How Many Workers are Sitting Out the Covid-19 Pandemic?

More than just telling us how many jobs were gained or lost, the monthly jobs report tells us how people are working—including, crucially, how many people are kept out of the labor force because of the pandemic.

The US Bureau of Labor Statistics reports that in January, 7.8 million people were not working because of the pandemic—either because they were prevented from looking for work or because their employer lost business—down from a high of 59.5 million in May 2020 (the month the questions were first asked).

The BLS includes survey responses about Covid-19’s impact on work with its monthly employment situation report. The newest report comes out Friday (March 4), and will have data for February. This will give us the first indication of whether the waning of the pandemic is bringing workers back into the job market. 

The CDC has already scaled back its mask recommendations. In his State Of The Union address, President Biden said the country had reached “a new moment” in the pandemic, saying “Covid-19 need no longer control our lives.” Public opinion reflects this more relaxed attitude: polls have shown that Americans are much less worried about catching the virus than they were even a few weeks ago, and also less supportive of mask mandates. 

Those trends are likely to be reflected in the monthly employment situation report. In its survey, the BLS has focused on three key metrics:

• The percentage of the workforce who are teleworking because of the virus;
• The number of people unable to work because their employer lost business; and
• The number of people not in the labor force who are prevented from looking for work because of pandemic concerns.

Each of those metrics show a similar pattern: high rates in the spring of 2020, decreasing until a small spike in early 2021, then another gradual decrease until rising again in January 2022 (when the Omicron variant was surging most). But within that pattern, each measurement shows a different side of the pandemic’s impact. 

Remote work is here to stay

The BLS survey specifically asks workers if they worked from home in the past four weeks because of the pandemic. By design, this excludes people who work from home permanently—and that number is growing steadily. 

Our data show that the percentage of remote work positions has more than tripled since the beginning of 2020—particularly in tech, finance, sales, and customer service roles. A Pew Research study shows that over half of the workers currently working remotely would prefer to stay home, rather than return in-person. And in a tight labor market, employers are holding off on mandating a return to the office, fearful of losing workers who would prefer to stay remote.

Those who want work have found it

Among these three survey responses, the most dramatic shift has been among people unable to work because their employer lost business. In the early months of the pandemic, this was a major problem for workers, but it has affected fewer and fewer people since the fall of 2020. That trend is also reflected in the overall unemployment rate, which reached a pandemic low of 3.9% in December 2021 after a peak of 14.7% in April 2020.

One possible explanation for this decline is the power and flexibility that workers have in a tight labor market. With so many businesses hiring—including many offering signing bonuses and other incentives—a worker is less likely to stay with a company if their employer closes, or if they aren’t satisfied with their pay or hours. So an employer may lose business, but that doesn’t mean their employees will be unable to work; they can simply find someone else who’s hiring.

Illness itself remains a major factor

Among these three patterns, the measurement of people not in the labor force who have been prevented from looking for work by the pandemic is the most complex, but this pattern also correlates closest to the number of Covid cases. 

The BLS survey asks whether “the coronavirus pandemic” has prevented people from looking for work, but that’s a category broad enough to cover any number of motivations. There’s no way to know which of these reasons motivate the survey’s respondents, but here are three possibilities:

1. They’re sick. This would be the simplest explanation. If you’re experiencing symptoms and focused on recovery, you physically aren’t capable of looking for work, much less clocking in. This might also include people suffering from long-term symptoms: The Brookings Institute has reported the possibility that “long Covid” might account for 1.6 million missing workers in the labor force. If that many people returned to work, they would fill 15% of the country’s 10.6 million job openings.
2. They’re worried about getting sick. Over two years after the first cases were reported in the US, the possibility of coming down with the virus is still a scary one—a Monmouth University poll from late January showed that half the public was either “very” or “somewhat” concerned about catching one of the new variants.
3. They’re taking care of people who are sick. One person’s illness affects everyone they interact with, and especially those closest to them. Last month, the Federal Reserve’s Monetary Policy Report showed that caregiving has been one of the most significant factors dragging down the labor force participation rate over the past year, second only to retirements. Most of the increase came from nonparents, suggesting that working-age adults are leaving the workforce to care for their elderly relatives. School closures may also fall under this category—if children are at home instead of in class, many parents need to look after them instead of looking for work. 

So what can we expect? 

If these numbers rise, it may reflect the last surge of the Omicron variant, continuing a pattern seen with the small uptick in January 2022. 

But that isn’t likely. As case numbers continue to fall, most of these metrics should be expected to fall with them, indicating a move toward a post-pandemic dynamic in the workforce—one defined by remote work, flexible employment, and scarcity in the labor market.

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