Where Did All The Workers Go?

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While current supply chain issues are keeping business executives and small business owners up at night, the shortage of workers has not gone away. Despite expanded unemployment benefits coming to an end in September, businesses are still struggling to find workers and fill their open positions.
 
According to the Bureau of Labor Statistics, there are still five million fewer Americans employed than before the pandemic, and three million of them have left the workforce.
 
Companies have been clawing at every sign of hope that hiring would get easier, but it seems to only be getting more challenging.  According to the National Federation of  Independent Business, 42% of businesses raised compensation in September but still could not fill all of their openings. Overall, wage growth is growing at the quickest rate in 20 years. Between March and July 2021, wages in the transportation and warehousing sector increased 14.7%
 
Despite record wage increases, and significant increases to candidate acquisition budgets, employers are not seeing the results they need. As employers continue to make additional adjustments many continue to debate one of the common themes of the pandemic…”Where did all the workers go?”

Financial Cushion

Unprecedented government relief (Expanded unemployment benefits, Stimulus checks, Student loan moratorium, & Eviction bans) gave families the extra financial cushion they needed to stay on the sidelines until they deemed it appropriate to return to work. People know that when they are ready there will be a job waiting for them.

When the workers sitting on the sidelines decide they are ready to return to the workforce their new job will certainly pay more than the job they had prior to the pandemic. 

Immigration

Immigrant and non-immigrant visas were down nearly 54% between October 2019 and October 2020. This equates to nearly five million people. Additionally, unused green cards reached a record high in 2020. 

The Trump administration put a freeze on green card applications in April 2020 and most temporary work visas were halted in June 2020. While the Biden Administration reversed this policy it will take some time for the immigrant worker pool to be refilled. 

COVID-19 Impacts

Fear of Covid-19

  • Many older and immunocompromised Americans are choosing to stay home. 

Government & Employer Vaccine Mandates

  • Nearly 60% of the U.S. population has received at least 1 shot of the COVID-19 vaccine. On the other side of the coin, mandates are leading a percentage of workers to quit their jobs and sit on the sidelines. 

Harsh Reality of COVID-19

  • The pandemic has taken the lives of over 750,000 American workers. While ghoulish in nature, this fact is undeniable nonetheless. 

Early Retirement

Approximately 2 million more people have retired during the pandemic than experts predicted. This was especially true for American workers who worked in more vulnerable professions. Low income, front line workers who worked in more high risk industries exited the workforce more rapidly than white collar workers. 

Slower Birth Rates Catching Up

America’s prime age population stopped growing over a decade ago. With fertility rates continuing to decline, it will be nearly impossible for us to replace the hole that the baby boomer generation is leaving in the workforce. 

Article References:

  • https://www.axios.com/immigration-labor-shortage-fc4134fb-2d44-4c8d-afa7-eff46bf1741d.html 
  • https://www.wsj.com/articles/where-did-all-the-workers-go-labor-shortage-biden-administration-11633725434
  • https://www.cnbc.com/2021/10/20/global-shortage-of-workers-whats-going-on-experts-explain.html
  • https://www.forbes.com/sites/gadlevanon/2021/08/17/the-top-trends-in-americas-job-market/?sh=58d92ce25c14
  • https://www.theatlantic.com/ideas/archive/2021/10/how-do-you-make-7-million-workers-disappear/620475/