ALBANY — The Capital Region unemployment rate dropped to 3.7% in October, continuing the steady decline seen through most of 2021, but the decline appears to be due at least in part to people dropping out of the labor force.
Across the region, 11,000 fewer people were employed in October 2021 than in pre-COVID October 2019. But only 2,400 more people were unemployed.
This put the region’s labor force at 536,100 last month, the smallest for any October since the year 2000. The region’s labor force also stood at 20-year lows in June, July, August and September.
Anyone who tried but failed to find work in a given month is considered unemployed. Anyone who worked at least one hour in that month or was absent with cause from a job is considered employed.
The numbers of unemployed plus employed combine to equal the labor force. The unemployed percentage of the labor force is the unemployment rate. Those who neither work or are looking for work don’t factor into the unemployment rate and aren’t counted in the labor force.
A recurring concern for employers and economists is the number of people of working age who have simply dropped out of the labor force during the COVID pandemic.
The labor force participation rate had been falling nationally for years but plummeted to near-50 year lows in early 2020, thanks to pandemic-related lockdowns and layoffs.
Today the participation rate is 61.6%, nearly 2 percentage points lower than on the eve of the pandemic, according to the Federal Reserve, and this is evident in many ways, such as at your local supermarket when there’s only two cashiers working, or when a favorite restaurant closes its doors two days a week.
The DOL issued its October labor estimates Tuesday, placing the Capital Region jobless rate at 3.7% and the Mohawk Valley region at 4.4%, both well below their October averages over the past 30 years.
From October 2019 to October 2021, the labor force has decreased 1.6% in the Capital Region and 3.4% in the Mohawk Valley Region.
The state Department of Labor indicated that the disruptions of the pandemic era have played into the volatility in the employment numbers. It said the fear of contracting COVID in the workplace or the need to stay home to care for children or the elderly has led some people to drop out of the workforce, but there are no local surveys to quantify this.
Another popular theory holds that enhanced unemployment benefits paid by state and federal governments have contributed to labor force decline. In New York, until Sept. 6, the combined benefit was as much as $804 a week, which is more than many jobs pay.
Remove commuting and childcare costs, and add tax exemptions, and staying at home becomes even more lucrative.
But preliminary numbers are not showing much change in the last two months.
An estimated 800,000 New Yorkers lost that federal benefit in September.
The number of unemployed New Yorkers dropped 110,900 from August to October, state Department of Labor data show. But the number of employed people increased only 35,400.
Meanwhile, the statewide unemployment rate fell to 6.0% in October 2021, the lowest since the pandemic hit in March 2020.