The United States Economy Struggles as Millions of Jobs Remain Unfilled
October 11, 2021
A record setting 10.1 million job positions are available in the United States. There are several reasons for this surge in unfilled positions. People are reassessing their overall lifestyle, while others have a fear of returning to the physical workplace for health and safety concerns. Additional unemployment benefits have provided some households enough supplemental income to remain out of work. Lastly, childcare in some instances is unaffordable and e-learning requirements keeps parents’ home. As a result, employers across the U.S. are struggling to find workers and some business owners are operating half staffed, closing early, modify menu options, increase prices and retiring early.
At the end of June, the unemployment rate was 5.9%. Unemployment is defined by jobless people that have actively looked for a job in the prior 4 weeks and are currently available to work. The number of workers unemployed for at least a year has increased by 248,000 in June, to 2.9 million people. In January 2021, the federal government added an additional $300 per week to the unemployment benefits totaling approximately $600 a week per unemployed person. The unemployment wages are $4.00 more per hour than the average U.S. hourly wage. Many unemployed citizens are getting paid more to stay home than go back to work. Twenty-six states have decided to discontinue the extra $300 weekly benefits before the original cutoff date of September 6th in hopes the unemployed will begin searching for jobs. The BLS reported in June that 8.7 million people reported were actively searching for a job.
“Now Hiring”, “Help Wanted” and “Bonus Incentive” signage is posted everywhere, yet employers continue struggling to hire employees. There were 266,000 jobs added in the month April, falling short of the roughly 1 million that many economists forecasted. In the same month, four million Americans quit their job, creating the highest number in April ever recorded by the Bureau of Labor Statistics.” A beach in New Jersey was unable to find someone to pick up trash for $24 per hour. In April of 2021, 44% of small business owners were unable to fill jobs. Jonathan Fowler, president of Fowler Holdings said, “Companies are shifting marketing dollars to hiring instead of trying to draw more customers. The national minimum wage has been $7.25 per hour since July 2009. In efforts to attract people to come back to work many companies have announced wage increases, bonus incentives, paid college tuition, free childcare and more. Bank of America, Target, Best Buy, Costco, and McDonalds are among some of the companies who have granted wage increases and bonus incentives. As a result, businesses have created competition with each other. Despite their efforts, most employers are not seeing expected results. Kavon’s Ice Cream Parlor in Pittsburgh is one of the exceptions. The ice cream shop increased the hourly wage from $7.25 to $15.00, nearly doubling the payroll. The business received over 1,000 job applications, filling 16 staff positions seemingly overnight according to co-owner Jacob Hanchar. The wage increase has helped the business by decreasing the number of workers who usually leave for better pay.
Since March 2020, the job market has experienced significant changes in the way people view their career. Working from home and partial isolation from co-workers and clients for over a year has caused people to reassess how they live, work and function. Front-line workers are seeing high levels of burnout, triggering some to seek new career paths. In addition, the inability to work remote, childcare expenses, excessive unemployment benefits, lifestyle reassessment, low paying wages, and public health concerns are other reasons most people are not returning to work. Self-employment opportunities such as GrubHub, Uber Eats and Doordash have also slowed the return of workers to the physical workplace. With some schools still participating in e-learning parents are finding it challenging go back to work due to expensive childcare. Baby boomers have decided now is a good time to retire after realizing how short and precious life is. Some workers are afraid of getting sick again and feel unsafe being exposed to co-workers and customers.
Economists have forecasted for months that some jobs will not return once the economy becomes stable again due to new technology. Some of these jobs include hotel check in desk workers, valets, toll booth workers and some serving jobs. Extraordinarily long wait times, food shortage, unavailable seating at restaurants and spiked prices are the result of being understaffed. Both employers and consumers are affected by the deficiency. Plastic ware, paper goods and food items are scarce at some businesses due to lack of delivery drivers. According to National Tank Truck Carriers, the trucking industry is down at approximately 50,000 drivers. This number is estimated to increase to 160,000 by 2023 according to Bob Costello, the chief economist. Trucking companies are hiring drivers in training in efforts to offset backlogged orders. Due to the truck driver shortage, a handful of gas stations in Southwest Missouri, Columbus Ohio and Eastern Iowa are experiencing a gasoline shortage.
Teenagers, mostly first-time job applicants with no experience or understanding of the job market, have capitalized on the abundance of available jobs. The employment rate for teens is 9.6%, which is the lowest since November 1953 according to data from the Federal Reserve Bank of St. Louis. The surge in teens seeking employment has provided hope for employers in sectors such as restaurants and retail, which have been struggling to regain workers the recent furlough. The boom in young people seeking work could be due to higher pay, as companies are bumping up entry-level wages to entice applicants. Wages for teens in service-sector jobs have risen 8% in the last two months, according to an analysis from Gusto of small businesses that use its payroll services.
As over ten million jobs remain unfilled, so do some people’s lives. The current state of the economy has changed the behavior patterns, thought process and lifestyle of the population. Long wait times at restaurants, product shortages, long lines and rising prices has inconvenienced society. Low wages, burn out, childcare expense, early retirement and unemployment are among the reasons for the disinterest in returning to the workplace. Getting employment back to normal may require employers to increase wages and offer hybrid work schedules conducive to the worker’s wants and needs.
Article by: Kasey Watkins, Data Ninja