New Employment Data: There are Way More Job Openings than People Looking for Work
With the economy expanding at a record pace, employers are looking for additional workers to meet the growing demand for their goods and services. America's labor shortage is making that difficult and it's not going to improve any time soon.
The United States was at or near full employment before the covid pandemic, and there were already signs of a labor shortage. After a steep rise in unemployment at the beginning of the pandemic, the economy has been adding back jobs at a record pace and the unemployment rate now rests at 4.2%, near pre-pandemic lows. The problem now is finding enough workers to keep the economic boom on track.
Wall Street Journal: “U.S. job openings continue to far outpace the number of available workers, with nearly five million more open positions than people seeking work. There are more than 11 million job openings in the U.S. ... That compares with 6.9 million people who are unemployed but say they want to work."
As we wrote last month, the thin labor market today is caused by multiple factors such as early retirements driven by Covid fears, but economists have been warning of worker shortages for years in light of America's low birthrate and the flood of Baby Boomer retirements on the horizon. And Trump-era policies to exclude legal immigrants from joining the workforce just exacerbated the problem.
The good news for workers is that wages are rising as employers compete for their services. That, along with the supply chain issues resulting from the pandemic, is creating inflationary pressures in the economy. The supply chain issues should sort themselves out by the first quarter of 2022, but the labor shortage may become a chronic problem, much as it has become in Japan.
If there is a silver lining to all this, it's that more Americans may come to realize the pivotal role that undocumented workers play in the economy. Those 8 million workers in low wage and physically challenging jobs in the agriculture, hospitality, and construction industries have never been so essential to keeping the economy running, and no one has any idea how we would replace them if they were gone.
By: Don Lam & Curated Content