While labor market growth remains strong, with the threat of a recession looming over the U.S., some workers may be wondering what a downturn would mean for them.
That may depend on what industry you work in, as some kinds of jobs are less likely to be impacted than others. “There are sectors that, on average, have not lost jobs typically during recessions,” Justin Wolfers, a professor of public policy and economics at the University of Michigan, told USA TODAY.
With most forecasters expecting the U.S. to slip into a recession in the second half of 2023, here’s what U.S. workers should know.
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How does a recession impact jobs?
First, job openings fall and hiring slows, according to Julia Pollak, chief economist at ZipRecruiter. “And that means that people who are unemployed take longer and longer to find new jobs,” she said.
After companies cut planned additions to their teams, they stop replacing natural attrition, according to Pollak. “And only after that do they typically, if they still can’t cut costs enough to get in line with falling demand and falling revenues, then they go to layoffs,” she said.
Those layoffs tend to take place in certain kinds of industries, such as construction and manufacturing, which can be sensitive to changes in consumer spending on durable goods and interest rates. “People lose access to credit and cut back on those big purchases or they don’t feel confident enough to take on debt to buy a new home or car or something,” Pollak said.
The cause of the recession can also impact how it plays out. For example, a housing-led recession may lead to higher unemployment than one caused by a stock market collapse, Pollak said. “A recession accompanied by a financial crisis, a debt crisis, or something like that leads to higher unemployment and more layoffs than one that doesn’t,” she said.
What jobs are least impacted by a recession?
The jobs that are typically less vulnerable to recessions include:
Healthcare
With the exception of the COVID-19 recession, Pollak said the healthcare sector does not typically lose jobs, including positions such as nurses, home health and personal care aides, and medical assistants. “So, those kinds of roles, they’re very resilient,” she said.
Higher education
Higher education is countercyclical, according to Wolfers, meaning that it tends to do better when other sectors are struggling as high school graduates who are unable to find work may be more drawn to the idea of college.
“So, we actually tend to see enrollment rise during bad times,” he said.
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However, Pollak said higher education is not immune, and may make cutbacks at a later date than some other industries if philanthropy and public spending fall enough.
Federal government
If the U.S. enters a recession, Wolfers said, typically the federal government tries to spend money, which has resulted in large stimulus packages during previous downturns. “And so that keeps federal employment pretty strong,” he said.
Garbage collectors
Garbage collectors were among the jobs that fared well in both the Great Recession and the 2001 recession, according to Pollak.
Restaurant cooks
“Obviously, restaurants didn’t do very well in the COVID recession, but typically they do alright overall,” Pollak said.
Physical therapists
Pollak said physical therapists also did well during both pre-pandemic recessions.
Massage therapists
Massage therapists did, too. “Perhaps people needed some way to get through the stress of the recessions,” Pollak said.
Child care workers
Child care workers also did well during those two pre-COVID downturns, according to Pollak.
However, Wolfers cautioned that the impacts may not be the same the next time around. “The difficulty is, what’s been true on average in the past may not be true in the next recession,” he said.
Nathan Diller is a consumer travel reporter for USA TODAY based in Nashville. You can reach him at ndiller@usatoday.com.
