The number of Massachusetts workers counted as unemployed dropped by more than 250,000 over the past two months, a decline of more than a third that helped the state escape from a short streak of owning the worst jobless rate in the country.
About 114,000 more workers became employed in that span, too, a sign of continued steps toward recovery following the pandemic-related recession’s low point in the spring.
But the improving jobs numbers and unemployment rate likely mask deeper, more lasting damage at both the state and federal level: many people are dropping out of the workforce altogether, hinting that some – particularly women, who disproportionately fill caretaker roles – have given up attempts to find employment amid slow hiring and uncertainty about the COVID-19 health outlook.
“It’s a significant problem,” Federal Reserve Bank of Boston President and CEO Eric Rosengren said in a speech on Thursday. “The longer the pandemic goes on, the more you’re going to see people leaving the labor force, not only because they can’t find a job, but because they have to care for either elderly parents, people that are sick because of the pandemic, or children that are not able to go to school because schools have been closed and there is not availability of daycare.”
The trend, according to economist Alicia Sasser Modestino, indicates that the recent improvement in the state’s unemployment situation might be “not as rosy as it might seem.”
Between January and August, the working-age population in Massachusetts grew 13,400, according to data published by state labor officials based on a household survey. In that same span, the labor force – which counts both people who are employed and those who are unemployed but actively seeking work – shrunk by 290,000.
The drop was not limited to the earlier days of the COVID-19 crisis, when job cuts were severe. In July and August, a span in which the employed population grew and the unemployed population shrank, the labor force declined by 138,500 – more than the 114,000 jobs added.
While both Massachusetts and the country as a whole have seen workers depart the market, the trends have taken different patterns.
Nationally, the rate of working-age adults participating in the labor force has been slowly but steadily climbing, reaching 61.7 percent in August after dropping to 60.2 percent in April. In Massachusetts, the rate fell to 60.3 percent in April, rebounded to 65.1 percent in June, and then fell back down again to 62.6 percent in August, household survey labor data show.
Both the fluctuating pattern and the scale of the changes are unusual. In general, the labor force shrinks during recessions and grows during expansions, but – like so much else about the pandemic – this economic slowdown is unprecedented.
