February 17, 2022
Executive Vice President, Chief Policy Officer, and Head of Strategic Advocacy, U.S. Chamber of Commerce
Founder, Darby Dunn Communications
During the past two years, an incredible amount of change has occurred in the global economy. The middle market economy, in particular, has been impacted by the pandemic, ushering in inflation, the Great Resignation, and a housing shortage.
As a part of the U.S. Chamber of Commerce’s “Real Economy” series, Joe Brusuelas, chief economist at RSM, and Neil Bradley, Executive Vice President, Chief Policy Officer and Head of Strategic Advocacy of the U.S. Chamber of Commerce, discussed the economic and policy issues affecting the global market. Here’s what businesses need to know about the impact of COVID-19 on the labor market two years in, and where they can expect it to go from here.
The Middle Market Economy Is in a ‘Boom-flation’
Inflation is currently at a four-decade high, which has caused concern among businesses and consumers contending with rising prices and stagnant income. However, Brusuelas explained that this current period of inflation is a part of the growing pains from a swift economic recovery through relation, and he does not anticipate it will last long.
“You might describe it as ‘boom-flation’ — we have an economic boom going on amidst a post-pandemic adjustment in inflation,” said Brusuelas. “In April 2020, we were down 22 million jobs. Policymakers at the federal reserve in Congress and the administration really had no choice other than an attempt to reflate the economy.”
It worked, said Brusuelas, and now the economy is moving in a different direction, with an average of 541,000 jobs being added each month over the last quarter.
“We're already back above the pre-pandemic level of overall economic activity and that was done in less than a year,” he said. “The economy is going to be in a pretty good position here to absorb the inflation.”
The Workforce Is Going Through a 'Great Reshuffling'
The term “The Great Resignation” has been used to describe the current phenomenon of Americans leaving their jobs en masse in record-high numbers. Data from the Bureau of Labor Statistics found that an average of nearly 4 million workers quit their jobs each month in 2021, up from 3.5 million per month in 2019.
But those employees aren’t simply quitting their jobs; they’re also finding new work in other fields. Bradley described this phase as more of a combined resignation and “reshuffling.”
Bradley noted that the pandemic impacted how employees view work-life balance, the landscape of legal immigration, and the number of working mothers in the current workforce. All of these factors (and others) influenced a shuffle in people’s lines of work, he explained.
“You add all those things up and it's a lot of things for employers to work through as we figure out how to fill those open jobs when employers or businesses think about what they need to do to attract and to retain work,” said Bradley.
People Will Need to Invest in Their Lifetime Education
Bradley and Brusuelas agreed that the current U.S. education system and a four-year college degree will not be sustainable in the future. The volatility of the current workforce means future workers are going to continually need to educate themselves to stay competitive.
“If we're looking at even the longer-term future, what we're really going to move to is lifetime learning,” said Bradley. “[We] are likely over … the days of K-through-12 education, … a four-year degree, and then employment and never back to education.”
“The technology is moving so fast [and there are] disruptions in the economy that many of us and frankly, our kids, in particular, are going to be getting skilled and re-skilled … over the course of their careers,” he continued. “We should really begin thinking about how we support people in getting those educational opportunities, not just when they're under the age of 23, but over the course of their lives.”