10 Million Jobs and 8.4 Million Unemployed

Published 09/20/2021
 
Plenty of Job Openings But Not Enough Qualified Workers
 
There are currently 8.4 million unemployed and 10 million job openings. In ordinary times, this would put employers in the catbird seat. However, these are not ordinary times.
 
It may no longer be enough to simply hire and onboard employees with the normal and nominal introductions to company polices and familiarization with procedures and standard practices. This only works when a company has the advantage of an ample cache of qualified applicants to choose from.
 
The latest Labor Department data shows that nationwide, most industries have more job openings than people with the required previous experience. The obvious solution, although certainly not ideal, is expensive. Companies seeking to fill positions requiring specific skills will need to invest time and resources in training and education. In some areas where specific expertise is required, the employer may also need to invest in licensing and/or certification.
 
Adding to the slow recovery in some sectors, is the fact that the abundance of job openings right now are not in the same occupations – or the same locations, where people worked pre-pandemic. Picking up and moving stacks in the midst of a pandemic is not something that many workers are willing to do.
 
To demonstrate how much the Delta surge is weighing down job growth, in June and July, the U.S. gained nearly two million new jobs. However, August showed a disappointing 235,000 jobs added. Part of the decline may be due to a softening in demand for air travel, hotel accommodations and in-person dining. Additionally, as reported by Reuters, Raw material shortages have also made it harder for businesses to replenish inventories.
 
Motor vehicle sales tumbled 10.7% in August, prompting economists at Goldman Sachs and JPMorgan to slash third-quarter GDP growth estimates to as low as a 3.5% annualized rate from as high as 8.25%.
 
"At some point production should pick up, allowing for the restocking of inventories and supporting sales, but it is unclear exactly when this will occur," said Daniel Silver, an economist at JPMorgan in New York. "The recent spread of the Delta variant and persistence of broader supply chain issues has generated some downside risk to the near-term outlook."
 
Some experts have looked to the discontinuation or curtailment of federal weekly benefits to the unemployed, gig workers, and self-employed to act as a springboard for workers to jump back into the job market. However, it is not clear if this will be the case. In 22 states where benefits have already been phased out, workers did not rush back into the job market in great numbers.
 
There are other forces acting on the slowdown in the back-to-work dynamic. Resignations are at an all-time high, hitting 13.9% over pre-pandemic numbers. Much of this is a result of the “Great Reassessment”, as reported by Heather Long in the Washington Post. As she reported “There is also growing evidence — both anecdotal and in surveys — that a lot of people want to do something different with their lives than they did before the pandemic. The coronavirus outbreak has had a dramatic psychological effect on workers, and people are reassessing what they want to do and how they want to work, whether in an office, at home or some hybrid combination.
 
A Pew Research Center survey this year found that 66 percent of the unemployed had “seriously considered” changing their field of work, a far greater percentage than during the Great Recession”. 
 
There has also been a surge in retirement, 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.
 
All of this points to a very unsettling future in the job market. Whether many of these trends will continue, or merely be a blip in the data is yet to be seen. Whether the Delta variant lingers and continues to be a drag on the economy is unknown. The shrewd business owner will be smart to keep a close eye on developments in supply chains, vaccination rates and mandates, local and national data from state and federal labor departments, as well as the political machinations at home and in Washington.
 
If all of this seems to be a bit overwhelming, the professionals at Available Staffing Networking can help. We are always keeping abreast of the most recent developments that can impact our clients and are ready to discuss these issues and provide guidance whenever needed. Just give us a call. We would love to talk with you.