurant. In recent decades, a declining share of the country’s wealth and productivity gains has gone to labor.Whitney Curtis for The New York TimesTerri Waters, who showed up at the job fair in search of a high-level marketing job, said she had a greater appreciation for the work done by many low-wage earners. Her marketing business dried up when the pandemic hit, and while job-hunting, she has been working at a natural-food store for $11.50 an hour.“It’s really demanding work, you’re on your feet and by the end of the day you’re tired and sore,” Ms. Waters said. She understood why many job hunters were demanding more. “It’s not that people are being lazy,” she said. “They just want something better to go back to.”Hundreds of jobs were being offered at the fair. A home health care agency wanted to hire aides for $10.30 an hour, the state’s minimum, to care for disabled children or mentally impaired adults. There were no benefits, and you would need a car to get from job to job. An ice rink, concert and entertainment center was looking for 80 people, paying $10.30 to $11.50 for customer service representatives and $13 for supervisors. But the jobs last just through the busy season, a few months at time, and the schedules, which often begin at 5 a.m., change from week to week.In St. Louis, a single person needs to earn $14 an hour to cover basic expenses at a minimum standard, according to M.I.T.’s living-wage calculator. Add a child, and the needed wage rises just above $30. Two adults working with two children would each have to earn roughly $21 an hour.The Biden administration has made clear that it seeks to tilt bargaining power toward workers. At the core of the president’s economic model, said Jared Bernstein, a member of the White House Council of Economic Advisers, “is the view that workers too often lack the necessary bargaining clout to claim their fair share of growth that they themselves are helping to produce.”In recent decades, a declining share of the country’s income and its productivity gains has gone to workers. And for adults without a four-year college degree, the options are especially bleak. From 1974 to 2018, for example, real wages for men with only a high school diploma declined by 7 percent. For those without that diploma, wages fell by 18 percent.For most of the last 40 years, less than full employment has tended to give employers the advantage. As it becomes harder to find qualified candidates, though, employers are often slow to adjust expectations.Among job seekers interviewed at job fairs and employment agencies in the St. Louis area the week after the benefit cutoff, higher pay and better conditions were cited as their primary motivations. Of 40 people interviewed, only one — a longtime manager who had recently been laid off — had been receiving unemployment benefits. (The maximum weekly benefit in Missouri is $320.)In St. Louis, the Element Hotel held a job fair to hire servers, bartenders and front-desk receptionists. Housekeepers were especially in demand. Janessa Corpuz, the general manager, had come in on a Sunday with her teenage daughter to do laundry because of the shortage.The hotel, which is on a major bus line, raised its starting wage to $13.50 an hour, the second increase in two months. It also offers benefits and a $50-a-month transportation allowance. The number of applicants shot up — to 40 from a handful the previous month — after the second wage increase.The search for higher pay and better conditions attracted people to a job fair held by the Element Hotel in St. Louis.Whitney Curtis for The New York TimesShaleece Carter, 27, had a housekeeping job at another hotel, but it was near the airport, and her two-bus commute took two hours each way on a good day, compared with 25 minutes by car. One Saturday, when buses tend to be more irregular, she left her job at 4 p.m. but didn’t get home until 8 p.m. “That was it,” she said.She got an offer on the spot and took it.Justin Johnson, too, already had a job when he showed up at an Express Employment Professionals office. He was working at a pet feed company, earning $14 an hour to shovel piles of mud or oats. But that week temperatures topped 90 degrees every day and were heading past 100.“The supervisor pushed people too hard,” Mr. Johnson said. He had to bring his own water, and if it was a slow day, he got sent home early, without pay for the lost hours.He accepted an offer to begin work the next day at a bottle packaging plant, earning $16.50.Amy Barber Terschluse, the owner of three Express franchises in St. Louis, handles mostly manufacturing, distribution and administrative jobs. Wages, hours and a short commute are what matter most to job seekers, she said, and few would work for less than $14 an hour.Ms. Terschluse said she had also had to educate employers, who have gotten used to low wages and the ability to dictate schedules and other conditions.Some employers, she said, have also gotten into “a vicious cycle of replace, replace, replace.”In industries like hospitality and warehousing, annual turnover rates can surpass 100 percent, which can pare overall growth. Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said good job matches between employers and workers produced the most productivity and engagement.A dynamic labor market is one where the two sides negotiate over compensation, Ms. Daly said. If jobless benefits allow people to be a little more choosy because they are not destitute, she said, then “I, as an economist, predict that will be better for job matches and a better economy in the long run.” More

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    Survey Finds Support for Halting Federal Unemployment Benefits

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    A slim majority of Americans say it is time for enhanced unemployment benefits to end.The federal government is providing jobless workers with $300 a week in benefits on top of their regular unemployment payments. Those benefits are set to last until September, although 26 states — all but one led by Republicans — have cut them off early or plan to do so in coming weeks.Critics, including many business owners and Republican politicians, argue that the extra benefits are discouraging people from looking for jobs and making it hard for businesses to find workers. Proponents, including progressive groups and many Democratic politicians, contend that the benefits are needed as the economy continues to heal and while pandemic-related risks remain.Republican arguments seem to be resonating with the public. Just over half of Americans — 52 percent — want the extra benefits to end immediately, according to a survey of 2,600 adults conducted this month for The New York Times by the online research firm Momentive, which was previously known as SurveyMonkey. Another 30 percent want the benefits to end in September as planned. Only 16 percent want the additional benefits to continue indefinitely.Views on the benefits are divided along partisan lines. Of Republicans, 80 percent want the extra benefits to end right away, compared with 27 percent of Democrats. But even among Democrats, most respondents don’t want the benefits to last past September.The survey also asked respondents who weren’t working what was keeping them off the job. Thirty-three percent said they were looking for jobs but “have not been able to find one that is worth taking,” and another 11 percent said they did not feel safe returning to work. Respondents volunteered a range of other explanations, including:“I don’t want to wear a mask and I don’t plan to be vaccinated.”“I am just recently fully vaccinated and will begin driving for Lyft again next week.”“Child care and no luck on job search.”“Age. Companies look at my age and pass.”“Car broke down and no money to fix it.”The survey included 65 respondents who said they were currently receiving unemployment benefits. Asked how they would behave if their benefits were cut off, 17 said they would still not return to work. Most of the rest said they would take a job that paid less than they wanted, made them feel unsafe or offered poor hours or working conditions.As of early June, some 3.5 million people were receiving benefits in states that plan to end some or all of the emergency programs early. A handful of states, including Alabama, Indiana and Missouri, have already cut off extra payments; more than 700,000 people were receiving benefits in those states as of early June. More

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    The Teamsters consider a new emphasis on organizing Amazon workers.

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    The International Brotherhood of Teamsters, which represents over one million workers in North America in industries including parcel delivery and freight, will vote on whether to make it a priority to organize Amazon workers and help them win a union contract.“Amazon is changing the nature of work in our country and touches many core Teamster industries and employers,” states the resolution, which will be voted on at the Teamsters convention on Thursday. The company “presents an existential threat to the standards we have set in these industries,” it says.The resolution states that the union will “supply all resources necessary” and will eventually create an Amazon division to help organize workers at the company.It does not elaborate on the timing for such a division or how much money or manpower the union will devote to the effort, and a union spokeswoman did not respond to a request for comment on those particulars. Last year the union had revenue of more than $200 million, according to Labor Department filings.Amazon did not immediately reply to a request for comment on Tuesday.In an opinion column this month for Salon, Randy Korgan, a Teamsters official from Southern California who has been the national director for Amazon since the position was created last year, wrote that the union would bypass traditional workplace elections conducted by the National Labor Relations Board.Instead, Mr. Korgan wrote, the union will focus on building support from both Amazon workers and from other warehouse and delivery workers and community members, and it aims to bring the company to the bargaining table by orchestrating strikes, boycotts, protests and other actions.Amazon defeated a conventional campaign organized by a retail workers union at a warehouse in Bessemer, Ala., this year, after which a number of union leaders suggested that a shift to the strategies highlighted by Mr. Korgan might be more fruitful. Those union leaders pointed out that federal labor law gives employers large advantages during election campaigns — allowing companies to hold mandatory anti-union meetings, for example — and that the government cannot fine employers who violate the law. (The retail workers union is challenging the results of the election at the Bessemer warehouse, accusing Amazon of intimidating workers.)Support for the approach is far from unanimous within the labor movement, however.In an interview after the election in Alabama, Stuart Appelbaum, the head of the retail workers union that oversaw the campaign, said seeking to win union elections at Amazon warehouses should remain a focus. “If you want to build real power, you have to do it with a majority of workers,” Mr. Appelbaum said at the time.The Teamsters union holds its convention every five years and uses it to set the priorities that the union will pursue until the next convention. The resolution states that momentum for the Amazon campaign has been building since the union’s last convention in 2016.During that time, it says, various Teamster departments “have been tracking Amazon’s growth, presence and impact on Teamster industries and speaking with thousands of workers to develop different operating theories on the best way to engage and support Amazon workers.” More

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    How NYC Faces a Lasting Economic Toll Even as the Coronavirus Pandemic Passes

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    Gabriela Bhaskar/The New York TimesNew York City is beginning to rebound from the economic devastation of the pandemic.But it won’t be easy. Neighborhoods remain pockmarked by vacant commercial real estate, and the city’s unemployment rate remains almost twice the national average.While there are signs that the city is coming back to life, the path forward is anything but clear.New York Faces Lasting Economic Toll Even as Pandemic PassesThe city’s prosperity is heavily dependent on patterns of work and travel that may be irreversibly altered.Nelson D. Schwartz, Patrick McGeehan and As the national economy recovers from the pandemic and begins to take off, New York City is lagging, with changing patterns of work and travel threatening the engines that have long powered its jobs and prosperity.New York has suffered deeper job losses as a share of its work force than any other big American city. And while the country has regained two-thirds of the positions it lost after the coronavirus arrived, New York has recouped fewer than half, leaving a deficit of more than 500,000 jobs.New York City lost greatest share of jobs among 20 largest U.S. citiesThe city had an 11.8 percent decline in jobs from February 2020 to April 2021, almost three times the loss on the national level.

    Source: Center for New York City Affairs at the New SchoolTaylor JohnstonRestaurants and bars are filling up again with New Yorkers eager for a return to normal, but scars are everywhere. Boarded-up storefronts and for-lease signs dot many neighborhoods. Empty sidewalks in Midtown Manhattan make it feel like a weekend in midweek. Subway ridership on weekdays is less than half the level of two years ago.The city’s economic plight stems largely from its heavy reliance on office workers, business travelers, tourists and the service businesses catering to all of them. All eyes are on September, when many companies aim to bring their workers back to the office and Broadway fully reopens, attracting more visitors and their dollars. But even then, the rebound will be only partial.The shift toward remote work endangers thousands of businesses that serve commuters who are likely to come into the office less frequently than before the pandemic, if at all. By the end of September, the Partnership for New York City, a business advocacy group, predicts that only 62 percent of office workers will return, mostly three days a week.Restoring the city to economic health will be an imposing challenge for its next mayor, who is likely to emerge from the Democratic primary on Tuesday. The candidates have offered differing visions of how to help struggling small businesses and create jobs.“We are bouncing back, but we are nowhere near where we were in 2019,” said Barbara Byrne Denham, senior economist at Oxford Economics. “We suffered more than everyone else, so it will take a little longer to recover.”At 10.9 percent in May, the city’s unemployment rate was nearly twice the national average of 5.8 percent. In the Bronx, the city’s poorest borough, the rate is 15 percent. Workers in face-to-face sectors like restaurants and hospitality, many of whom are people of color, are still struggling.“While the recovery has probably exceeded expectations, unemployment remains staggeringly high for Black and brown individuals and historically marginalized communities,” said Jose Ortiz Jr., chief executive of the New York City Employment and Training Coalition, a work force development group.At the same time, hundreds of small businesses, which before the pandemic employed about half of the city’s work force, didn’t survive. And many that did are saddled with debt they took on to survive the downturn and owe tens of thousands of dollars in back rent.“I have a huge amount of debt to pay back because I had to borrow all over the place to stay alive,” said Robert Schwartz, the third-generation owner of Eneslow Shoes & Orthotics. He closed two of his four stores, but kept open branches on Manhattan’s Upper East Side and in Little Neck, Queens. “We’ll survive, but it’s going to be a long, slow recovery.”Office buildings in Lower Manhattan. The city depends more heavily than other places on office workers, business travelers, and the service businesses catering to all of them.Gabriela Bhaskar/The New York TimesEven if just 10 percent of Manhattan office workers begin working remotely most of the time, that translates into more than 100,000 people a day not picking up a coffee and bagel on their way to work or a drink afterward.Gabriela Bhaskar/The New York TimesEmpty sidewalks in parts of the city once filled with office workers make it feel like a weekend in midweek.Gabriela Bhaskar/The New York TimesOne crucial factor in the city’s economic trajectory, civic and business leaders say, is addressing safety concerns. Violent crime has risen since the pandemic hit — including a high-profile Times Square shooting in May that wounded two women and a 4-year-old girl — and the police have recently increased Midtown foot patrols.“The negatives of New York life are worse,” said Seth Pinsky, chief executive of the 92nd Street Y, a longtime cultural destination on the Upper East Side.“Crime is going up and the city is dirtier,” added Mr. Pinsky, who served as president of the city’s Economic Development Corporation under former Mayor Michael R. Bloomberg. “It’s critical that we get the virtuous cycle going again.”On Friday, Mayor Bill de Blasio said on a radio show on WNYC that the city had more police officers in the subway than at any time in the last 25 years. “We want to really encourage people back, to protect everyone,” he said.Nonetheless, worries about crime are frequently cited by workers who have returned. “There are questions from employees about safety in the city and increased concern,” said Jonathan Gray, president of the financial behemoth Blackstone. “My hope is that as the city fills up there will be less of that.”New York is certainly feeling less deserted than it did a few months ago. Nearly 195,000 pedestrians strolled through Times Square on June 13, more than twice the typical number in the bleak winter days when the coronavirus was raging. That’s a long way from the 365,000 who passed through daily before the pandemic, but the totals are edging higher, according to Tom Harris, president of the Times Square Alliance, a nonprofit group that promotes local businesses and the neighborhood.Change in foot traffic in New York City, by type of location

    Foot traffic data was aggregated and anonymized by Foursquare from smartphone apps that shared location data. Data as of June 18, 2021.Source: FoursquareTaylor JohnstonWhen Mr. Gray returned to Blackstone’s Midtown headquarters last summer, there were just 16 other people spread over 19 floors. Today, there are more than 1,600, and Blackstone is asking all employees who have been vaccinated to return.“It’s gone from feeling super lonely and now it’s feeling pretty normal,” Mr. Gray added.Wall Street and the banking sector are pillars of the city’s economy, and they have been among the most aggressive industries in prodding employees to go back to the office. James Gorman, the chief executive of Morgan Stanley, told investors and analysts this month that “if you want to get paid in New York, you need to be in New York.”Many firms, including Blackstone and Morgan Stanley, have huge real estate holdings or loans to the industry, so there is more than civic pride in their push to get workers to return. Technology companies like Facebook and Google are increasingly important employers as well as major commercial tenants, and they have been increasing their office space. But they have been more flexible about letting employees continue to work remotely.Google, which has 11,000 employees in New York and plans to add 3,000 in the next few years, intends to return to its offices in West Chelsea in September, but workers will only be required to come in three days a week. The company has also said up to 20 percent of its staff can apply to work remotely full time.The decision by even a small slice of employees at Google and other companies to stay home part or all of the week could have a significant economic impact.Even if just 10 percent of Manhattan office workers begin working remotely most of the time, that translates into more than 100,000 people a day not picking up a coffee and bagel on their way to work or a drink afterward, said James Parrott, an economist with the Center for New York City Affairs at the New School.“I expect a lot of people will return, but not all of them,” he said. “We might lose some neighborhood businesses as a result.”The absence of white-collar workers hurts people like Danuta Klosinski, 60, who had been cleaning office buildings in Manhattan for 20 years. She is one of more than about 3,000 office cleaners who remain out of work, according to Denis Johnston, a vice president of their union, Local 32BJ of the Service Employees International Union.Ms. Klosinski, who lives in Brooklyn, said that she had been furloughed twice since last spring and that she had been idle since November. She said she feared that if she were not recalled by September, she would lose the health insurance that covers her husband, who suffered a stroke and a heart attack.“I’m worried about losing everything,” she said.Also weighing on the city’s outlook is the decline in visits by tourists, who are venturing back in dribbles, not in droves.Performers in Times Square, which saw nearly 195,000 pedestrians pass through on a recent day. That’s a long way from the 365,000 who passed through daily before the pandemic.Gabriela Bhaskar/The New York TimesAn ice cream vendor waited for customers at Bryant Park in Midtown.Gabriela Bhaskar/The New York TimesPassengers aboard a cruise to the Statue of Liberty. City officials expect that it will take at least a few years to draw as many visitors as in 2019.Gabriela Bhaskar/The New York TimesIn 2019, New York welcomed over 66 million out-of-towners, and they spent more than $45 billion in hotels, restaurants, shops and theaters. City officials expect that it will take years to draw so many visitors again, especially the bigger-spending foreign tourists and business travelers on expense accounts.Ellen V. Futter, president of the American Museum of Natural History, said domestic tourism was rebounding faster than she had expected. “The local population is out and about and happy to be so,” Ms. Futter said. But the scarcity of international visitors “is going to tamp down the pace of recovery,” she said.That lag will spell prolonged pain for many businesses. Employment in hotels and restaurants is about 150,000 lower than it was before the pandemic, while the number of jobs in the performing arts is down about 40,000.To be sure, there are signs of a strengthening economy. After many residents fled the city last year, high-priced condos are again being snapped up, and the rental market is showing signs of firming after price drops.Rudin Management, the real estate giant, is trimming back the concessions it offered to attract tenants at the height of the pandemic. “I’m getting calls from people saying their son or daughter or grandson or granddaughter is graduating and asking for an apartment,” said William C. Rudin, the firm’s chief executive. “We didn’t get those calls for a year.”New Yorkers are also getting out more. When the Rockaway Hotel in Queens opened in September after years of planning, a hip destination in a historically working-class beach neighborhood, “people who lived four blocks away would take hotel rooms for the night because they wanted a staycation,” said Terence Tubridy, a managing partner.Since indoor dining resumed in February, the 53-room hotel’s weekend occupancy rate has been 80 percent, Mr. Tubridy said. Along with more visitors recently from California and the Midwest, he reports a flood of inquiries about weddings and birthday parties.As the hotel prepares for its first opportunity to serve the bustling summer crowds at Rockaway Beach, Mr. Tubridy is looking to add 100 employees to his current staff of 180.Amy Scherber is also seeing signs of better days. When the pandemic struck, she was forced to close all but two of her Amy’s Bread shops in New York City and lay off more than 100 employees. She wound up making cakes and pastries herself in a kitchen in Long Island City, Queens.But now, Ms. Scherber has rehired some of her employees, and a crew of four bakers is handling the pastries while she oversees the steadily increasing production of baguettes and other loaves. She has reopened her store in Chelsea Market, a Manhattan tourist destination, and is preparing to reopen other retail locations. Her wholesale business is also rebounding as restaurants that were closed for months are again ordering dinner rolls.“In the last couple of weeks, we finally have seen the business starting to pick up a bit,” said Ms. Scherber, who started her operation 29 years ago. She is hopeful about a strong recovery, she said. But she added, “I see the city taking several years to be the economy it was.”The Empire State Building and One World Trade Center.Gabriela Bhaskar/The New York Times 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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    State unemployment claims increased last week.

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    Initial claims for state jobless benefits rose last week, the Labor Department reported Thursday.The weekly figure was about 402,000, up 37,000 from the previous week. New claims for Pandemic Unemployment Assistance, a federally funded program for jobless freelancers, gig workers and others who do not ordinarily qualify for state benefits, totaled 118,000, up 47,000 from the prior week. The figures are not seasonally adjusted. (On a seasonally adjusted basis, state claims totaled 412,000, an increase of 37,000.)In four states — Alaska, Iowa, Mississippi and Missouri — it was the final week in which some or all federal pandemic unemployment benefits were paid, including a $300 supplement to other benefits. A total of 25 Republican-led states have announced plans to discontinue federal benefits this month or next, even though they are funded through September.New state claims remain high by historical standards but are one-half the level recorded in early February. The benefit filings, something of a proxy for layoffs, have receded as businesses return to fuller operations, particularly in hard-hit industries like leisure and hospitality. More

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    The Fed Meets as Economic Data Offers Surprises and Mixed Signals

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    The central bank will release its policy statement on Wednesday, followed by a news conference with Chair Jerome H. Powell.Investors will scour the Federal Reserve’s policy statement and economic projections Wednesday for any hint that recent data surprises — including faster-than-expected inflation and slower job growth — have shaken up the central bank’s plans for its cheap-money policies.Economic policymakers are unlikely to make major changes at a time when interest rates are expected to stay near zero for years to come, but a series of tiny adjustments to their policy messaging and new economic projections could combine to make this week’s meeting one to watch, and an important moment for markets.The central bank will release new economic forecasts from its 18 officials for the first time since March, when the Fed projected no rate increase until at least 2024. Policymakers could pencil in an earlier move, pulling the initial rate rise forward to 2023.Markets will also watch for even the subtlest hint at what lies ahead for the Fed’s $120 billion in monthly bond purchases, which have kept many kinds of borrowing cheap and pushed up prices for stocks and other assets. Several Fed officials have said they would like to soon discuss plans for slowing their bond buying, though economists expect it will be months before they send investors any clear signal about when the “taper” will start.The Fed is scheduled to release the policy announcement from its two-day meeting at 2 p.m., followed by a news conference with Chair Jerome H. Powell.The central bank may want to use the meeting and Mr. Powell’s remarks to “start getting us ready, otherwise, we’re going to be in complete denial until we realize — ‘Ouch, the Fed is stepping away,’” said Priya Misra, head of global rates strategy at T.D. Securities. The point may be to say “they are not running for the exits, but they are at least planning the escape route.”As it charts a path forward for policy, the Fed will have to weigh signs of economic resurgence — rapid price gains as demand jumps back faster than supply, as well as plentiful job openings — against the reality that millions of people have yet to return to work. The shortfall probably owes to a cocktail of factors, as older workers retire, would-be immigrants remain in their home countries, and virus fears, child-care issues and expanded government benefits combine to keep potential employees at home.Many workers may simply need time to shuffle into new and suitable jobs, and the Fed is likely to signal that it plans to continue providing policy support as they do that. Here’s what else to watch for.The Fed is working with higher inflation.The Fed is aiming for inflation that runs “moderately above 2 percent for some time” so that it eventually averages 2 percent. Its policy statement has long noted that price gains have run “persistently below this longer-run goal.” After several months of above-2 percent inflation numbers, it may be time to update that language to reflect recent price spikes.The Fed’s preferred inflation gauge jumped 3.6 percent in April from a year earlier, and the more up-to-date and closely related Consumer Price Index inflation measure popped by 5 percent in May.But the Fed — like many financial economists — expects that pop to prove temporary. The 5 percent increase in C.P.I. happened partly because prices fell during last year’s intense lockdowns, making current year-over-year comparisons look artificially elevated. Without that so-called base effect, the increase would have been in the neighborhood of 3.4 percent.Prices are definitely up, but will it last?The Consumer Price Index slumped early in the pandemic, but now it’s up relative to its pre-pandemic trend growth.

    Data reflect the Consumer Price Index for all urban consumers, indexed so that 1982-1984=100.Source: Bureau of Labor Statistics, New York Times calculationsBy The New York TimesThat is still obviously on the high side. The rest of the surge came as wages increased and demand bounced back faster than global supply chains, fueling shortages in computer chips and causing shipping snarls. While base effects should fade quickly, it is unclear how rapidly supply bottlenecks will be sorted out. The semiconductor issue may clear up over the coming months, for instance, but some importers have estimated that a shipping container shortage could last at least into next year, potentially lifting prices for some products.Compounding that uncertainty, the jump in inflation came faster than officials had expected. If the Fed’s preferred inflation index stood completely still at its April level, inflation would grow by 2 percent this year. Instead, prices have continued to grind higher and are most likely already on track to exceed the Fed’s 2.4 percent forecast for 2021. That means officials are going to have to revise their estimates upward when they release new economic projections. The big questions are by how much and whether the revisions bleed into next year.Mr. Powell is likely to maintain that the recent surge is temporary, yet he will probably have to address the risk that inflation expectations and wages will rise more briskly, locking in the faster price gains. He has previously said that is a possibility, but an unlikely outcome.“He may be a little less strident than he was at the April press conference,” said Michael Feroli, chief U.S. economist at J.P. Morgan.Policy plans may take some tweaking.Economists at Goldman Sachs don’t expect the Fed to begin hinting that it is planning to slow its bond purchases until August or September, with a formal announcement in December, and an actual start to tapering at the beginning of next year.Even then, it’s going to take a long time for the Fed to really unwind its policy support. The Fed has suggested it will first signal that it is thinking of slowing bond purchases, then actually taper, and only then lift rates. Strategists at Goldman estimate that “even if the labor market recovery accelerates rapidly from here,” the first rate increase would probably still be “at least” 15 months away.Mr. Powell could say or suggest that the policy-setting Federal Open Market Committee is taking the first baby step toward that process — what has been called “talking about talking about tapering” — during his news conference.The Fed balance sheet has exploded The central bank is buying $120 billion in government-backed bonds each month, keeping its balance sheet steadily expanding.

    Source: Federal Reserve, accessed via FREDBy The New York TimesOfficials could also begin to pencil in a timetable for rate increases. The Fed’s so-called dot plot of interest rate projections showed no interest rate increases through 2023, the last year in the forecast, as of March. Many economists expect it to show one rate increase in 2023 after revisions.Labor is lagging.But the Fed’s outlook is likely to remain patient — signaling years of low rates ahead — because the job market has a lot of room left to recover. About seven million fewer people reported being employed in May than in February 2020.While recent job gains have been robust by normal standards, they’ve been slow compared with the hole that remains in the labor market. After climbing by a solid 785,000 jobs in March, hiring has slowed to a more subdued 418,500 jobs on average over the past two months.The Fed has two goals — stable inflation and maximum employment — and the recent hiring slowdown means the second target could take a little bit longer to achieve.“Bottom line, I would like to see further progress than where we are right now,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, said on CNBC shortly after the May jobs report was released. “We want to be very deliberately patient here, because this was a huge, huge shock to the economy.”That’s why economists are looking out for tweaks this week — but no major shift away from the Fed’s supportive stance. More