West Michigan Dataconomy: Unemployment in a Pandemic

While the long-term effects of the COVID-19 pandemic remain largely unknown, current data shows a mixed-bag of effects on the West Michigan labor market.

Undoubtedly, workers were some of the hardest hit during the pandemic, with communities of color, low income workers, and those lacking digital literacy disproportionally effected.

Unemployment surged from January 2020 to the middle of the year as communities settled into lock down. However, by January 2021, the situation across the state had largely improved, with the unemployment rate sitting 1.9 percent higher than January 2020 levels. Though more workers are finding jobs, it is important to realize that the current unemployment rate means some 82,000 additional people are seeking work in January 2021 than a year prior. In terms of West Michigan, Ottawa County performed the best in terms of the unemployment rate. Muskegon County lagged most in our region.

While the economic recovery appears well underway, perhaps more concerning is the number of individuals who dropped out of the labor force entirely – some 198,000 people statewide. Given that the pre-pandemic labor market was already constrained, enticing those workers back into the workforce, and assisting both companies and workers in finding each other, will prove an on-going challenge for the regional economy and communities going forward.

The situation appears more positive for those who remained employed during the pandemic. In general, workers largely experienced stable weekly earnings in key sectors, including construction, professional services, and leisure. Manufacturing employees saw their wages fall an average of $50 per week in April 2020 from the beginning of the year. However, by December 2020, wages had rebounded and surpassed early 2020 numbers to $1,175 per week.

Employees watched their average weekly hours track one of two scenarios, depending on their industry. Professional services, financial activities, and information all remained relatively stable throughout 2020. Meanwhile, workers in industries requiring more in-person work found their weekly average hours decreasing in April from the beginning of the year, before rebounding by December 2020. Some sectors, such as manufacturing and construction, saw average weekly hours surpass early 2020 levels.

Though the full impact to the economy from COVID-19 is still uncertain, overall, the data shows a trend toward recovery, perhaps to be accelerated from the recent passage of the American Rescue Plan of 2021.

As the West Michigan economy continues to improve, The Right Place is committed to providing businesses with support and resources, matching people in the search of work with jobs and making an inclusive recovery.