Is the labor shortage a crisis or an adjustment?

Kimberly Adams Jun 1, 2021
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Many industries are raising wages and offering bonuses to lure applicants. But will it work? Spencer Platt/Getty Images

Is the labor shortage a crisis or an adjustment?

Kimberly Adams Jun 1, 2021
Heard on:
Many industries are raising wages and offering bonuses to lure applicants. But will it work? Spencer Platt/Getty Images
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COPY

We’ve been talking a lot about the labor shortage happening in this economy. The U.S. Chamber of Commerce said in a report released on Tuesday that we are in a a workforce crisis. The economy is experiencing an all-time high of 8.1 million job openings and there are not enough available workers able, or willing, to take those jobs as offered.

The Chamber says this shortage started before the pandemic, but post-pandemic realities have exacerbated the issue. To compile the report, the Chamber of Commerce came up with what it calls a worker availability ratio, figuring out how many workers are available for every open position. Right now, their data show it stands at 1.4 workers per open position. Normally, that ratio is closer to 2.8 workers per vacant job.

Some of that is due to skills gaps and immigration policy. However, the Chamber’s Executive Vice President Neil Bradley said: “The pandemic and some of the pandemic responses have created new barriers for people to return to the workforce.”

He cited factors like remote learning, which keeps kids at home, or child care centers closing and a lack of before- and after-school care. And, said Bradley, those fields are struggling to hire as well, compounding the problem. “The industries that need workers are also the industries that we need to recover to be able to help other people get back to work,” he said.

Many economists point to the quality of jobs and pay offered as additional reasons why workers may not be rushing to go back. According to Lily Roberts, managing director with the Center for American Progress: “There are enough workers for the jobs. I think the thing that we have a shortage of is jobs that are good enough to take, right now.”

Many industries are raising wages and offering bonuses to lure applicants.

But it is important to note, said Joyce Jacobsen, president at Hobart and William Smith Colleges and an economics professor, that we are relatively early in the reopening after the pandemic. “It seems like it’s been a fairly short time for us to be crying shortage. As opposed to that we’re still in the adjustment back to full opening,” Jacobsen said.

After all, vaccines were only recently made widely available, plus there are still millions of unemployed people.

Jacobsen said there is one area with with a true labor shortage at the moment. “In those traditional summer jobs, where, for a lot of the recent years, they’ve been filled by people coming from abroad and, suddenly, traditional summer hotspots are finding that they actually need to hire American teenagers,” she said.

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