In “Why America has 8.4 million unemployed when there are 10 million job openings,” WaPo economic reporters Heather Long, Alyssa Fowers, and Andrew Van Dam point to several mismatches.
A mystery sits at the heart of the economic recovery: There are 10 million job openings, yet more than 8.4 million unemployed are still actively looking for work.
The job market looks, in some ways, like a boom-time situation. Business owners complain they can’t find enough workers, pay is rising rapidly, and customers are greeted with “please be patient, we’re short-staffed” signs at many stores and restaurants.
But the nation remains in the midst of a deadly pandemic with covid-19 hospitalizations back at their highest rates since January.The surge is weighing on the labor market again, with a mere 235,000 jobs added in August. There are still 5 million fewer jobs compared to before the pandemic, reflecting ongoing problems, including child care as some schools and day cares shut down again from outbreaks.
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At heart, there is a massive reallocation underway in the economy that’s triggering a “Great Reassessment” of work in America from both the employer and employee perspectives. Workers are shifting where they want to work — and how. For some, this is a personal choice. The pandemic and all of the anxieties, lockdowns and time at home have changed people. Some want to work remotely forever. Others want to spend more time with family. And others want a more flexible or more meaningful career path. It’s the “you only live once” mentality on steroids. Meanwhile, companies are beefing up automation and redoing entire supply chains and office setups.
The reassessment is playing out in all facets of the labor market this year, as people make very different decisions about work than they did pre-pandemic. Resignations are the highest on record — up 13 percent over pre-pandemic levels. There are 4.9 million more people who aren’t working or looking for work than there were before the pandemic. There’s a surge in retirements with 3.6 million people retiring during the pandemic, or more than 2 million more than expected. And there’s been a boost in entrepreneurship that has caused the biggest jump in years in new business applications.
So, it makes sense that the pandemic has caused people to reassess their life. Some older folks who were working to sock away a few extra dollars for their retirement figured that it just wasn’t worth it anymore. Folks tired of working for others are starting their own businesses. But they shouldn’t be showing up in the unemployment numbers.
This is more helpful:
It doesn’t help that the abundance of job openings right now are not in the same occupations — or same locations — where people worked pre-pandemic.
There is a fundamental mismatch between what industries have the most job openings now and how many unemployed people used to work in that industry pre-pandemic. For example, there are 1.8 million job openings in professional and business services and fewer than 925,000 people whose most recent job was in that sector. Leisure and hospitality, as well as retail and wholesale trade, also have more openings than prior workers, and many workers who lost jobs in those industries have indicated they don’t want to return.
There’s a similar mismatch in education and health services, where there are 1.7 million job openings and only 1.1 million people whose last job was in that sector.
Here’s a handy dandy graphic:
So, again, this is only partly explanatory. If the jobs now on offer don’t match the skills of those seeking jobs, it’s obviously problematic. But construction appears to be the only sector with markedly more folks looking for jobs than available openings. Why aren’t people in those other sectors flocking back to work?
In recent months, heath care workers and educators have quit their jobs at the highest rate on record, stretching back to 2002, Labor Department data show.
“This is typically the time of year we recruit for the upcoming school year, but we literally can’t get enough candidates, and we’re seeing tenured people leave,” said Cindy Lehnhoff, a 36-year veteran of the child care industry who currently heads the National Child Care Association. “If you get one good candidate, there are 10 others contacting that same person. It’s a crisis. People can’t work without child care.”
Lehnhoff has been helping a child care center in northern Virginia recruit more staff. Their infant room remains closed, because they don’t have enough people, and one of their veteran workers was just poached by a nearby elementary school. As she spoke with The Washington Post, Lehnhoff pored over the Indeed.com job portal. It showed more than 2,000 job posts in the Fairfax County, Va., area for child care teaching assistants. Most paid $12 to $13 an hour, a bit less than many nearby fast food restaurants and retail stores.
So, this mismatch makes sense. Low-paying sectors are having trouble getting folks to take the increased risk of COVID exposure. That childcare pays less than food service, for example, is obviously a red flag. (We’re also having a heck of a time finding people to drive school buses.) But, again, this is just one sector among many unable to fill openings.
Nationwide, most industries have more job openings than people with prior experience in that sector, Labor Department data show. That’s a very different situation than after the Great Recession, when the number of unemployed far outstripped jobs available in every sector for years. To find enough workers, companies may need to train workers and entice people to switch careers, a process which generally takes longer, especially in fields that require special licenses.
While companies say they are struggling to find workers, many unemployed say they are having trouble getting hired, especially if they haven’t worked for a year.
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Some Americans are being forced to shift careers whether they want to or not. The pandemic has lingered longer than anyone initially anticipated and the ranks of long-term unemployed have swelled. About 40 percent of the currently unemployed — 3.2 million — have been out of work for six months or longer.
Years of research, especially after the Great Recession, show these people have a much harder time getting back to work. Hiring managers are skeptical that their skills are still fresh, and these workers’ prior jobs and employers are often gone, forcing job seekers to rely on sending out resumes online without any personal connections.
This points to a systemic problem. As a general rule, I get why employers would prefer folks who have recent work experience and would be suspicious of those who have been out of work for an extended period. But, goodness, the pandemic has been in the news a lot. You’d think hirers would be aware of the uniqueness of the circumstances.
Additionally, there are regional mismatches at work.
But, as Federal Reserve Chair Jerome H. Powell put it recently, it’s been a “vigorous but uneven recovery.” Job losses remain steepest for Black and Hispanic women, as well as Americans without college degrees.
The uneven recovery is evident in how different states are faring. In some areas of the country, the labor market is booming. All the slack has vanished in Idaho and Utah, where employment recovered months ago and the unemployment rates were nearing their all-time lows at 2.6 percent and 3 percent respectively. But other states are still reeling: Hawaii is still missing 12 percent of its jobs, New York is still missing 9 percent, and Nevada and Alaska are more than 7 percent behind, as tourism-dependent economies struggle amid fast-spreading covid-19 variants.
Similarly, urban downtowns inSan Francisco and Washington D.C. have struggled to rebound as more office workers remain at home. The shops and restaurants that supported these office workers aren’t coming back yet, especially as bellwether employers such as Google, Amazon, Apple and Facebook push back openings to January. (Amazon founder Jeff Bezos owns The Washington Post). Meanwhile, the most urgent need for workers is often in suburban areas, where housing costs have skyrocketed, making it difficult for low-wage workers to live there.
As the recovery proceeds, the holes in the labor force have shifted. Half of all jobs are still missing in high-contact industries such as buffets and movie theaters, but other industries that were hit harder in the early days of the crisis, such as RV dealers, carwashes, breweries and appliance stores, have staged a full comeback, buoyed by record consumer spending on goods.
Some lucky industries, such as delivery services, mortgage lenders, and breakfast-cereal manufacturers seemed to have sailed through the entire crisis without shedding jobs. They now have 10 or even 20 percent more employees than they did in February of 2020.
Of course, delivery service work is some of the lowest paying and least rewarding. And there may well be a breakfast cereal bubble; people are going to go back to work eventually.
