Fed’s Barkin Warns Young Workers Face Slog and Urges Retraining

(Bloomberg) -- Young people may face a long slog in the U.S. labor market as customer-facing jobs at restaurants and in services may not recover fully from the Covid-19 pandemic, Federal Reserve Bank of Richmond President Thomas Barkin said, urging increased retraining of American laborers.

“It seems quite possible that — even with a vaccine or treatment — we will be in a world where highly exposed personal service sectors, such as restaurants, retail, and entertainment continue to operate at reduced capacity, which would mean fewer jobs in those sectors,” Barkin said in an essay posted on the bank’s website Monday.

Retraining will be necessary because those in customer-facing jobs like servers won’t be able to find similar jobs, Barkin wrote in the commentary entitled “What Happens to Young Workers?” The issue is especially critical for young employees because they have assumed many of the customer-service jobs and have been disproportionately hurt by the pandemic, he said.

“The most powerful lever would be to retain as many of these jobs as possible,” he wrote. The economy “needs smart, flexible and concerted training efforts to prepare people, particularly displaced workers and young people with less education, for other in-demand fields.”

Barkin and other Federal Reserve officials have emphasized the importance of additional fiscal action to cushion unemployed workers and speed a recovery. The U.S. had a 10.2% unemployment rate in July, which is the highest level since the 1930s.

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