Unemployment and the hiring shortage: Will workers truly recover from the Covid economy?

Part of the Recovery Issue of The Highlight, our home for ambitious stories that explain our world.

Working at a big-box pet-supply store was never easy. The job involved washing, grooming, and styling often anxious dogs, as well as pacifying their equally anxious owners. The hours could be long, the schedule unpredictable. But for nearly five years, Zoe Hoffeld managed.

And then the pandemic hit. After closing for a couple months in spring 2020, the dog salon in Cambridge, Massachusetts, reopened. Understaffed, the store pressured Hoffeld, who uses they/them pronouns, to bathe or groom upwards of seven dogs a day, in addition to scheduling appointments and making reminder calls.

The safety precautions were lackluster to nonexistent. What’s more, the AC didn’t work; neither did the pipes, which caused the bathroom, as well as the area where dogs were washed, to regularly flood. A plumber was called in, but the recommended fix — shut down the location for a week to address the problem — went unheeded.

And then there were the customers, whose expectations — against the backdrop of a deadly pandemic — took on a surreal quality. Hoffeld could put hours into a single dog haircut, and have an owner respond with dissatisfaction. While most clients were understanding, others demanded fluffy perfection. “We’re human,” Hoffeld says. “We try our best and do our best but ultimately our job is to make the dog comfortable.”

At the end of a shift, “I’d go home, eat dinner, and fall asleep because I was so tired. I didn’t have the energy to do anything else. All my energy was put into work.” They were exhausted. In June, after expressing concerns about the conditions and their pay to the store supervisor to no avail, Hoffeld reached a breaking point.

So they quit.

At the onset of the pandemic, employers and consumers alike fell over themselves heralding so-called essential workers, the often low-paid individuals who didn’t have the luxury of sheltering in place.

The message only briefly obscured a harsher reality. Covid-19 amplified “the uglier side of the business,” says Nick Bunker, an economic researcher at the jobs site Indeed. Employers were quick to enact layoffs — by April 2020, the unemployment rate had skyrocketed to 14.8 percent. Those who kept their jobs had to contend with increased demands; after losing coworkers to cuts, furloughs, resignations, sickness, and death, employees took on heavier workloads, all while serving an emotional, sometimes downright belligerent public.

This played out across industries: In the first few months of lockdown, grocery stores faced labor shortages as panicked shoppers ravaged shelves; this spring and summer, freshly vaccinated diners overwhelmed understaffed restaurants and bars; and then there are the airlines, which haven’t been able to rehire fast enough to meet the rising demand in domestic travel, resulting in cancellations, delays, and lost luggage.

It’s a frustrating loop of layoffs, labor shortages, and overwork that has fallen squarely on the shoulders of workers already on the front lines of the pandemic.

A year and a half in, that collective weight has resulted in what economy-watchers are calling the Great Resignation. From April to the end of July, nearly 16 million Americans quit their jobs, a historic number. The mass exodus is particularly stark given how quickly it follows one of the largest recessions in US history. That didn’t stop about 4 million people from quitting their jobs in July alone, a sign of optimism — if they leave, they can find something better — in the face of what’s shaping up to be a prolonged recovery.

A “now hiring” sign is displayed at a fast food chain in June in Los Angeles. An exodus of workers this spring and summer highlights two truths: Workers have optimism about their prospects, and they’re experiencing unprecedented dread about their current jobs.

Alongside confidence, however, there’s a pervading sense of mental and physical fatigue. “For a lot of people, it’s been traumatizing,” says Chris Tilly, director of UCLA’s Institute for Research on Labor and Employment. In the first 10 months of the pandemic, essential workers in California experienced a 30 percent increase in deaths, according to an analysis of public health data. Specific jobs, including in health care, meatpacking, retail, and restaurants, were hit especially hard.

At a single Smithfield Foods plant in South Dakota, 1,294 workers got sick. Four died. In the first year of the pandemic, New York City lost at least 136 transportation workers to Covid-19. Particularly in the beginning, when cases were skyrocketing and so much remained unclear about transmission, work presented a hellish choice: Go in and risk exposure, or stay home and forgo a paycheck.

Employers have blamed expanded unemployment benefits for people’s reluctance to go back to work, but even in states where job benefits were cut early, workers failed to return to their old jobs. (After months of strong job growth, there are already troubling indicators ahead — employers added just a third of the projected number of jobs for August, a sign that the delta variant is interfering with the economic recovery.) People are tired and demoralized. Many are also recovering from overlapping categories of trauma. Alongside the primal pain of losing someone to Covid-19, there is the emotional and physical grind of showing up every day to a high-stress, understaffed environment where safety measures aren’t consistently enforced.

That was Amanda F.’s experience, anyway. (She asked that her last name not be used as she’s about to start a new job in the industry and is concerned about professional fallout.) A pharmacy technician since 2012, she liked her job, for the most part. The pandemic changed that. The workload increased abruptly — she was tasked with facilitating Covid-19 tests in addition to filling prescriptions — as the number of employees dwindled. Some shifts, it was just her and a pharmacist.

The pace was unrelenting. Rushing to fill backlogged prescriptions, she’d hear, “Pickup, lane one,” and have to dart over to the drive-through window. Meanwhile, “The phone is ringing; there are nine phone calls in the queue,” she says. “It’s just me and a pharmacist, and I’m saying, ‘How are we supposed to do all of this? All I feel like doing is crying and walking out.” Customers, frustrated by the long wait times, could be impatient, sometimes outright hostile.

The anxiety began to manifest itself physically. Amanda started eating lunch a couple of hours before she left for a closing shift; if she ate any later, she says, she risked throwing up the meal while at work.

Like Hoffeld, Amanda was exhausted, not just by the work but also the lack of understanding or compassion from customers. In September, she quit too.

Typically, leisure, hospitality, and retail have the highest quit rates, Bunker says. It’s not surprising: The pay is typically low, the turnover high. These sectors have seen the largest proportional increase in quit rates compared with those before the pandemic. As with the broader economy, the recession and subsequent recovery have taken an existing trend in these sectors and amplified it. People in low-wage jobs are quitting in search of higher pay and benefits — as well as relief from extended periods of overwork. “If you don’t have enough coworkers, there is presumably a period of time where you can pick up that slack,” Bunker says. “But after some time, you are going to realize you need backup.”

More work for the same pay is not a recipe for retention. While employers categorize the tight labor market as a labor shortage, that’s a misnomer, says Françoise Carré, research director of the Center for Social Policy at the University of Massachusetts Boston. “When you hear employers saying, ‘I can’t find workers,’ they can’t find workers for the wages they’re willing to pay right now,” she says.

There are signs that pay is trending upward. A number of Fortune 500 companies, including Costco, McDonald’s, Amazon, Chipotle, Bank of America, and CVS, have announced plans to raise the starting or average pay for hourly workers. Meanwhile, the average wage of restaurant and supermarket workers recently surpassed $15 an hour for the first time, a milestone that some workers have been lobbying for since 2012.

Employers — notably, bigger companies with the resources to enact these changes quickly — are also adding benefits, including paid time off, sick leave, and tuition reimbursement. Target recently said it will cover tuition at select undergraduate programs for part-time and full-time front-line workers. This follows Walmart’s announcement in July that it will cover tuition and book costs for all its employees.

In addition to more money, workers are able to shop around for roles that are a better fit. Amanda is slated to start a new pharmacy technician job at a different company later this month.

The pay is slightly higher ($19 an hour versus $18.55), but the real advantage is that the location is closed-door, which means she won’t have to interact with customers.

Grocery workers in Long Beach, California, protest in February after their employer closed stores rather than pay city-mandated hazard pay during the pandemic.

Demand and the high quit rate have made the field slightly better for job seekers and workers over the past few months. But it’s important to put wage gains in context, says Enrique Lopezlira, the director of the low-wage work program at the University of California Berkeley Labor Center. Even with higher starting pay at large companies, “We’re still looking at people making between $26,000 and $30,000 a year, which is not that great.” Many low-wage jobs not only lack health insurance, sick leave, and fixed schedules, they are also physically and emotionally taxing. “People settled for that, but they weren’t necessarily thrilled with those jobs,” UCLA’s Tilly says.

This is true for essential workers, as well as for entry-level workers hoping to break into white-collar professions. After receiving a master’s degree in communications in May 2020, Maggie, 30, who asked that her last name not be used so as not to risk her current position, sent out more than 60 applications for jobs in her area, but steady work remained out of reach. “I was applying to all levels of jobs,” she says. “Jobs I thought were quote-unquote ‘above’ my skill level, jobs below my skill level, anything that had to do with communications.”

A year after graduating, she was hired as a contract legal assistant to a personal injury attorney in Wisconsin. The office job involves some writing. And there’s a reliable, if modest, paycheck (though no benefits or sick leave). Beyond that, it’s hard to come up with many positives. She’s on the phone with clients all day, most of whom are checking on the status of their cases. “We have people that will just call in and cry,” she says. “People have had shit years.” Sometimes they take it out on her. “It can be as bad as it was when I was waitressing,” she says.

Worse than that is the feeling that work is sucking the life out of her. Her dream is to one day support herself through writing, a practice she tries to maintain. But after a full day spent typing on a computer, “When I get home, I don’t want to do it for myself,” she says. “It’s kind of like you are giving up your soul — like a vampire. I’m giving up everything for a job that I don’t even like, that I’m not even passionate about.”

Maggie continues to hunt for better job opportunities, but the available pickings for her location and experience level remain slim; without another offer lined up, she can’t quit, even though she wants to. “It’s either this or not knowing how I’m going to pay my rent or bills,” she says.

While retail workers have more immediate options, leaving a job for a better-paying one isn’t always easy or even possible. A vast swath of low-wage jobs don’t offer predictable hours. Shifts fluctuate wildly from week to week, often with little or no notice. For anyone with responsibilities outside work — children or relatives to take care of, classes to attend, or simply social commitments — it’s not a sustainable model. Sure, the local CVS or Target might pay more, but if the available shifts don’t work with your schedule, it’s not a feasible option.

There’s also the matter of getting to work in the first place. The nationwide affordable housing crisis means workers must spend more time commuting, a reality that’s not just time-consuming but expensive as well. (In 2019, the average one-way commute in the US reached an all-time high of 27 minutes. For workers who take public transit, that figure goes up to 46 minutes.) The opportunity cost of a longer commute versus the advantage of slightly higher pay doesn’t always level out.

That’s the case for Mendy Hughes, 47, a cashier at a Walmart in Arkansas and a member of United for Respect, a nonprofit fighting for better conditions and pay for retail workers. She’s been at the company for 11 years and makes just $11.85 an hour. The past 18 months, she says, have been grueling. On many of her shifts, the store was understaffed, either because coworkers were out with Covid-19 or because the chain has struggled to hire and retain employees. Often, there aren’t enough people to adequately assist customers. “They’re stressed, we’re stressed,” Hughes says, an emotion that frequently curdles into anger directed her way.

At the end of a shift, “I’m just relieved it’s over,” she says. But Hughes doesn’t plan on leaving, even though she could make more at another big-box retailer. Her commute is a five-minute drive. Working somewhere else would require a more reliable car, something that’s not in the cards right now.

There’s also no guarantee the additional money would last. The retail industry, which has passionately fought attempts to raise the federal minimum wage from $7.25, is predicated on a model of cheap prices at the expense of higher salaries or benefits. While hourly wages traditionally go up when labor is in short supply, the “downside is, it’s cyclical,” Tilly says. “Once labor becomes more plentiful, [employers] let those investments slide, you let inflation eat away at the value of those wages.”

A West Village eatery. Manhattan’s restaurants struggled with a labor shortage in the months after the city slowly began reopening restaurants.

“The labor shortage giveth, and the end of the labor shortage taketh away,” Tilly says.

The result is a system that requires flexibility and promptness from workers but fails to provide any of the structural support that would enable them to realistically meet these demands. The onus rests with the individual, an expectation that allows employers to abdicate responsibility. This was true before the pandemic, but Covid-19 placed systemic problems in sharp relief. Workers were expected to show up every day and risk their health for far less than a living wage, without the support of child care or benefits. What was a raw deal before became, for many, untenable.

Hoffeld experienced this dynamic at the company level. Their employer didn’t provide hazard pay, benefits, or even, at times, working AC and plumbing, but still expected them to show up, without complaint and with a smile, for $16.75 an hour.

For Maggie, the past year and a half has affected her in ways she’s only started to unpack. After graduating, she lived off unemployment for stretches, an experience that sparked something of an identity crisis. “We are very indoctrinated to believe that a lot of our worth is in productivity,” she says. “Not having a job, I had a very difficult time. I felt like I was doing nothing, like I was participating in nothing. It was really hard for me to relax.”

But where she now finds herself may be worse. In exchange for a job that (barely) covers her bills, she feels like she’s handed over her soul. Days are shaped by the ebb and flow of dread. Mornings are bad; upon waking, she confronts the yawning hours of phone calls that await her at the office. She’s tired before she leaves the house.

It’s a hamster wheel that’s equally exhausting and motivating. Mentally drained at the end of the day, she forces herself back online to job-search. This isn’t what she wants long term.

For Amanda, the pandemic has been more clarifying. After quitting, she vowed never again. The next time she changes positions, she has a list of questions to bring to the interview:

“What’s your turnover rate like? What do you do for short-staffing situations? How do you ensure the safety of not only your technicians but also your customers?”

The price was steep, but Amanda now feels a greater sense of control over her career. She has a better grasp on what she’s looking for and, just as important, the conditions she will no longer tolerate. The strong quit rate indicates she’s far from alone, even if the long-term impact is still up in the air. If demand from employers falters, workers might be forced to renegotiate what, exactly, they are willing to put up with.

For her part, however, Amanda isn’t compromising. “I can’t get back into this situation,” she says.

Laura Entis is a former editor at Fortune and former staff writer at Entrepreneur magazine. She previously wrote about the reckoning for small business amid Covid-19 and the effects of Zoom and other communication technology on loneliness for The Highlight.

This story has been corrected to reflect that the dog salon where Zoe Hoffeld worked was in Cambridge, Massachusetts.

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