Labor market conditions often follow the movements of the business cycle: Demand for labor rises during an expansion and falls during a contraction. So it’s not surprising that the COVID-19 recession has had an impact on firms’ hiring decisions and job posting trends. What might be surprising, however, is how the pandemic has affected the availability of jobs at different income levels.
The FRED graph here shows the impact of the COVID-19 downturn on job postings: Specifically, it covers the indexed trends on Indeed.com for three different wage tiers. (A previous blog post has more information on these data, if you’re interested.)
Middle- and low-wage occupations saw steeper declines in job postings early in the pandemic, plunging by 41.6% and 40.4%, respectively. Job postings for high-wage occupations didn’t decline as much, but they also didn’t recover as quickly: As of November 6, high-wage job postings were 17.3% below the 2019 trend, compared with 8.5% below trend for low-wage occupations.
These differences in hiring trends suggest that policymakers should take heterogeneity in labor market dynamics into account as they try to foster employment opportunities in a post-pandemic recovery.
How this graph was created: Search for “job postings index” on FRED, and the series should be among the top choices. From the “Edit Graph” panel, use the “Add Line” tab to search for and select the other two series.
Suggested by Praew Grittayaphong and Paulina Restrepo-Echavarria.
View on FRED, series used in this post: