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3 reasons Americans are ready to go back to work, according to Biden’s labor secretary

A man speaks with a woman about openings at a bakery at the Employers Only Long Island Food, Beverage and Hospitality Job Fair on October 19, 2021 in Melville, New York.

Bryan R. Smith/Getty Images

  • January was a good month for American jobs, with the country adding 467,000 jobs.
  • The latest data also showed that December and November weren’t as bad as originally thought.
  • Labor Secretary Marty Walsh said people came back to work because of positive developments related to money and childcare.

Economists — and the White House — were forecasting yet another dreary month of recovery in January. Instead, the latest jobs data revealed a surprisingly bustling economy.

In January, the country added 467,000 nonfarm payrolls, according to the Bureau of Labor Statistics. Revisions to data from prior months showed 709,000 more jobs added in November and December than originally reported.

“I think what we’re seeing in the increase in jobs the last three months is businesses and workers adapting to working with the Omicron variant,” Secretary of Labor Marty Walsh told Insider. “I think we all assumed that people weren’t going back to work because of the variant.”

Instead, the numbers tell a different story. Even as cases from the Omicron variant surged across the country, businesses were adding jobs at a fast clip — a pace that, if maintained, would mean the labor market could fully rebound by July. The report showed that Americans were reentering the workforce, and, as Walsh noted, potentially adjusting to a new normal propelled by new pandemic conditions.

One labor market issue has lingered throughout the whole pandemic: Low labor force participation. That tracks people who are working or actively looking for work — and many Americans have opted to stay on the sidelines for months. But labor force participation picked up at the end of 2021 and early 2022. Walsh broke down three reasons that Americans may have gone back to work in January.

Pandemic savings are dwindling

“Middle class, low wage workers, low wage earners don’t have the ability to be able to sit at home for six months,” Walsh said. “They don’t have that savings account.”

The New York Times reported in December 2021 that the increased savings people socked away during the pandemic were beginning to dwindle, and could perhaps fade entirely by the start of 2022. It seems like that may have happened.

“I think that a lot of people are seeing their savings begin to be depleted, and I think that at some point we know people have to go back to work that might not have been,” Walsh said.

Jobs are paying more

As workers see their savings dwindle, there’s another economic trend that’s still on the rise: Getting paid more.

January also saw higher than expected wage growth. Wages grew 5.7% year-over-year, continuing a trend as employers try to lure in new workers. Americans have also been quitting at near-record rates for months as hiring booms, suggesting switches into higher-paying roles.

For example, Walsh said it was predicted that jobs in hospitality would fall because of the variant. Instead, the sector added roles. It’s not a coincidence that the industry has seen hourly wages grow by over $2 year-over-year. 

“I think people were thinking beforehand, why would I work in a restaurant in fear of catching the virus and being paid lower wages? Meanwhile, when you have the ability to earn better wages, it incentivizes you to go back into those areas,” he said.

Families got settled in school

“Parents felt comfortable that school wasn’t gonna be canceled, even though we’ve seen an increase in the Omicron variant,” Walsh said. “For the most part school stayed open, so there’s some consistency there.” 

That shows a need to continue to invest in childcare, Walsh said. “That’s one of the biggest issues, pre pandemic, that kept people out of the workforce, particularly women.” Childcare — or lack thereof — has emerged as a driving factor of labor shortages, as parents leave the workforce to deal with precarious care situations amidst an ever-evolving pandemic.

“Really focusing on childcare and adult care is gonna be key, I think, for the future of America, not just pandemic time, but post-pandemic time,” Walsh said. 

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