Five million potential employees are still missing in action
By Joe Higgins, Quest4Quality
We are undoubtedly in unprecedented times: COVID 19, inflation, recession and housing are just some of the problems affecting our economy.
However, the question I get asked most often is, “Where have all the workers gone?” It is a complex issue, and no one single thing has led to the extreme shortage of good people.
The confounding thing is that two jobs are available for every unemployed worker in the U.S. There are 11 million job openings against about 5 million folks who are considered unemployed. Many BrandSource dealers told me that if we do go into a recession, they will hold onto their employees for fear of being unable to find new ones later.
One serious issue we all have faced is the perceived incompetence of workers everywhere — at the airport, in restaurants, in hotels and even in customer support jobs. We are frustrated, although it may not be incompetence but just millions of workers learning a new skill set. The quit rates are the highest in history, suggesting that many employees are like interns, finding their way at work.
The tragedy is that even if all 5 million unemployed workers were to find jobs, 5 million help-wanted signs would still be hanging in businesses nationwide.The reasons for the shortage are varied and part of a larger narrative facing America’s businesses. It began with the pandemic and its consequences.
Millions of us contracted COVID 19 since 2019 and more than 100,000 small business owners shut their doors and tried to weather the storm. In April 2020 alone, 21 million Americans lost their jobs. The unemployment rate rose to 14.5%, the highest monthly level since 1949, and our country entered a pandemic-induced recession.
Since then, 10,000 baby boomers a day have turned 65 and retired. This mass exodus of a generation of 80 million has left thousands of open positions nationwide.
Meanwhile, service-related businesses added almost 5 million jobs last year as the economy opened up following a long hiatus. Americans started to travel, consumers spent like crazy on durable goods, and the price of housing skyrocketed as employees left their offices and began working from home. The leisure and travel industry scooped up as many employees as possible, and the labor shortage became severe.
Women were impacted most by this changing world. As the primary caregivers, they stayed home with their children after schools were locked down and took on the task of homeschooling and raising the kids fulltime. Quitting proved less expensive than childcare, so they gave up good jobs.
As a result, today’s labor participation rate among women is the lowest since 1980, when females emerged as a business force. From March 2020 until today, nearly 4 million women quit work to attend to responsibilities at home.
Other workers were bedridden by COVID 19 and weren’t well enough to return to work, or stayed home to care for sickened family members including elderly parents or grandparents who suffered greatly from the virus.
Employees were also fearful of contracting COVID in offices that remained open. Many more no longer wanted consumer-facing jobs and decided to train for a new career with higher pay, or “quietly quit,” which is defined as doing just enough work to get by until a better opportunity comes along.
Research also shows that many laid-off workers did what Americans have always done: they started small businesses. Applications for new businesses soared to more than 11 million over the past two years, which was made possible by the trillions of dollars that flowed from the federal government’s very generous stimulus program into saving accounts. For others, the extra cash from extended unemployment benefits allowed them to slow-walk their need to work.
I’m sure many other reasons are motivating workers to remain on the sidelines in 2023. If I had to summarize what it is they want, it would be rewarding work, higher pay and better working conditions. But whatever it is that’s holding back those 5 million potential employees, you can be sure that all of them will have to pay their bills at some point.
Joe Higgins is a 44-year veteran of GE and Whirlpool Corp. who brings his executive experience to bear as a business consultant, AVB keynoter and YSN contributor. Visit his website, Quest 4 Quality with Joe, at Q4QwithJoe.com.