Frederica Freyberg:

Each year around Labor Day, economists at UW-Madison put out a report titled “The State of Working Wisconsin.” This year, as the state recovers from the losses endured during the COVID pandemic, things are a little shaky due to surges caused by the Delta variant. For more on forward progress for the labor economy as well as the backward steps incurred, we turn to associate director of COWS, formerly known as the Center on Wisconsin Strategy at UW-Madison, Laura Dresser. Thank you for being here.

Laura Dresser:

Thanks so much for having me.

Frederica Freyberg:

Well, as you report, COVID obviously really pummeled the workforce. Your report notes that 114,000 jobs were lost with the hardest hit being in the leisure and hospitality sector, with nearly 50,000 jobs lost, and where employment is still down 17.6%. How historic are these losses?

Laura Dresser:

Well, the losses in April of 2020 were historic, massive contraction, and re-instant kind of restructuring. That 114,000 that we’re behind, that’s how many fewer jobs we had in July compared to February 2020. That’s after a lot of months of progress, right, so that the original contraction was intense and deep, and leisure and hospitality actually in April of 2020 was down 50% and has come back each — slowly and unevenly to this level of being almost 20% behind still where it was in February 2020.

Frederica Freyberg:

So it’s still nearly 20% behind. One question often asked is, why didn’t those workers return?

Laura Dresser:

Well, one thing, you can see across the state is that some restaurants didn’t survive the contraction, right? Some jobs in the industry are gone. Some workers didn’t return because last year, their kids were doing school online and it was difficult to find childcare. And especially when you’re getting industry — restaurant industry wages, the childcare situation can be completely impossible and with the online learning, the family demands were high. But I think also some people used the chance to move into different sorts of jobs, jobs with less exposure, right? The idea of being exposed at work through customers or co-workers became more threatening. The idea of not getting health insurance from your job became a bigger negative. And so there are all sorts of ways that workers could reconsider work, but also just this intense contraction that jobs didn’t exist. And so both things are going on and it’s important to remember both.

Frederica Freyberg:

Now you say in your reporting that a weak labor market tips the balance of power toward employers. I would think it would be exactly the opposite, especially as employers report being so desperate for workers?

Laura Dresser:

I know, at this point in the — I mean, in the original part of the interaction, I would say it was clear there was a lot of slack, there were a lot more workers than jobs. I think at this point, there’s just strong evidence that the balance is tipped in the direction of workers for sure. And you can see that in the kind of relatively we’re not back to February 2020 unemployment rates, but we’re back close to that. And you can see that in the recruiting notices that you get in the mail or the signs on the doors, and I think this is an important moment to try and see the unsustainability of the way those jobs were structured before the pandemic to see what it means to have jobs with bad hours, low wages, no paid leave in the context of a pandemic, the people who are serving your food don’t — in most restaurant work sites don’t get paid if they get sick and stay home. So that’s a pretty big incentive to come to work sick. So all these things kind of got revealed, like what’s an essential worker, and then how do we restructure that work to make it — to make life in those jobs sustainable.

Frederica Freyberg:

As you just said, our unemployment rate is down, and this summer in your report, you noted that Wisconsin added more than 13,000 jobs. So that is real progress out of the COVID hole going forward.

Laura Dresser:

Yeah, absolutely. I think we are seeing — we’ve seen real progress, like I said, you know, loss of so — 500,000 jobs, if I remember correctly, in April 2020. So really, we’ve moved a long way forward on that. We’re still behind a little bit, but I think what we’re really seeing now is workers thinking hard about what’s possible for them and their families, what’s safe, can they get childcare, can they afford the things they need in work, and are they safe. And I think the vaccines have really been a game changer, but again, game change, also Delta variant, and that puts people back on their heels a little bit as well.

Frederica Freyberg:

Too many game changes. But today’s national job numbers were lower than projected. What does that foretell in your mind?

Laura Dresser:

Yeah, I think that we’ve had two very strong kind of 700,000-plus jobs reports, and then this month was more like 235. I think that from my preliminary look at those numbers, it looks to me like that’s weaker than expected, but still substantial growth in the right direction, and you see dynamism in sectors in restaurants and in leisure and hospitality that are really needing to recover. So there is recovery there, it’s not as strong as people want — or people expected but it’s still recovery, and so it’s like good news but a reminder that this is a rocky path and there are a lot of dynamics at work. There’s also some evidence of stronger wage pressure in that report, in leisure and hospitality, so seeing that maybe this is a chance that those jobs get restructured a little bit.

Frederica Freyberg:

All right. Well, Laura Dresser, thank you very much. Thanks for your work.

Laura Dresser:

Thanks for having me.