Workforce Impacts as Federal Pandemic Unemployment Benefits End

by Gail Krumenauer

October 5, 2021

The federal pandemic-related unemployment benefits expired over Labor Day weekend in Oregon. About 81,000 people in Oregon saw their Pandemic Unemployment Assistance (PUA) benefits or Pandemic Emergency Unemployment Compensation (PEUC) benefits end as those programs expired.

Whose Benefits Ended?

More detailed location and demographic information shows that of the 81,000 whose benefits ended, about 49,000 people had PEUC claims. About 32,000 Oregonians had their PUA benefits expire.

Geographic information available for 78,000 of these 81,000 people show which areas of the state had the biggest impacts of these programs ending. The numbers of workers with benefits ending is standardized by comparing it with the size of each county's labor force. The labor force includes the number of people in an area who are either working, or unemployed and actively seeking work, and available and able to take a job.
Statewide, those with PEUC benefits ending made up about 2% of the labor force. By county, the highest share of the labor force losing PEUC benefits (3% in each) occurred in Curry, Josephine, Lincoln, and Multnomah counties. Those with Pandemic Unemployment Assistance (PUA) benefits ending also made up another 2% of the state’s labor force. By county, the highest share of the labor force with PUA benefits ending (3% in each) occurred in Coos, Curry, and Josephine counties.
The end of the federal pandemic unemployment programs had slightly more impact on women than on men. Prior to the pandemic, women made up 47% of the state’s labor force. As the PEUC benefits expired, women had 52% of those claims. Women also had a slight majority (51%) of the PUA claims as the program drew to a close.

For those whose PEUC claims ended, we can also look at their main industry of employment before they lost their jobs. This information isn’t available for PUA claimants, because four out of five whose benefits ended were self-employed and not working for a payroll employer before the pandemic. Among claimants whose PEUC claims ended, those who mainly worked in accommodation and food services before unemployment were the largest group of workers and accounted for an outsize share of PEUC claims ending. About 8,400 (17%) of the PEUC claims that ended were from workers primarily in restaurants, hotels, or bars before they lost their jobs. By comparison, workers in this industry made up 8% of the state's pre-pandemic labor force.

Will This End Worker Shortages?

There’s been some general expectation that the end of federal pandemic unemployment benefits would also mark the end of recent labor shortages in Oregon and across the U.S. But even after these benefits ended, it's still likely to be difficult for employers to hire as much as they'd like to in the coming weeks and months.

Although not strictly comparable, total nonfarm payroll employment shows the gap to full jobs recovery by industry. Back to the accommodation and food services example: the industry was still 35,000 jobs below its February 2020 total nonfarm job level as of August 2021. So even if every one of the 8,400 workers who mainly had jobs in Oregon's hotels, restaurants, and bars before the pandemic went back to the same industry after unemployment benefits ended, that would account for 24% of the gap to full recovery. If you ran through this same kind of possible scenario across other industries, there would still be notable gaps in manufacturing, education, and health care too. By contrast, the recovery gaps would appear to be filled – if workers returned to their main industries of pre-COVID employment – in construction, wholesale and retail trade, and administrative and waste services.
We can also compare the potential return to workforce from people whose benefits ended to current hiring demand in Oregon. Private employers had a record 98,000 job vacancies at any given time between April and June. In each workforce region of the state, even if all the Oregonians whose PEUC benefits ended were able to match to a job vacancy in their area, it would still leave notable shortfalls compared with regional hiring demand.

There are still the 32,000 people whose PUA benefits ended too. As the program drew to a close, four out of five of these workers were self-employed. Although they might make the switch to a payroll employer, many who were self-employed may be re-starting their businesses instead. If you did add the PUA claimants whose benefits ended into the workforce available to payroll employers, they would still account for less than half of the job openings employers want to fill in Northwest Oregon or Eastern Oregon, it would only be slightly more than half in Southwest Oregon or the East Cascades area. The effects would be more substantial in Portland, the mid-Willamette Valley, and Lane County.
Beyond Benefits: Other Worker Concerns

Again, all of that is premised on the idea that all unemployment claimants whose benefits ended – even the self-employed – would transition to a payroll employer. That also assumes a strong geographical and career match between those workers and hiring employers in the area. However, states that ended their pandemic unemployment benefits early did not see that immediate return of all those workers into payroll jobs.

In the states that ended the programs in June and July, only one out of eight of those workers was back on the job by early August. That speaks to other factors – such as schools re-staring in-person instruction and the ongoing pandemic – as being critical to workers’ ability to take jobs. Oregon's K-12 schools and universities have been bringing students back on campus in recent weeks for in-person learning, after 18 months of being mostly physically closed. At the same time, early September brought the peak in the delta variant wave of COVID-19 cases in Oregon. 

Prior to the pandemic, one out of six workers in Oregon's labor force lived in a household where all available adults worked, in a job that couldn't be teleworked, and with kids present in the household. The return to fully in-person school creates the opportunity for some of those parents who might not have been able to take an in-person job to rejoin the workforce. We know that COVID itself is a barrier still keeping some workers from being able to take jobs. From April to June, there were 32,500 workers in Oregon who said they were prevented from looking for work due to COVID-19 related reasons.

Both the return to fully in-person school and the ongoing pandemic could also notably affect the workforce. Nationally, the Census Household Pulse survey shows that between the second half of August and the first half of September, the number of people who said their main reason for not working was due to caring for children who weren’t in school or day care dropped by 2.7 million. At the same time, the number of people in the U.S. who said the main reason they weren’t working was because they had COVID-19, or were caring for someone with COVID-19, rose by 2.0 million.

Oregon’s Tight Labor Market Continues

The return of fully in-person instruction, the ongoing pandemic, and the end of federal pandemic unemployment benefits will each have impacts on workers and businesses. Immediate and short-term effects from these large shifts will play out over the coming months. In the meantime – and beyond – employers will still face hiring challenges. An unemployment rate that has dropped below 5%, job gains occurring at a record pace so far in 2021, and hiring demand still at record highs spell an ongoing tight labor market in Oregon.


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