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Editorial: Businesses are desperate for help. Where are the workers?

From the beginning, there have been concerns about the long-term effects of contracting COVID-19. Little did we understand the extent to which those lingering problems could be of a fiscal nature, as well as a physical one.

The signs of one of those lingering fiscal symptoms are readily visible all around: “Help Wanted,” “Now Hiring,” “Start Today,” “Signing Bonus,” “Now paying more!” and the more distressing “Temporarily closed due to lack of help.” Or sadly, in some cases, simply “Closed.”

Regardless of which theory you believe to be the root cause, there is no debating the fact that the American workforce is in disarray as millions of potential jobs exist without candidates to fill them.

And there are an abundance of theories.

Some believe time away from the work routine during the pandemic caused many employees to reconsider their place in the workforce and convinced them to try a different way to make a living. Others say the ongoing uncertainties about child care and in-person school attendance have forced parents to stay home. Some think employees working remotely during the pandemic will never again be satisfied with working on-site and thus now refuse jobs that require doing so.

Others point to the money flowing like water from Washington that, combined with reduced spending at the height of the pandemic, allowed some to build a financial cushion and be less in need of a regular paycheck than might be the norm (Since early 2020, U.S. residents have added nearly $4 trillion to their savings accounts.) 

And there are some for whom the fear of COVID in the workplace, or mandatory vaccination requirements, remain a deterrent.

In truth, there likely are a combination of factors causing worker shortages in every state, with all of those theories playing a role to some extent.

Whatever the cause, with the massive Baby Boomer generation aging out of the workplace and record numbers of potential workers choosing not to be employed, the nation’s businesses are desperate for help.

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According to a study released by the U.S. Chamber of Commerce earlier this month, there were an estimated 11.3 million job openings in the United States in May, with about 5.9 million people looking for work. That translates into nearly two jobs available for every person looking for one.

The study found that more than 50% of jobs in the manufacturing sector are unfilled, as are nearly 50% in the leisure and hospitality industry, and wholesale and retail trade.

Every business, every day, is feeling the results of that worker shortage. Inflation is fueled by payrolls increasing as employers pay more to make hires. Supply chain issues are exacerbated by a shortage of employees all along the chain, from manufacturing plants to dockhands needed to unload ships to truck drivers to deliver goods.

Some businesses are forced to cut back to survive. Others have to close down. Some, especially in service industries, simply can’t keep up with demand. As a result, you can’t sit down and eat at some restaurants, can’t get a technician to come fix your air conditioner, can’t find what you are looking for on the grocery store shelves, can’t predict when deliveries may arrive.

Everyone is impacted.

A report compiled by the conservative Heritage Foundation found that a record high 72% of businesses reported in May of 2022 that they raised prices over the previous three months. The same report found 49% of businesses said they raised compensation in May, with another 25% saying they planned to do so before the end of August.

But while hourly pay increased more than 5% over the past year, those increases were wiped out by inflation so that real average earnings were down by 3%. Employers desperate for employees pay more to get them, then raise prices to offset the cost. It’s a vicious cycle, and one that isn’t sustainable long term.

The Heritage Foundation study found the employment gap to be particularly bad within two specific age groups – young people age 20-24 and older workers age 55-64. Potential employees in those age ranges aren’t looking for work at the same rate they did pre-pandemic.

The study makes several demographic-based recommendations, including more focus on apprenticeship programs and job-related training rather than college for potential younger employees, and elimination of the penalty that reduces Social Security payments for those on the older end of the spectrum if they continue to draw a paycheck after applying for benefits.

The absence of those in the 20-24 age group from the current workforce is particularly concerning, as those typically would be the employees on whose backs future economic growth would ride.

The chamber study shows that the pandemic had driven more than 3 million employees into early retirement as of October 2021. With older employees leaving the workplace on one end of the spectrum and younger employees not joining it on the other, it isn’t hard to see why there are massive shortages.

There are so many different factors at play in the chaos of the current workforce that it is hard to pinpoint how best to address the issue. Enticing older employees to extend their careers will help, but the real key is doing whatever it takes to get those younger people back into the job market.