COVID-19 ushered in a new normal for many American workers and workplaces. Now, as the nation regains some of the jobs and employment stability lost during the pandemic, states are poised to create a stronger, more equitable recovery.
Policymakers Play Vital Role
Two different workforces emerged early in the pandemic: those who could work from home and those who could not. Many lower-paying jobs, such as those in the service and food sectors, could not be done remotely. Those jobs tend to yield lower wages and are predominantly held by workers without college degrees and by women of color. Jobs that require a higher education and that provide higher pay also tend to offer greater opportunities for telework.
But remote work comes with its own challenges, especially as more offices start to reopen. As states look to strengthen their economies in the wake of the pandemic, policymakers will play a vital role in the outcomes for both workforces and in finding ways to support them in future recessions.
Making Home Work
Before the pandemic, roughly 7% of private industry workers in the U.S. regularly worked from home or another location outside the office. Even fewer workers in state and local government jobs had access to remote work. By May 2020, the number jumped to over one-third of U.S. workers, or 48.7 million people—about the number of workers employed in jobs that can be done remotely. In response, at least six states enacted legislation expanding telework to public-sector employees, and 37 states introduced legislation addressing internet and broadband access for rural and underserved communities.
“As one of the most rural states in the country, we have had a big digital divide,” says Mississippi Senator Joel Carter (R), who sponsored broadband legislation in the 2020 and 2021 legislative sessions. “Having more broadband is a huge opportunity for us (to attract) more businesses.”
Having more broadband is a huge opportunity for us (to attract) more businesses. —Mississippi Senator Joel Carter
For the most part, the global experiment with remote work has been a success, despite some notable downsides. Numerous surveys have shown more than 75% of employers and employees having positive attitudes toward remote work, an increase from early in the pandemic. Productivity during the pandemic jumped by 5%, according to a study by the National Bureau of Economic Research. At the same time, a recent global study by the Harvard Business Review notes that 56% of remote workers are coping with burnout and isolation. Many employees believe that remote work has come with an increase in job demands and blurred lines between work and home life. A Microsoft report found, on average, remote workers are spending an extra hour a day connected to their computers than before the pandemic.
As U.S. vaccine distribution increases and COVID cases continue to decline, a return to the office looms large. Employees and employers alike are looking to flexibility and hybrid models. Workers with families, especially those with young and school-aged children, find flexible hours particularly appealing.
Surveys and polls suggest that about two-thirds of workers will be offered a hybrid work model, while half that number will be back in the office full time and a smaller percentage will be fully remote. Hybrid approaches that let employees choose when they work in the office and when they work remotely are likely to become common, if not prevalent. And these changes are not restricted to the private sector. In a survey of leaders in 38 state legislatures, about one-third indicated that legislative staff would continue working remotely, another third planned to have staff return to the office and the final third said they were developing hybrid work models.
In recent years, policymakers in Maine, New Jersey, Tennessee, Utah and Washington have expanded telework to state employees through legislation or pilot programs, opening state jobs to a more diverse workforce, including those with disabilities who might need telework accommodations. In the months to come, many employers will face the task of balancing in-person collaboration time with the need for flexible employee schedules.
When Remote Is Not an Option
Not all workers were able to move their workplaces to their homes or other locations. Those in essential businesses, particularly the service industry, found themselves losing their jobs, working reduced hours or being asked to work at the risk of getting sick. Roughly 18 months later, some jobs have rebounded and unemployment numbers are falling. But millions of people—many of them young, female, and Black or Hispanic—remain unemployed.
In April 2020, the unemployment rate hit an all-time high of 14.4%. Over 20 million people became unemployed because of the pandemic, substantially more than the 8.8 million people who lost jobs during the 2007 Great Recession. This economic downturn has differed from others in that it disproportionately impacts women, people of color, those with less education and young adults—often workers in the hardest-hit service industries of food, travel and hospitality. Prior recessions have had a greater impact on the financial or manufacturing sectors, primarily staffed by middle-income male earners.
Adding to the declining workforce, women tended to leave jobs early in the pandemic to address child care needs brought on by closed day care facilities and the shift to remote schooling. U.S. Census Bureau research found that in March and April 2020, 3.5 million mothers with school-aged children left “active work.” Some exited the labor market or lost their jobs, while others took paid or unpaid leaves.
By January, however, half those working mothers had jobs. White women, especially, have regained jobs, putting their unemployment rate, about 5%, on par with that for white men. That is not the case for Black and Hispanic women, for whom unemployment rates remain at 9.2% and 8.8%, respectively. Those numbers do not consider women of color who left the workforce and are not actively searching for work, which would make the figures much higher.
Even as hourly earnings are on the rise—up 0.7% in April—and many employers and business leaders are bemoaning labor shortages, job growth has remained sluggish. It is likely that even as jobs return, workers remain hesitant to take them, whether out of fear of COVID variants, continued child care and remote schooling needs or, some argue, a reliance on expanded federal benefits, which are set to expire in September.
States Leading the Employment Recovery
Economic data shows that income inequality widened during the long recovery from the Great Recession. New unemployment numbers reveal that inequity in the labor market has reached higher levels during the ongoing coronavirus recession. To accelerate the current economic recovery, states are considering policies that will not only help their economies bounce back but also address increasing disparity in the workforce and seek solutions to reduce it.
Creating inclusive job training programs, thereby ensuring historically underrepresented communities have access to apprenticeship and work-based learning, is one way states are tackling this problem. These paid programs can lead directly to full-time positions in a skilled profession. This year, New Jersey is considering a bill that would bolster the number of minority group members and women in the construction industry by providing on- or off-the-job outreach and training programs. The legislation would require the state to charge companies receiving public contracts a fee that would be used to fund programs to prepare women and people of color for entry into apprenticeship programs for long-term employment in the construction trades.
Oregon is similarly considering legislation requiring subcontractors on public improvement projects to encourage minorities, women, low-income individuals and service-disabled veterans to become apprentices. And in Maryland, the General Assembly considered a bill that would establish the Fossil Fuel Community Transition Fund to support the state’s transition to clean energy. Half the fund would be allocated to worker training, including apprenticeship programs, pre-apprenticeship programs, youth apprenticeship programs, and worker retraining programs at the state’s historically Black colleges and universities.
Another strategy to promote equity: creating more access to capital for entrepreneurs from historically underrepresented groups. A major component of Minnesota’s Women of Color Opportunity Act, which lawmakers introduced this year, would create a loan program to provide capital for the startup, expansion and retention of small businesses owned by women of color.
Similarly, the Colorado General Assembly is considering the Colorado Startup Loan Program to provide loans and grants to businesses seeking capital to start, restart or restructure their operations. The bill requires the state’s Economic Development Office, Minority Business Office and other stakeholders to promote the program to businesses owned by women, minorities and veterans and to businesses in rural and underserved communities.
Finally, as the demand for health care workers skyrocketed during the pandemic, states responded by temporarily changing the way they regulate many of these professions. With a focus on recovery, states are examining what regulations and workforce policies may help ensure they have a robust health care workforce in the future.
There is no doubt the world of work is changing, and states, workers and businesses are finding ways to adjust. The office, once a place where productivity was measured in part by attendance, may instead become a collaboration zone, used only on certain days or at designated times. Technology that has helped us connect during the pandemic will remain with us and possibly open doors to new workers, offering flexibility in schedules and work locations. At the same time, those with jobs that cannot be done remotely may find new opportunities for upskilling and career advancement, or that safety nets are being created to protect workers from future recessions. Work will never be the same after last year, but 2021 can be the start of a course correction and the charting of a new—and, hopefully, better—way.
Suzanne Hultin is a director and Iris Hentze is a policy specialist in NCSL’s Employment, Labor and Retirement Program. This story first appeared in the Summer 2021 print edition of State Legislatures magazine.