Offices, commutes, and gigs have been disrupted — for now.
More than 9 million Americans lost their jobs in 2020, the biggest shock to the labor market since the Great Depression. Even though employment numbers have bounced back, COVID is still shaping how we do our jobs, from the rise of hybrid work to shifts in the gig economy.
While these changes may seem profound in the short term, labor economist Paul Oyer says it remains to be seen how enduring they will prove to be.
Which recent labor trends have you been following most closely?
Obviously in the professional labor market, the big question is, Will we be returning to the office? There’s a conventional wisdom that says the pandemic caused some sort of disruption in the labor market and we will never go back to the old days where people commute to the office five days a week. I think the jury’s still out on that.
As we know, a lot of people like working from home. Not everybody does; a lot of people feel lonely and isolated. It seems easy to say, “I’m going to be just as effective from home,” but I’m not sure that’s right. I think people who want to stay home will end up missing out on opportunities, will end up not having their careers take off. But for many, that’s probably a trade-off they’re willing to make.
Another thing is innovation. Before the pandemic, there was a trend over thousands of years toward cities becoming more condensed and bigger. Even as the internet became more relevant, cities consolidated more and more because that’s where ideas are generated by interactions between people; that’s where innovation comes from. It’s hard for me to believe that the pandemic is going to completely reverse that.
One of your areas of study is the gig economy. What have been some of the impacts there?
I have referred to the gig economy as an “alternative safety net:” When you lose your job, when the economy goes wrong, people can still make some money — not a lot — as drivers or delivery people. You can take issue with some of the business models and business practices of those companies, but that’s been a valuable thing for a lot of workers to be able to fall back on when times are tough.
The pandemic was a little different, because the demand for Uber drivers went from a hundred to zero overnight. The demand for delivery people went up from zero. So overall, there were still plenty of gig jobs out there. What happened to Uber and Lyft is super interesting, because they didn’t have good, sustainable long-term profitable business models even before COVID. We’ll see what happens after. And now we also have this interesting question of whether DoorDash and Uber Eats and Postmates can turn demand into profit.
How well do you think the stimulus and other safety net programs worked to keep unemployed people afloat?
The fact that poverty has not gone up dramatically in the last year and a half suggests that throwing so much money into unemployment benefits and other safety net programs was pretty crucial. It didn’t make people rich, but it helped them survive; that, and the eviction moratoriums. Labor economists in general don’t like to disincentivize work, but I think most of us would feel that being very generous with benefits was appropriate because you’re talking about hunger and life and death.
Thinking ahead, do you think there’s more that could be done to prepare for this kind of economic shock?
We will have negative shocks to the labor market again, but let’s hope they’re not shut-the-whole-economy-down shocks. The question of what we should do really gets down to some of the questions we’ve been wrestling with for a long time before the pandemic as we’ve seen the increase in economic inequality. Do we as a country want to put forth a much greater safety net? Our ability to figure out a way to compromise on that looks pretty tenuous. The pandemic pushed people even further into their political lanes because they got into disagreements that had nothing to do with politics about things like masks and vaccines.
