Only half of the people who lost jobs during COVID are going back to work

• JPMorgan found that half of the people who lost jobs during COVID aren't looking for a new one.
• Those 2.9 million people who dropped out of the labor force may have retired, or are still waiting to return.
• There's a number of reasons people aren't returning, from childcare to expecting more out of a job.

The pandemic is dragging on and people aren't rushing back to work, despite anecdotes of signing bonuses, the end of federal unemployment benefits, and rising wages. Now, a note from JPMorgan's Jesse Edgerton shows just how many people haven't returned.

"Loosely speaking, about half of the people who lost jobs during COVID are still actively looking for work, while the other half are not," Edgerton writes. That comes from a comparison of pre-COVID employment to today. When the pandemic first hit, employment dropped by 15% - meaning that 22 million jobs were shed.

Now, about 17 million more jobs have been added since pandemic employment hit its lowest, but that still leaves about 5.5 million jobs to go before reaching pre-COVID levels. According to JPMorgan, about 2.9 million of those jobs represent a "decline in the labor force" - meaning that those people have dropped out and aren't actively seeking employment.

Notably, JPMorgan finds that 900,000 of those who departed the labor force are age 55 or older; they might be part of the flock of early retirees driven by the pandemic. A report from the Federal Reserve Bank of Kansas City found that retirement shot up between February 2020 to June 2021 by 1.3% - well above the usual 0.3% rise. Insider's Ben Winck reported that Americans are now planning to retire earlier than ever, with the new retirement age coming in at 62.

But that means that 2 million Americans could be lured back into the labor force, and JPMorgan believes that they "will continue to drift back into employment" in the midst of a tight market. Some may return as their pandemic savings - whether from stimulus checks or other federal support - dwindle.

It may seem paradoxical for unemployment to remain high as job openings continue to reach record highs and wages rise to lure back workers. But there's a number of reasons that holes remain. One of them is childcare, with schools facing potential closures as the Delta variant spreads. And, as The Washington Post's Heather Long reports, childcare is facing its own staffing crisis, as workers leave the low-paying industry - and the industry sees 126,700 fewer workers than pre-pandemic.

Women over the age of 20, who already had a lower labor force participation than men, were particularly pummeled by pandemic caregiving responsibilities. In August, the labor force participation rate for those women actually dropped from the month prior, indicating yet another impact of the Delta variant.

The current shortages are likely driven in part by what economists call mismatches. That means there may be a disconnect between the skills applicants have and the jobs that are available (or employers' hiring software are filtering out people who may have relevant, but not word-for-word necessary skills).

Workers have also shown that they want more from work, leaving industries like leisure and hospitality en masse and quitting in record-breaking numbers for four months in a row.