Public Assets Institute > Policy Areas > Family Economic Security > Why is there a worker shortage?

Why is there a worker shortage?

The Washington Post recently tackled the question a lot of people have been talking about. The headline read: “Why America has 8.4 million unemployed when there are 10 million job openings.”

What was refreshing about the Post story was that it didn’t offer the usual explanation about the mismatch between jobs and job skills, which seems to lay the blame for worker shortages on the workers. Instead, according to the Post, the mismatch is between the jobs on offer and jobs workers want.

Maybe the tide is turning. Maybe the demand for employees is reaching the point where they not only can ask for better pay, but also for meaningful work.

 Almost since the start of the pandemic, we’ve heard and read anecdotes about people rethinking work after COVID-19 upended their lives:

  • Frontline workers—people in close, daily contact with the general public—questioned whether they were being paid enough, not only for the risks they took, but given the real value of the services they were providing, like making sure there was safe food on grocery shelves.
  • People with the good fortune to be able to work from home started re-evaluating “the workplace.” The ride or drive to work was so routine that many of us didn’t think about how much time was getting eaten up going back and forth. Stay-at-home orders broke that habit, and it turned out travel time could be put to better use—at least a few days a week.
  • Then there were people who lost lousy jobs—jobs that neither paid an adequate wage nor offered any personal fulfillment. Unemployment benefits—both state and federal—gave them a break from the drudgery, at least for a little while, and perhaps the opportunity to find something better.

The Washington Post backed up some of these stories with numbers that suggest workers have simply left jobs in certain fields. The Post compared job openings in various industries with the number of unemployed people who used to work in those industries. Professional and business services, for example, had 1.8 million jobs openings. Presumably, before the pandemic, all or most of those jobs were filled. But the Post found that only 921,000 people who were unemployed reported that their most recent job had been in professional and business services.

It would appear, therefore, that almost half of the people who used to do that kind of work either found jobs in other fields or left the labor force. Professional and business services had the biggest gap between available jobs and people with experience seeking those jobs, but the Post showed that other industries were suffering from worker shortages, too.

Employers have had the upper hand for a long, long, time. But that may be changing as employers want to get their businesses going again, and they simply have to pay more and offer better working conditions to get the help they need.

It’s also possible, thanks to the federal supplemental unemployment benefits, federal stimulus payments and tax credits, and help from state government, we rediscovered how much stronger the economy can be when people have enough money in their pockets to support themselves and their families. It’s better for all of us when everyone is better off.

The child tax credits and public support for child care will need to continue after the pandemic fades. But the role filled temporarily by the massive surge in unemployment benefits can be replaced with jobs that pay a livable wage and provide working conditions that respect employees. That would go a long way to repairing what the Post called “the mismatch between the jobs available and what workers want.”

Posted by Jack Hoffman on September 22, 2021 at 10:25 am

One Response to “Why is there a worker shortage?”

  1. Michelle says:

    How about the idea that the whole structure of the economy is changing and the mismatch, while certainly partially due to the personal reassessment of “work” is also because of the evolution of work in general and people sense that?

    I’m not saying that the changes are good or bad, I just notice that every pundit has been wrong about most everything the last few years. So I don’t think anyone knows what the landscape of work will look like in 2 years.

    Most articles like this are backward-looking, understandably. But maybe the whole fabric of work is changing more than foreseen (likely) and were seeing something akin to the way the tide goes out before a tsunami.