U.S. labor revival in doubt as Delta raises worries about 'back to school'

By Lindsay (NYSE:LNN) Dunsmuir and Ann Saphir

WASHINGTON (Reuters) - In April, almost a year after she was laid off from her hospitality firm due to the pandemic, Sara Gard was still barely finding her feet with a new full-time job in financial services that she juggled alongside managing her daughter's remote schooling.

So when her six-year-old daughter's school, just north of Atlanta, Georgia, that month gave parents the option to choose in-person classes for their children when the new school year started in August, Gard signed up, and felt good about her decision.

Until, that is, a recent surge in cases caused by the highly transmissible Delta variant of COVID-19. Masks in her school district are highly recommended but not enforced and her daughter is too young to be vaccinated. Gard is now having sleepless nights as she reconsiders.

If she decides to put her child back into virtual schooling – which is still on offer – something will have to give. Her husband's job is at a hospital and Gard's employer, who she started with last November, wants her to spend more days in the office. "It's not sustainable for myself or my husband," Gard, 40, said. "The stress is killing me."

Expectations for a quickening U.S. economic recovery hinge in large part on more workers in jobs once in-person schooling resumes this fall. But the Delta variant could scupper those expectations if parents, especially women, remain or are forced back on to the sidelines.

"You can imagine school districts deciding to wait a month or two for the Delta wave to quieten. I am not saying it will happen, but it is easy to imagine that. It is also easy to imagine some people might say I am just going to wait a couple of months before going back to work," Federal Reserve Chair Jerome Powell said on Wednesday. "If schools don't open, then caretakers have to stay home and if people don't go back into the labor force, job growth won't be so strong."

HERE WE GO AGAIN?

Roughly 7 million fewer people are employed in the United States today than before the pandemic, Labor Department surveys of businesses and households show, despite record job openings.

The employment recovery has been notably lumpy for women, who bore a greater share of job losses early in the pandemic. Many had returned to the labor force by summer, but in August and September last year more than 1 million women aged 20 and older left the workforce as most schools reopened to online instruction only and kids were parked at home.

Graphic: Workforce participation, https://graphics.reuters.com/USA-ECONOMY/EMPLOYMENT/zdpxoyaaavx/chart.png

This year women have re-entered the workforce in greater numbers than men, dovetailing with the increase in in-person instruction as the school year wore on, and the reopening of a number of industries where they are over-represented.

Now, renewed uncertainty around school attendance risks curtailing that momentum.

Graphic: Women getting back to work, https://graphics.reuters.com/USA-ECONOMY/EMPLOYMENT/klpykemmepg/chart.png

As school districts prepare for reopening, protections vary widely. California and six other states require all children to wear masks in schools, as do many large cities, including Boston and Chicago, according to data compiled by tracking website Burbio. In Texas and seven other states accounting for 25% of school-age children, schools are not allowed to require masks.

Roughly 40% of 16-17 year-olds and 28% of 12-15 year-olds are vaccinated against COVID-19, Centers for Disease Control and Prevention data shows. Children aged 5-11 aren't forecast to be eligible until late fall at the earliest and under-fives some time after that.

"That is absolutely a concern as we move into this coming school year that we have this more contagious variant, and this is a group of individuals who won't be eligible for vaccination yet," said Dr. Sean O'Leary, a pediatric infectious disease specialist at the University of Colorado, Anschutz Medical Campus and vice chair of the American Academy of Pediatrics’ Committee on Infectious Diseases.

Whereas evidence last year suggested that schools could reopen safely without a spike in cases, the Delta variant appears to spread more easily among children.

"It's going to be very disruptive," said Daniel Domenech, who heads the American Association of School Administrators.

Graphic: Masks in schools? Depends where you live, https://graphics.reuters.com/USA-ECONOMY/EMPLOYMENT/klpykedrxpg/chart.png

Take San Bernardino City Unified School District, whose 47,000 students are among the 10% of the U.S. school-age population returning to classrooms this week. California requires masks, and the district is layering on extra precautions like new air filter systems.

Should one student get COVID-19, that student will isolate at home; if three in the same classroom come down with it, the entire class will be sent home for 10 days; and if 5% of the school gets it, the campus will close, according to the school's return-to-campus roadmap.

"I have a lot of confidence in what we've put in place," said Rachel Monarrez, the district's deputy superintendent. Still, she says of Delta's surge, "I'm watching it...and as I watch the data I'll make recommendations to the superintendent if we need to take a more strong approach."

'CLOCK IS TICKING'

The sudden rise in unpredictability about the months ahead is likely already causing some women to reconsider their job plans, according to Claudia Sahm, a senior fellow at the Jain Family Institute and a former Federal Reserve economist.

"People can't always wait to see where this lands to make a decision. I've had more and more friends telling me 'I'm going to hold off, stay part time,' because their kids are under 12," Sahm said.

"The clock is ticking here. We are too close to the start of the school year, we're too close to what is often a big job search season. It's really disconcerting to see this turn of events, yet it's not surprising. If the virus isn't under control, it's in control."

Gabriela Villagomez-Morales, 37, is a single mom with four kids aged 18, 17, 10 and 8 in Tacoma, Washington. She lost her job at a childcare center when it closed due to the pandemic and struggled to find new employment while helping her children with remote school. She has recently found another job at an in-home daycare but she too frets about the predictability of school staying open in the months ahead.

"If something did happen, what would my solutions be? It's really difficult for me," she said.