Tag: job

John Mahalis of Philadelphia was two and a half months away from acquiring his pension when he learned he would be permanently terminated from his job as a toll collector on the Pennsylvania toll highway. The news was a punch; Mr Mahalis said this would leave him less able to survive financially in retirement.

“It came out of nowhere,” said Mahalis, 65. He had worked for the toll motorway for five years after 20 years of unemployment due to an injury he suffered as a dock worker. He had loved the job, especially interacting with customers, and made a lot of money: by taking as much overtime as he could, he was making around $ 53,000 per year, plus benefits.

“It was the best thing I have ever done,” he says. “I felt like a man again.”

The work evaporated overnight when the Pennsylvania Turnpike Commission, struggling during the coronavirus pandemic, decided in June to scale up its plan to lay off nearly 500 toll workers and replace them with an electronic toll . Rather, layoffs slated for early 2022 took effect immediately, a move the commission said would help the system financially adjust to lower traffic during the economic downturn.

The United States may be witnessing the edge of a workforce reshuffle that often occurs during recessions: Employers who have been forced to downsize are turning to existing or new technologies to keep up with the job. less labor. But this time around, the change could be amplified by a wave of forced layoffs early in the pandemic and the fact that in some cases demand has returned before employees can safely do so.

This has created a great incentive for employers to figure out how to produce more with fewer workers, thanks to new technologies that allow for greater automation.

Layoffs have shifted from temporary to permanent as the pandemic drags on, and many workers have moved out of the labor market as service jobs in particular – everything from conference centers and hotels to tolls – are being reduced or streamlined. It is not known how quickly workers facing layoffs will find new jobs that are good substitutes in terms of skills and wages.

“We’re learning that technology can replace people even more than we thought, and part of it is happening,” Federal Reserve Chairman Jerome H. Powell said at a press conference last week. “We’re always going to have to keep in mind those people whose lives were disrupted because they lost the work they were doing.”

The adoption of technology can lead to faster productivity growth – or at least a one-time rebound – that could improve the economy’s potential. But it can be difficult for laid-off workers to access new jobs that are also remunerative and match their qualifications.

“This story is not new,” said Nela Richardson, chief economist at ADP, the payroll company. “There was always a question of what to do about those left behind by technology and globalization that was never answered.”

The Pennsylvania Turnpike is a striking example. Its workers knew the machines would eventually make them obsolete, but they believed they would have time to prepare.

Faye Townsend, 50, was on probation at the toll highway administration building, taking a job that she hoped would lead to even more secure employment before the switch to cashless tolls. When the coronavirus crisis began, she was returned to the road network but was not allowed to enter the tollgate. Instead, she and her colleagues spent worried days clocking in, sanitizing the building, and waiting to find out if and when they could return to collection.

At the start of the summer, they were told their jobs were gone.

“They had assured us that ‘your jobs are not in jeopardy’ and it looked like a betrayal of a relationship you would like to believe you can trust,” said Ms Townsend, who worked at the toll highway. for seven years. and lives in Mount Joy, Pennsylvania. “There are jobs there, but the pay isn’t that competitive, and I’m a little scared to take anything.

The Pennsylvania Turnpike Commission maintains it had the power to switch to automated tolls and layoffs before 2022, and it is trying to help its displaced employees find new jobs, a spokesperson said.

If there is good news for displaced workers in the United States, it is that the Fed knows they will likely take time to return to the workforce. During the last economic recovery and expansion, central bank officials thought they knew roughly where full employment was: somewhere around an unemployment rate of 5%. Around the time that unemployment fell below this, officials began to raise interest rates to slow lending and spending, fueling the economy to slow hiring and ensure that it does not overheat.

This time around, Fed officials are prepared to think more holistically about what the job market is capable of achieving and not rush to raise rates. Mr Powell announced in August that the Fed would focus on the “shortfalls” of full employment rather than the deviation, suggesting it would be comfortable with what it would previously have treated as a hot labor market.

Patrick T. Harker, chairman of the Federal Reserve Bank of Philadelphia, specifically mentioned the toll highway workers in his state as an example of the type of lingering weakness in the labor market that policymakers should watch out for.

“I expect that, as we recover, the economic situation will remain uneven, with extremely uneven outcomes across sectors of the economy,” he said last month. Changes in consumption could disrupt the business travel industry, he said, displacing people who had worked in hotels and conference centers.

“I would like to challenge us all to seriously think about ways to ensure that the coming recovery is not only strong but fair,” Harker said.

It’s unclear how big the labor market reshuffle will be this time around. For one thing, unemployment fell faster than many economists expected, falling to 6.7% after peaking at 14.8%. But it’s still high: Taking into account people who have left the workforce, Fed officials regularly suggest unemployment may have been around 10% in December.

In Europe, around 55% of employers plan to employ fewer people in the long term than they would otherwise have after the pandemic, according to a recent European Central Bank survey of 72 large companies in its currency bloc. This seems to reflect that “firms have learned to maintain production despite restrictions on labor inputs due to social distancing,” the authors wrote.

It is difficult to say to what extent companies come to a similar conclusion in the United States. And it doesn’t matter what kind of jobs are lost. If people lose their jobs in fields with transferable skills and work structures, it may be easier for them to find new jobs. If they are highly specialized, it might be more difficult.

“It’s not easy to make a complete career change mid-career,” Powell said last week. “It would be wise, as a country, for the longer term productive capacity of the country, to look after these people and help them regain their place in the labor market, even if that means continued support during a additional period of time. “

If a significant number of Americans find themselves excluded from work, it could mean that some, like Mr. Mahalis, will leave the workforce for good. The loss of workers costs the economy room for potential growth. And with less income, those like Mr. Mahalis could spend less, creating an unfortunate loop.

Others, like Ms. Townsend, might need to retrain. Although she has a bachelor’s degree from Indiana University in Pennsylvania, she is concerned that it may be out of date. She said she thought about getting her commercial driver’s license or going to school for medical coding.

But for now, Ms. Townsend is mostly hoping that she will be called back for some sort of work on the roads of Pennsylvania.

“Part of me still hopes that I could be one of those who will be called back,” she said. “I thought I would retire with the toll highway.”

Ben Casselman contribution to reports.