The labor shortage is permanent, survey suggests
Rachel Flores
- Labor shortages have persisted for months, as employers scramble to hire and retain workers.
- A new survey shows unemployed workers may not return anytime soon, if at all.
- It suggests that workers might be driving a more permanent shift in the labor market.
For months, employers have been telling stories of a labor shortage, as they struggle to hire and fill understaffed workplaces.
They may be singing this tune for a long time.
The right-leaning US Chamber of Commerce polled 529 Americans who became unemployed during the pandemic, and haven't returned to work as of early November. Of the respondents, more than half (53%) said they're just somewhat active, or not "very active at all," in their job search. A whopping 65% said that they don't expect to return before 2022, and a third don't expect to return before the April of 2022.
Finally, 8% of respondents said they "never plan to return to work." Goldman Sachs researchers previously estimated that 3.4 million people left the labor force. About 1.5 million were early retirees, and 1 million were on-time retirements. The number of self-employed workers has also ticked up amidst labor shortages.
All of this adds up to one thing: Workers may not be coming back anytime soon. They're demanding higher pay, more safety measures, and better benefits. In many cases, they decided after surviving a pandemic that life was too short to work in a job they don't like.
Now, the Chamber's survey suggests that labor shortages may be more permanent amidst a "Great Realization," as a good chunk of the usual labor force remains on the sidelines — perhaps for forever.
It'll 'remain tough' to get workers in 2022
A note from S&P global economists led by Beth Ann Bovinos said that it will "likely remain tough" to find workers in 2022, and those workers will cost businesses more. Right now, according to S&P, 45% of the people who left the labor force are prime-age workers — people ages 25-54 — and "their return is key to stabilizing the job market." That's 1.4 million workers, 68% of whom are women.
Labor constraints are driven by people who left the labor force, according to S&P, meaning people who aren't actively working or job searching. That means those aren't opting to stay unemployed and receive benefits.
And, while S&P estimates that 58% of the 3 million exits are temporary, it's still unclear when they will return. For those 1.4 million workers, it probably won't be until "pandemic-related issues are resolved." As Omicron, a new coronavirus variant, starts to make its way through the US, it seems likely that "pandemic-related issues" will stick around.
At the same time, employed workers have been increasingly acting with their feet. In September, 4.4 million workers quit their jobs, marking the sixth month of near-record quits. In other words, for half of 2021, workers quit like never before, and showed no signs of slowing.
Anecdotally, businesses have had success retaining and hiring workers by keeping wages and benefits high. Much of this has been attributed to workers yielding more leverage, although some economists have noted that wage gains are still a drop in the bucket, and may not stick around without structural changes like a minimum wage hike.
But as workers begin to reenvision work and what it means to them — and thousands take to the picket line to demand better conditions — labor leaders are hoping to take advantage of a pivotal moment to build worker power and collective action.
from Business Insider https://ift.tt/3ogeT3w
No comments