COVID & Unemployment

With unemployment high, why can’t companies find the workers they need?

Sabri Ben-Achour Mar 17, 2021
Heard on:
HTML EMBED:
COPY
Businesses could attract more workers if they raised wages, one expert says. According to the National Federation Independent Business, that's starting to happen. Justin Sullivan/Getty Images
COVID & Unemployment

With unemployment high, why can’t companies find the workers they need?

Sabri Ben-Achour Mar 17, 2021
Heard on:
Businesses could attract more workers if they raised wages, one expert says. According to the National Federation Independent Business, that's starting to happen. Justin Sullivan/Getty Images
HTML EMBED:
COPY

The National Federation of Independent Business reported that 40% of its small business members had job openings they could not fill.

Bill Dunkelberg, chief economist at the NFIB, explained that “it varies a lot by industry. For example, the highest would be in construction, manufacturing, transportation.”

There are different theories for how this is possible with about 10 million Americans now unemployed. Dunkelberg said his members believe “one of the problems, of course, is that it pays you pretty well to be on unemployment these days.” They feel unemployment benefits are too high, Dunkelberg said.

It’s a contentious claim. Katharine Abraham, an economics professor at the University of Maryland, said her reading of the research is that it’s unlikely. 

“If you’re an unemployed worker looking for a job, you know that the unemployment benefits aren’t going to last forever. So if you’re offered a job that’s attractive, it makes sense for you to take it,” Abraham said.

Robert Frick, corporate economist with the Navy Federal Credit Union, has another explanation for the apparent worker shortage.

“There are few qualified applicants for the jobs that are open, so there’s obviously a skills mismatch,” he said.

For example, most of the unemployed waiters are probably not going be applying for the open manufacturing or tech jobs.

Abraham suspects there’s an altogether different explanation for this whole situation.

“If they paid more, they could attract more people,” she suggested.

That seems to be happening somewhat. According to the NFIB, 25% of businesses said they have already raised pay, and another 19% plan to do so.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.  

Need some Econ 101?

Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.