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- There are currently anecdotal labor shortages across the economy as employers scramble to find workers.
- This is another marker of the bizarre trend in the labor market where millions of people are unemployed, but workers are quitting en masse.
- Labor Secretary Marty Walsh attributes shortages to the virus, its unprecedented times and workers rethinking what they want.
In case you haven’t heard, there is a bit of a labor shortage.
Everywhere you look there seem to be anecdotes about companies struggling to hire and retain workers. A Starbucks in Ohio is reducing its hours of operation and closing Wednesdays and Thursdays due to understaffing. A Midwestern grocery chain closes an hour earlier and offers staff members a retention bonus of $ 600.
Despite this, workers quit at a record pace for four consecutive months. In July, the last month for which the Bureau of Labor Statistics released data, there were still more job postings than workers available. The BLS on Friday said the United States created a meager 194,000 jobs in September, well below economists’ expectations.
All in all, it is still a month marked by shortages and a reshuffle of the labor market, even as millions of people still remain unemployed. But what is driving these persistent holes? Insider spoke to Labor Secretary Marty Walsh after Friday’s jobs posting and he identified three potential drivers.
(1) “We are living in unprecedented times”
Put simply, Walsh said “unprecedented times” are one of the reasons for the shortages.
Job hunting and hiring during a pandemic is certainly different, with a new math for workers. A face-to-face job could lead to increased risk or lead a parent away from a child who completes virtual school. Workers are also facing an unbalanced recovery, with sectors like leisure and hospitality leading to new hires as areas like education are still lagging behind.
A June survey of 1,800 workers by remote and flexible job site FlexJobs found that 48% of workers were frustrated with the search, and 46% said they only found opportunities for positions low paid. This skills mismatch is one of the drivers of the current shortages.
Another lag impacting hiring: During the pandemic, workers moved out of hiring areas and they no longer want to commute.
(2) Health concerns
“The virus is still with us,” Walsh said, noting that hundreds of thousands of Americans have died. Indeed, the rise of the highly infectious Delta variant resulted in dismal job additions in August and September, showing that the virus – not improved unemployment benefits – is keeping workers at home.
The Census Bureau’s Household Pulse Survey asks respondents why they are not working. Of those polled from September 1 to 13, around 4.65 million said the main reason they were not working was “I was taking care of someone or I was suffering from symptoms of coronavirus myself.” At the end of July, around two million people said this was their main reason for not working, meaning that as Delta increased, the number of people not working on symptoms nearly doubled.
US Transportation Secretary Pete Buttigieg, Labor Secretary Marty Walsh, and Housing and Urban Development Secretary Marcia Fudge.
Alex Wong / Getty Images
(3) People rethink life and work
“I think a lot of people are re-imagining or rethinking what to expect,” Walsh said. This is what organizational psychologist Anthony Klotz called “The Great Resignation”.
Klotz previously told Insider that Americans viewed their role as workers as essential to their identity. This may have been disrupted by the pandemic, as workers were suddenly fired, sent home or burned. Klotz noted that organizational research shows that contact with death or disease – something tragically abundant during a pandemic – prompts people to step back and ask existential questions about their purpose and happiness. For many workers today, flexibility is key.
“I have spoken to many companies who have said that some people have just decided to leave the industry they are working in and are thinking about the next step for them,” Walsh said. “So I think the work-life balance played a big part in that.”
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