Every day, we hear from our member companies of all sizes and industries in nearly every state that they are facing unprecedented challenges in filling open positions. Currently, according to the latest data, there are 9.5 million job openings in the United States, but only 6.5 million unemployed.
We have lots of jobs but not enough workers to fill them. Even if every unemployed person in this country found a job, he would still have 3 million jobs left.
The U.S. Chamber of Commerce tracks trends in job openings, labor force participation rates, turnover rates, and more to quickly understand the state of the U.S. workforce. America Works Data Center. Read below for an analysis of the state of the workforce at the national level.
Why are we facing a labor shortage?
The state of American business in 2024
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At the height of the pandemic, more than 120,000 businesses temporarily closed and more than 30 million U.S. workers lost their jobs. Since then, the number of job openings has steadily increased and the unemployment rate has gradually declined.
In 2022, employers ended up adding an unprecedented 4.5 million jobs. While a strong job market is good news, many jobs remain unfilled because there aren't enough workers in the U.S. to fill them. Even though more Americans are now participating in the labor force than before the pandemic, the overall percentage of the population participating in the labor force is declining. If today's labor force participation rate is the same as it was in February 2020, he would have an additional 1.27 million Americans joining the labor force to fill these jobs.
In fact, declining labor force participation among Americans is nothing new. In recent decades, fewer and fewer Americans have participated in the labor force, resulting in a shrinking workforce that is expected to continue to decline for years to come.
understand the gap
The labor force participation rate is currently 62.8%, down from 63.3% in February 2020 and 67.2% in January 2001. He is not the only reason why workers are absent from work; several factors come together to create an ongoing labor shortage. The factors detailed in the next section all contribute to labor shortages.
Additionally, in May 2022, the U.S. Chamber of Commerce conducted a survey of unemployed workers who lost their jobs during the pandemic to gain further insight into what is preventing them from returning to work. Here are some of the key findings.
Two-thirds (66%) of Americans who lost their full-time jobs during the pandemic say they are somewhat or not at all active in looking for a new job.
Almost half (49%) wouldn't take a job that didn't offer remote work opportunities.
More than a quarter (26%) say returning to work will never be essential.
Nearly one in five people have changed their livelihood, with 17% retiring, 19% transitioning to being a homemaker, and 14% currently working part-time.
Almost a quarter (24%) said government aid packages during the pandemic were motivating them not to actively look for work.
Young respondents between the ages of 25 and 34 are currently prioritizing personal growth over finding a job. 36% say they are focused on acquiring new skills, education or training before re-entering the job market.
Factors causing labor shortage
Early retirement and an aging workforce
As of October 2021, the pandemic had forced more than 3 million adults into early retirement. Overall, the number of adults age 55 and older leaving the labor force due to retirement increased from 48.1% in the third quarter of 2019 to 50.3% in the third quarter of 2021.
Additionally, the proportion of older adults in the U.S. population has been steadily increasing, and this trend is expected to continue. This change is partly due to the fact that younger generations are having fewer children than previous generations, resulting in an aging and shrinking population.
Net international migration to the United States is at its lowest level in decades
Net international migration to the United States contributed only 247,000 people to U.S. population growth from 2020 to 2021, according to U.S. Census Bureau data. Compared to the previous decade's high point, when immigration added 1.049 million people from 2015 to 2016, the impact of immigration on U.S. population growth has declined by 76%.
Lack of access to childcare facilities
Lack of access to quality, affordable child care was an issue even before the pandemic. According to a study by the U.S. Chamber of Commerce Foundation, the states surveyed (Alaska, Arkansas, Arizona, Missouri, and Texas) are losing out on an estimated average of $2.7 billion annually to the economy due to broken child care systems. It has been found.
A report from the U.S. Chamber of Commerce Foundation and Education Trust shows that the pandemic has created a downward spiral for the industry. Workers need reliable child care to return to work, but child care providers themselves face immense challenges. The pandemic has forced many child care providers to close or scale back. From February 2020 to April 2020, the child care industry lost 370,600 jobs, 95% of which were held by women. Unfortunately, recovery is not rapid. As of September 2021, employment in the child care industry remained 10 percent below pre-pandemic levels.
moreover,Women are also participatingThey are now making up the lowest percentage of the labor force since large numbers entered the labor force in the 1970s. In the spring of 2020,3.5 million mothers quit their jobs boosting the labor force participation rate of working mothers from about 70% to 55%.
Although more women are now working than in February 2020, the female labor force participation rate has not fully recovered to pre-pandemic levels or to its record high of 60.2% in early 2001. Not yet.
A Chamber of Commerce survey of unemployed workers who lost their jobs during the pandemic found that 27% had to stay home to care for children or other family members, making it difficult or impossible for them to return to work. I answered that it was.
A new business begins
In the spirit of entrepreneurship, some employees have quit their jobs or remained unemployed to start their own businesses. In the past two years, nearly 10 million new business applications have been filed, and in 2020 alone, he said, more than 4 million new businesses were started.
Additionally, workers of all ages, especially young people, are increasingly using digital commerce as a new source of income. 2020…2 million peopleAchieved over six figures on social media. The cultural changes spurred by the digital age will extend to the labor market, and employers will now have to overcome new challenges to attract employees.
increase in savings
Expanded unemployment benefits, stimulus checks, and the inability to go out and spend money due to the COVID-19 pandemic have all combined to push Americans into savings accounts more than they have since the beginning of 2020. This contributed to an increase of $4 trillion. Specifically, the extra few hundred dollars per week from expanded unemployment benefits (ending in September 2021) will result in 68% of claimants earning more than they did when they were working while unemployed. became.
In the Chamber of Commerce survey, 23% of women said the reason for not re-entering the workforce was that working full-time was less important because other family members were earning enough. Increased income and savings strengthened people's financial security and enabled them to remain out of the labor force. But rising inflation is draining savings accounts and forcing many people to return to work.
As the shift in our workforce began to become apparent, “Great Resignation” entered our vocabulary and the hashtag #Quitoku What's more, social media users posted about quitting their jobs in search of more free time and better opportunities, which went viral.
However, the story is more complex than individuals quitting their jobs. In fact, a better term for the high turnover rate of the past few years is “major turnover.” More than 34 million Americans will quit their jobs in 2023, with 3.7 million quitting their jobs in September alone. However, since November 2020, the hiring rate has exceeded the turnover rate. This means Americans are seeking and finding better opportunities with new employers, new jobs and industries.
The above reasons help clarify the current labor shortage situation, but these examples are not exhaustive.
Understanding why jobs are filled and workers are scarce is only half the battle. The next step in addressing labor shortages is implementing solutions to attract and retain new workers.
Learn how the U.S. Chamber of Commerce is driving solutions through the America Works Initiative. For more information about the America Works Initiative, contact Stephanie Ferguson at email@example.com.
About the author
Stephanie Ferguson is Director of Global Employment Policy and Special Initiatives. Her research on labor shortages has been cited in the Wall Street Journal, the Washington Post, and the Associated Press.