Jobs go abegging in the US
Washington – Salespeople, food servers, postal workers – “Help Wanted” ads are proliferating across the US, as companies struggle to deal with a worker shortage caused by the pandemic, a rash of early retirements and restrictive immigration laws.
More than 10 million openings went unfilled in June, according to government data, while fewer than six million people were seeking work, even as employers desperately try to boost hiring amid a frenzy of consumer spending.
“We have a lot of jobs, but not enough workers to fill them,” the US Chamber of Commerce, which represents American companies, said in a statement.
Many of those who stopped working as Covid first ravaged the US economy in early 2020 have never returned.
“There would be 3.4 million more workers today if labour force participation” – the percentage of the working-age population currently employed or actively seeking work – was at the pre-pandemic rate, the chamber calculated. It slipped from 63.4% to 62.1%.
Where have all these people gone? Many simply took early retirement.
“Part of that is just the US population continues to age,” said Nick Bunker, a labour-market specialist with jobs website Indeed.
The “baby boomers” had already begun leaving the labour market, but there has been an “acceleration in retirements” since the pandemic struck, said Diane Swonk, chief economist at KPMG.
In the short term, Bunker said, “we’re unlikely to get back to exactly the pre-pandemic level of labour-force participation because of the aging of the population”.
Adding to this, said Swonk, “we haven’t had immigration at the pace to replace the baby boomers”.
Restrictions imposed under former president Donald Trump, plus the impact of Covid, steeply reduced the number of foreigners entering the country.
“It has rebounded a little bit,” Bunker said.
The Chamber of Commerce also underscored the impact of generous government assistance during the pandemic, which “bolstered people’s economic stability – allowing them to continue sitting out of the labour force”.
To lure workers back, many employers have boosted pay and benefits.
The shortage is expected to ease as the Federal Reserve continues raising interest rates.
In the meantime, over the past year, millions have changed jobs, and this “Great Resignation” has resulted in higher hourly wages. The private sector average is now $32.27 (about R520), up 5.2% in a year, adding to inflationary pressures.
The US labour market showed new signs of vitality last month. The 22 million jobs lost due to Covid have returned, and the unemployment rate is a historically low 3.5%.