Beyond the health ramifications and tremendous loss of life, the coronavirus (COVID-19) pandemic has caused an unprecedented disruption to the U.S. labor market.

In April 2020, the unemployment rate jumped to nearly 20%, according to the Bureau of Labor Statistics (BLS)—the highest level since the Great Depression—meaning one in five people looking for work couldn’t find a job.

Although the effect of the pandemic on employment is certainly secondary to its impact on our physical well-being, a significant body of research shows that losing a job is one of the most impactful life events, often leading to increases in depression, foreclosure and eviction, hunger, substance abuse, and domestic violence.

Fortunately, the U.S. labor market has improved dramatically since April, with the unemployment rate falling to 6.7% as of December and vaccines beginning to disseminate across the country. Nonetheless, the virus continues to spread, and employment growth is slowing while prospects for future job losses increase dramatically.

Moreover, the long-term effects of the pandemic on employment remain unclear. Industries that cater to consumers online and via mobile technology have flourished while those reliant on in-person customers have struggled. Meanwhile, women and people of color have been particularly impacted.

How quickly will the labor market recover in 2021? And how might the pandemic affect different sectors of the workforce in the long run? Credit unions need to be aware of the pandemic’s short- and long-term effects on their employees and members and be flexible and creative in responding to their changing needs and preferences.

Industries affected differently

In November, the U.S. labor market continued to improve with the creation of 245,000 new jobs and the unemployment rate falling from 6.9% to 6.7%.

However, the pace of improvement was significantly slower than in previous months. In October, the unemployment rate fell a full percentage point from 7.9% to 6.9%.

Industries that have been particularly hard-hit tend to rely on in-person shoppers, travel, or tourism, such as leisure and hospitality, which is down 3.4 million jobs since February.

This also includes food service, which has 2.1 million fewer jobs. Education and health services lost 1.3 million jobs, and retail remains down 550,000 jobs.

However, other sectors that are better able to transition to remote work have fared relatively well. That includes financial services, which has lost only 7,000 jobs since the start of the pandemic.

In fact, while total U.S. nonfarm employment declined by 10.2 million during the first nine months of the year, both credit unions and banks increased their number of full-time employees: Full-time employment at federally insured credit unions grew by more than 1,000 jobs since the start of 2020.

Certain states have also fared well, such as Iowa, Nebraska, Vermont, and South Dakota, which all have unemployment rates at or below 3.6%. Meanwhile, states that rely on tourism and in-person entertainment are experiencing unemployment rates that are three or four times as high, including New York (9.6%), Nevada (12.0%), and Hawaii (14.3%).

NEXT: The ‘she-cession’