By Joni Foster, Program Director with EGBI
“Why are American workers becoming harder to find?”, an article this week in The Economist found that total job vacancies nationwide are at the highest level for at least 2 decades. There are plenty of unfulfilled positions, causing a labor shortage, even though employers are offering higher pay.
The online zine, The Hill, noted that “as of March this year (2021) the U.S. was still 8.4 million jobs short of pre-pandemic levels, a year after the economy lost more than 21 million jobs amid the onset of the COVID-19 pandemic. The unemployment rate has since dropped to 6 percent, but it does not reflect millions of Americans who left the labor force because of the pandemic. While there are still millions of unemployed people still looking for work, restaurants, bars, fast food, retailers are having trouble hiring to meet the surging demand.”
The Economist article explored three reasons. First, over-generous stimulus checks and bonus unemployment; yet studies don’t back this one up during this pandemic. Stimulus checks were a huge help when there really weren’t jobs available during the height of the pandemic.
The second reason was the fear factor, the fear of Covid, to work in jobs that are public facing. Hopefully, vaccines should be bringing this reason to a close over the next few months.
Lastly, the extraordinary reallocation of resources accelerated by the pandemic, meaning the huge shift in where the jobs are both in locations and sectors. McKinsey & Company published a report on Feb 18, 2021 on the future of work after Covid 19 that started with a startling quote: The pandemic accelerated existing trends in remote work, e-commerce, and automation, with up to 25 percent more workers than previously estimated potentially needing to switch occupations.
McKinsey & Company also studied the effect of Covid on women in the workforce, particularly women with children under 10 years old. In an article published March 8, 2021, a study last year found nearly 23 percent of women workers were considering leaving the workforce in 2020. Many women left the workforce to help their children through the school year will likely/hopefully be ready to get back to work in the fall assuming vaccines put the pandemic behind us.
Economists believe that this hiring issue will work itself out in the next several months. In the meantime, a caution to employers to about offering higher salaries if they can’t sustain that salary into the future. To offer a high salary now just to reduce it later will bring big morale and productivity problems later.
It might mean, too, that business might start looking at new ways to staff their operations. McKinsey concludes that businesses can start with a granular analysis of what work can be done remotely by focusing on the tasks involved rather than whole jobs. For businesses with jobs with high physical proximity, these are likely to experience the most disruption post-covid.