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NOTE: The following Q&A with Jed Kolko appeared in the August 2020 Leadership Connect newsletter.
Jed is Chief Economist with Indeed’s Hiring Lab. He specializes in applying proprietary and publicly available datasets to uncover insights about the labor market, the future of work, housing markets, urban trends, and more. Jed’s written for The New York Times, The Wall Street Journal, FiveThirtyEight, and others and earned a Ph.D. in economics at Harvard University.
Q: In 2019, we were in a tight labor market. Then the pandemic hit. Will we return to a tight labor market when the pandemic is over?
When the acute phase of this pandemic ends, we're not going to snap back to the tight labor market of 2019 when unemployment dipped to a 50-year low. Like highway crashes, the slowdown lasts long after the damage is cleared. U.S. government economists project a prolonged, sluggish recovery for the labor market — not the "V" shaped bounceback some people had expected.
The acute phase of this crisis began in March (2020). The pandemic — and necessary containment efforts — shut down large sectors of the economy: restaurants, hotels, travel, and much of retail. Since May there's been a gradual rebound in job postings, but the trend has worsened in places where the virus has surged this summer. Ultimately the acute phase will end when testing, treatment, or a vaccine brings the virus under control.
Q: What’s the impact of the current economic situation on passive job candidates?
Some people are obviously desperate for work. They lost their jobs — maybe their health insurance, too. But many others are now less inclined to search. If you’ve got a good, secure job, you’ll probably stay put if you can. Few people want to switch jobs and be the last one hired at a new company when uncertainty is high. Voluntary quits are down 40% compared to before the pandemic. In short: for many, job search will become less want-to and more have-to.