The missing workers who are never coming back

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June Zaccone

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Dec 18, 2022, 1:12:11 PM12/18/22

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The missing workers who are never coming back

Emily Peck, author of Axios Markets

Data: Federal Reserve; Chart: Rahul Mukherjee/Axios

Federal Reserve chair Jerome Powell struck a particularly somber note at his press conference earlier this week when he mentioned that one reason the labor market is so tight right now is that many workers died from COVID-19.

The big picture: Economists have theorized for a while about the impact of COVID deaths on the labor market. Now, research has started to emerge and key public figures like Powell are starting to talk about it explicitly.

"Close to a half a million who would have been working ... died from COVID," Powell said while talking about the U.S. labor shortage.
Go deeper: In a footnote to a speech he gave on Nov. 30, Powell estimates that 400,000 working-age Americans died in excess of what was anticipated pre-pandemic.

State of play: Compared to pre-pandemic projections, there are around 3.5 million people effectively missing from the American workforce, as Powell explained in that speech at the Brookings Institution.

This number includes older workers who left the labor force earlier than expected. "These excess retirements might now account for more than 2 million of the ... shortfall," he said.
The other 1.5 million comes from a decline in immigration and "a surge in deaths."
Overall, 1.09 million Americans lost their lives to COVID-19, according to Johns Hopkins data.

💭 Our thought bubble: The role these deaths play in the economy often gets overlooked, possibly because it's so devastating to contemplate.

But when considering the state of the U.S. workplace, it's worth remembering that many Americans lost colleagues, friends and loved ones over the past few years. It's a toll that will take many years to understand and lifetimes to grieve.