What Happened to All the Workers?

On November 30, 2022, in a speech about “Inflation and the Labor Market,” Federal Reserve Chairman Jerome Powell attributed the majority of the estimated 3.5 million labor force deficit in the United States to early retirements, and a significant portion (between 280,000 and 680,000) to “long Covid.”

Powell also mentioned in a footnote that a more distressing factor was an approximate 400,000 unexpected deaths among working-age individuals.

While Covid-19 is certainly a major factor in these deaths, especially among young and middle-aged workers, it’s important to acknowledge that it’s not the only cause. To get a clearer picture of the situation, we require greater transparency in government data. In the meantime, we can turn to life insurance companies who are experts in tracking mortality for more information.

There was a noticeable difference between the amount of work produced in 2020 compared to that of 2021

In 2020, Covid-19 mostly affected middle-age people with comorbidities like diabetes and caused many fatalities. However, it did not cause significant loss of life among healthy young and middle-age people who are employed in large or mid-size companies and have group life insurance. According to the chart below, the group life insurance benefit payments in 2020 were only slightly higher than in 2018.

In the year 2021, there was a significant increase of 20.7% in group life payments compared to the average of the past five years. Additionally, there was a 15% increase compared to the year 2020 which experienced the acute pandemic. It is unclear why there was such an increase in payments, considering that many young and middle-aged individuals managed to survive the pandemic of 2020 successfully. It is important to note that in 2021, 520 million Covid-19 vaccine doses were administered in the United States. It is reasonable to expect that individuals who are healthy, employed, and have access to good benefits and vaccinations would have had better outcomes in 2021 compared to 2020. While the rates of overdose and suicide have increased in recent years, these causes of death are less prevalent among the group life cohorts in general, and recent data shows that they were not the main factors contributing to the group life surge. Interestingly, the two largest spikes in deaths in 2021 were due to non-automobile accidents and deadly automobile accidents.

Millennial Mortality

The charts below provide a closer look at three young adult age groups – 30-34, 35-39, and 40-44 – and show the total number of deaths from all causes. It’s clear from just looking at the charts that factors other than Covid-19 must have played a significant role in the increase in deaths among young and middle-aged people. It’s important to note that the statistics used are official but may overestimate Covid-related deaths and underestimate non-Covid-related deaths.

• Overall, young and middle-aged people had a more difficult time in 2021 compared to 2020.
• It is important to note that 2022 had poorer performance compared to 2020 but was not as severe as 2021.
• In 2022, the mortality rates remained significantly higher compared to the levels before the pandemic.

The three charts show estimated total deaths for 2022. November and December data are still tentative and may be revised upwards in the future. We have made projections that we consider to be reasonable. The percentage change statistics relate to the average from 2018-19. These are actual numbers and have not been adjusted for population growth or cohort size.

In 2020, Covid-19 had a severe impact, specifically affecting those who were elderly, vulnerable, or had pre-existing medical conditions. This means that in 2021 and 2022, there may be a lesser number of people who have underlying health issues and are susceptible to Covid-19. It is commonly observed that low-mortality years follow high-mortality years. If there are two consecutive years with high mortality rates, then the third year is more likely to have low mortality. Therefore, the unexpectedly high mortality rate in 2022, which is comparable to or worse than 2020, is surprising. This is particularly baffling as the Omicron variant in 2021 was less severe, which should have resulted in a lower mortality rate in 2022.

Understanding all-cause mortality is important for assessing the effectiveness of public health policies. Looking at all causes can reveal important trends that may be missed by overly complex or narrow analyses. For instance, if an analysis claimed that lockdowns reduced Covid deaths but failed to account for the fact that deaths from other causes actually increased even more, it would not accurately reflect the full impact of the policy. Similarly, if a chemotherapy treatment reduces tumor size but results in patient fatalities, it may accomplish its intended purpose but ultimately fail in its overall objective. Despite this, many analysts and health authorities have disregarded the overall mortality rate in the past three years. The all-cause data presented above indicates that our Covid policies have been largely ineffective.

Focusing on specific causes can be helpful or even essential for certain purposes. Large groupings can obscure important signals, as demonstrated by statistical phenomena like Simpson’s paradox. In the upcoming weeks, more information will be provided about the analysis conducted by John Beaudoin, an engineer from Massachusetts, who obtained access to his state’s digital death records for the past eight years. His analysis shows that there are certain moments and periods when specific causes of death increase or decrease, which is not organized in such detail by CDC data.

In recent years, there has been an increase in drug overdoses and suicides. This trend was further accelerated by pandemic lockdowns. However, these factors cannot fully explain the high all-cause mortality rates observed. We should still take them into account. Additionally, while Covid-19 was not the sole cause of the record deaths, it did play a significant role.

Employment Aberration

After conducting further analysis, we discovered that there was a significant increase in the number of natural deaths among people in their working years in the spring and summer of 2021. However, this data excludes Covid-19 and deaths resulting from external causes such as homicide, suicide, and overdose. Unfortunately, the CDC has since discontinued providing detailed information on these specific categories.

According to OneAmerica CEO Scott Davison, the trend that was previously mentioned has continued and actually worsened, as reported during a videoconference with the Indiana Chamber of Commerce on December 30, 2021. This information was obtained from life insurance companies.

“We have observed that the increase in death rates that we witnessed in the third quarter is persisting in the fourth quarter as well. It is remarkable that the death rates have surged by 40% compared to the pre-pandemic period. It is possible that not all of these deaths are attributed to COVID-19, but they have certainly increased by a substantial amount.”

Lincoln National’s payouts for 2021 were $1.4 billion, which is a 164% increase compared to the $548 million paid out in 2020, as reported several months later.

You may recall from the three all-cause charts we presented that there was a significant increase in deaths for young and middle-aged individuals during the months of August, September, and October 2021. This was the most severe period of such deaths in modern times.

The Society of Actuaries has recently released an update from November 2022, covering the period till June 2022, about sudden deaths which include heart attacks, strokes, pulmonary embolisms, accidents, and seemingly inexplicable ones. These incidents have continued into 2023.

The November 2022 report by the Society of Actuaries on Group Life Covid-19 mortality survey states that the Delta wave in the U.S. during the late summer and fall of 2021 was more infectious and seemed to cause more severe symptoms than earlier variants. We have proposed that mass vaccination programs may have caused the emergence of more infectious and vaccine-resistant variants due to intense evolutionary pressure. A recently published study in the New England Journal of Medicine supports our idea that escape variants are becoming more prevalent: Substantial Neutralization Escape by SARS-CoV-2 Omicron Variants BQ.1.1 and XBB.1.)

In 2021, federal officials and medical experts referred to the COVID-19 situation as a “pandemic of the unvaccinated.” The Society of Actuaries presented its concerning findings by suggesting that the deaths were a result of not being vaccinated. They used basic calculations of excess mortality and statewide vaccination data as of June 30, 2021.

Regarding the issue of ascribing more deaths to unvaccinated individuals in 2021 compared to 2020, it seems problematic to generate such claims given that there were only around 20-40% of unvaccinated people in the group life insureds population in 2021, compared to 100% in 2020, and mortality barely increased. Additionally, considering the fact that 520 million vaccine doses have been administered, it seems unlikely to attribute more deaths to unvaccinated individuals with a smaller population percentage being unvaccinated. The math doesn’t add up.

In 2021, the 40-44 age group had 21.5% more deaths than in 2020. This unfortunate event occurred even though less than half of the population was unvaccinated. It’s challenging to claim that vaccines are highly effective when there’s a rise in both vaccination distribution and deaths.

However, according to the group life insurance data, it appears that vaccinated groups have experienced worse outcomes. By August, most large and mid-size companies and organizations across the country had vaccine mandates, and the majority of employees followed suit. However, these workers experienced significantly higher death rates, particularly in the latter half of 2021, which is unprecedented.

The source of the information is a report on the Group Life Covid-19 Mortality Survey by the Society of Actuaries, published in November 2022. In his book Cause Unknown, Ed Dowd, who used to work at BlackRock as a portfolio manager, highlights an important detail.

According to an iron actuarial law, employed individuals who have group life insurance policies usually have better health compared to the general population cohort. They tend to have a significantly lower mortality rate, which accounts for only 30-40% of the overall population. However, in 2021, the chart above shows that these employed Americans experienced higher excess death rates compared to their larger pool of less healthy peers.

The shortage of workers could be attributed to the significant increase in people living with disabilities. Although Fed chair Powell has linked it to long Covid, it doesn’t entirely align with the timing.

To overgeneralize:

High mortality rates among the vulnerable were observed in 2020 due to Covid. However, in 2021 and 2022, there was a rise in mortality rates among the young, middle-aged, and healthy due to another cause, in addition to Covid.

The same patterns are being observed in several high-income developed countries, including Germany, the UK, Japan, South Korea, and Australia.