The employment picture for 2022 remains cloudy thanks to mutations of COVID-19, most recently with the omicron variant. Since March 2020, prognosticators have tried to pinpoint when things would return to normal, or failing that, what the new normal would look like. While no definitive answers are available, pieces of the picture are starting to emerge.
Unemployment rates in San Antonio are not quite at pre-pandemic levels — which hovered at around 3% in early 2020 — but they are closer now, falling from double digits in April 2020 to just below 5% in October of this year. However, the nature of work and the types of jobs held by workers continue to undergo changes, causing a widespread reevaluation of work-life balance and the unspoken agreement between capital and labor. In many instances, underemployed workers have taken the opportunity to trade up to higher-paying jobs with better working conditions and benefit packages. Expect to see more of the same in 2022.
The types of jobs currently in demand both locally as well as nationally include higher and lower skill levels across several industry sectors. Among those are health care, construction, delivery services, IT application development, essential goods retailers, contact tracers, and telecommunications. These represent just some of the areas that have seen worker demand surge in the face of the pandemic. Other sectors such as restaurants, lodging, sports and concert venues continue to recover as well, though more slowly and unevenly.
COVID-19 and associated new working conditions inadvertently gave working folks the opportunity to reexamine their lifestyles. According to anecdotal evidence compiled by Richard Sifuentes, director of the UTSA Small Business Development Center, many gig workers prefer the ability to set their own hours, as opposed to adhering to a fixed schedule at a fixed location. The increased demand for delivery services, among others, has clearly boosted opportunities for these workers, but such jobs lack health care coverage and other important benefits.
The SA: Ready to Work program, the successor to the Train for Jobs SA initiative, to begin in early 2022 seeks to skill up San Antonio’s workforce in order to provide access to quality jobs. Analysis undertaken by UTSA indicates that lack of economic inclusion costs the city between $2 billion and $10 billion annually in gross metropolitan product. With an overall metropolitan product of around $132 billion, lack of economic inclusion represents a significant drag on overall economic output.
Some employers have responded to worker shortages in a more traditional manner by increasing wages, vacation time and sick leave. While the most visible examples locally are large companies such as Frost Bank and USAA, evidence suggests that smaller employers are taking similar steps. In the near term at least, workers enjoy greater leverage than in past years. How long that trend continues remains unclear.
Many legislators were reluctant to sign on to relief packages even in the early stages of the pandemic and legislation designed to provide additional relief to beleaguered workers stalled in Congress as pressure mounts to roll them back. These include the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in 2020, and the $1.9 trillion COVID-19 relief package passed in 2021, both of which seek to assuage the impact of the pandemic on workers.
Despite recent inadvertent gains by workers — the result of pandemic relief efforts — it’s worth noting that over half the employees in the U.S. still live paycheck to paycheck. This is especially true for residents of San Antonio, which lags in disposable income after living expenses per capita in every city in Texas except for McAllen.
Clearly, economic rewards have not been shared equally across society. For example, if the minimum wage had kept up with increases in productivity, as had been the case between World War II through the 1970s, it would pay more than $20 an hour. If the minimum wage had kept up with increases in senior executive pay, it would be north of $30 an hour, and if the base wage had kept up with Wall Street bonuses it would be over $40 an hour. These are eye-opening comparisons. While folks on the street may not necessarily be able to articulate these statistics, they certainly know that income increases have flowed primarily upward. The long-overdue conversation about the division of economic rewards has bubbled to the surface, now apparent for all to see.
If workers have struggled to maintain standards of living on the one hand, investors, on the other, have fared very well indeed. Large corporations invested significant amounts of cash into stock buybacks and dividends — in many cases, far in excess of earnings — something made possible only by Federal Reserve-fueled low-interest rates.
So, although investors benefited, workers fell further behind. In this unprecedented environment so favorable to investors and senior management, complaints regarding worker shortages at $7.25 an hour begin to ring hollow. The ongoing friction caused by widespread income and wealth inequality festering in the background for decades has been brought center stage by COVID-19.
For 2022, things could take a turn in any number of directions. The omicron variant promises to inject still more uncertainty into the economic picture for at least the first half of the year, perhaps longer. The possibility of another variant emerging looms large as well. Even more troubling, the next shoe could drop from some altogether unexpected quarter, delaying full economic recovery into 2023 or beyond. For now, we should hope for the best, prepare for the worst and, above all, get vaccinated and wear those masks. Since next year seems almost certain to hold additional surprises, planning for predictable events will better prepare us for those harder to forecast.