Each day, companies of every size, in every industry and across almost every state are facing unprecedented challenges hiring workers to fill open jobs. As of June 2022, data shows there are 11.4 million job openings across the country, but only 6 million unemployed workers.
How did this happen? At the height of the pandemic, 120,000 businesses temporarily closed, causing unemployment numbers to skyrocket to more than 30 million. However, in 2021 employers added an unprecedented 3.8 million jobs – but Americans have continued to leave the labor force since the start of the pandemic.
Right now, the labor force participation is at 62.3%, down from 63.3% in 2020. When the U.S. Chamber surveyed unemployed workers who lost their job during the pandemic, factors that kept them from returning to the work force including caring for children or other family members, no opportunities within his or her given industry, and lingering concern about COVID-19.
Other factors contributing to the labor shortage are as follows:
- Increase in Savings – enhanced employment benefits, stimulus checks and not being able to go out and spend money during the pandemic allowed many Americans to build up savings accounts since early 2020.
- Early Retirement – as of October 2021, the pandemic drove more than 3 million Americans into early retirement.
- Lack of Access to Childcare – access to high quality, affordable child care was an issue even before the pandemic. The child care industry lost 370,600 jobs in 2020, and employment still remains at 10% below pre-pandemic levels, adding to the problem.
- New Business Starts – many employees chose not to return to their previous jobs in order to start their own businesses. Nearly 10 million new business applications have been filed in the past two years.
(Read the full article published by the U.S. Chamber of Commerce titled Understanding American’s Labor Shortage here.)
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