Report: Worker Shortage a ‘National Economic Crisis’

The inability of employers to hire qualified workers is hurting businesses and, in turn, holding back the economy, a new analysis from the U.S. Chamber of Commerce shows.

The chamber called the problem of businesses not being able to find the workers they need “a national economic crisis that is getting steadily worse.”

Among the findings in the chamber’s new study:

• A record high 8.1 million vacant job openings in the U.S. in March 2021, up more than 600,000 from February
• A 20-year-low of 1.4 available workers for every job opening—that’s half the historical average of 2.8 available workers per opening over the past 20 years
• There are actually fewer available workers than the total number of open jobs in several states and industries, including hard-hit sectors of private education and health services, and professional and businesses services
• More than 90% of local and state chambers say worker shortages are holding back their economies, and more than 90% of industry association economists say employers in their sectors are struggling to find qualified workers for open jobs

Reluctance

The chamber analyzed more than 20 years of federal job and employment data, then surveyed top industry association economists and local and state chamber leaders in its examination of the challenges employers are facing nationwide.

The study notes that employers in April 2021 created just 266,000 jobs when many analysts were expecting 1 million or more jobs.

Workers’ reluctance to return to work was one reason for the low job creation numbers, the study noted.

“Clearly businesses are hiring—if only there were workers ready, able, and willing to fill their open positions.”

But the ease with which workers can land a new job—the percentage of workers leaving their jobs voluntarily now exceeds pre-pandemic levels—could also be a factor, the chamber said.

The May 2021 jobs report showed an improvement with the economy adding another 559,000 jobs.

“Clearly businesses are hiring—if only there were workers ready, able, and willing to fill their open positions,” the chamber said.

Sector Impact

The worker availability ratio is harder on some sectors than others.

The leisure and hospitality industry currently is currently at the 1.4 available worker ratio, but wholesale and retail trade is at 1.27, manufacturing at 1.15,  financial services at 1.05.

However, professional and business services at .96 and private educational and health services at .88 have less than one available worker per opening.

The post-COVID era = the Perfect Storm. Not enough willing workers + highest demand ever + employers inadvertently pushing away their employees by forcing them back to the office. Employers are going to lose this battle and will have to compromise. https://t.co/5aMfr3UjiD

— David Lewis (@DavidLewisHR) June 6, 2021

In the study’s survey of local and state chambers, 90.5% said the top factor slowing economic growth was the lack of available workers.

Other factors holding back local and state economies include COVID-19 issues (45%), uncertainty (37%), potential federal policy changes (37%), potential state and local policy changes (29%), and current or proposed regulations (32%).

The majority of employers—77%—are having trouble hiring. That includes 53% who say hiring is “difficult” and 24% who find it “very difficult.”

Barriers

An overwhelming 83% said it was “harder” or “significantly harder” to hire workers today compared to five years ago.

“Keeping our economy growing requires that we fill these jobs,” the chamber said.

An overwhelming 83% said it was “harder” or “significantly harder” to hire workers today compared to five years ago.

“To do so, we need to remove barriers that prevent people from entering the workforce, get individuals the skills they need for the open positions, and enact a sensible immigration policy.

“If business and  government work together to grow our workforce, we can once again build a vibrant prosperous nation and lead the world economy for years to come.”