Salespeople, food servers, postal workers — “Help wanted” advertising is proliferating across the US, as employers are facing a worker shortage caused by the COVID-19 pandemic, early retirements and restrictive immigration laws.
More than 10 million openings went unfilled in June, US government data showed, while fewer than 6 million Americans were seeking work, even as employers desperately try to boost hiring amid a frenzy of consumer spending.
“We have a lot of jobs, but not enough workers to fill them,” the US Chamber of Commerce said in a statement.
Photo: Reuters
Many of those who stopped working as COVID-19 first ravaged the US economy in early 2020 have never returned.
There would be 3.4 million more workers today if labor force participation was at the pre-pandemic rate, the chamber said.
It has slipped from 63.4 percent to 62.1 percent.
Where have all these people gone? Many simply took early retirement.
“Part of that is just the US population continues to age,” said Nick Bunker, a labor market specialist at jobs Web site Indeed.
The huge cohort of “baby boomers” had already begun leaving the labor market, but there has been an “acceleration in retirements” since the pandemic struck, KPMG head economist Diane Swonk said.
Millions of people opted for early retirement, concerned for their health and with sufficient assets — thanks to a then-buoyant stock market and high real-estate prices — to leave the workplace.
In the short term, “we’re unlikely to get back to exactly the pre-pandemic level of labor force participation because of the aging of the population,” Bunker said.
“We haven’t had immigration at the pace to replace the baby boomers,” Swonk said.
Restrictions imposed under former US president Donald Trump, as well as the impact of COVID-19, steeply reduced the number of foreigners entering the country.
“It has rebounded a little bit, but still not at the levels we were seeing several years ago,” Bunker said.
The Chamber of Commerce also underscored the effects of generous government assistance during the pandemic, which it said “bolstered people’s economic stability — allowing them to continue sitting out of the labor force.”
Large numbers of women quit their jobs in 2020, in part because extended school closings required many to stay home to care for children. Those who wanted to place children in daycare centers were often frustrated, as labor shortages hit the daycare sector as well.
Swonk said not only COVID-19 infections, but also the debilitating effects of long COVID have had a serious impact.
It is “really one of the most underestimated and misunderstood issues” keeping workers sidelined, she said.
To lure workers back, many employers have boosted pay and benefits.
However, if Americans’ buying frenzy slows, companies would need fewer workers, analysts say.
The labor shortage is expected to ease a bit as the US Federal Reserve continues aggressively raising interest rates in its effort to combat inflation.
In the meantime, wage earners have profited. Over the past year, millions have changed jobs, often lured elsewhere by higher wages and better working conditions.
This “great resignation” has resulted in higher hourly wages.
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