The so-called labor shortages facing the U.S. today are the result of a number of underlying factors, some of which have been ignored or dismissed.
A study from the Federal Reserve Bank of Saint Louis reveals that more than three million baby-boomers retired early. While the study doesn’t and likely can’t quantify the reasons, the most probable reasons are attractive incentives to retire early, discomfort with COVID in the workplace, and layoffs or forced retirements of older workers.
In addition, I know, if anecdotally, of hundreds of senior white collar job layoffs across a range of institutions and professions, and most of those individuals are going to find it difficult, if not impossible to find similar or equivalent positions, which will mean that many are unlikely to return to the workforce unless absolutely necessary. Law firms also aren’t hiring as many law school graduates as in previous years. As a result, those remaining in many organizations are being pressured to produce more, and those workplaces are becoming more stressful, which is leading to more departures and retirements. And paradoxically, the result is a slowly growing shortage of people with the same skills as those who were forced out, but those who were forced out appear reluctant to re-enter the workforce under current conditions.
I also know a number of small-business people who have been looking for workers, sometimes for well over a year, but can’t find people who even want to interview. I see signs everywhere saying, “Now Hiring,” or the equivalent. So there’s clearly an imbalance between the jobs that are open and what they pay and/or require in terms of working conditions and those who are unemployed or seeking jobs.
In certain fields, those imbalances have existed for years. There are far more trained singers, either classical or in any other musical genre, than there are available jobs. The same is true of theatre arts graduates. Creative MFA programs turn out far more would-be authors than can be published.
Yet there are shortages of workers in skilled trades.
The other day, I spent some time at a highly regarded and accredited post-high-school technical training school. While the institution’s graduates are in demand, those available jobs are located in other towns and cities. For example, there are jobs available for every automotive technician being graduated – if they’re willing to leave Cedar City. At around 50,000 people, Cedar City just isn’t big enough to provide jobs for all of them. So while their skills are needed elsewhere, the “entry costs” [i.e., housing, transportation, moving expenses] to relocate to those communities are often almost prohibitive. And if a family has two parents working, which has become more and more economically necessary, relocation may cost the other parent a job.
This doesn’t occur just here, either. In many east coast areas, people are commuting hours each way because they can’t afford decent housing and schools for their children closer to their jobs. Women often can’t work because they can’t find reliable, affordable, and decent childcare.
But, so far, I don’t see politicians and businesses addressing these and other structural imbalances… and with the comparatively smaller numbers of workers in generations younger than the baby-boomers, these worker shortages/imbalances aren’t going away any time soon.