Today’s labor shortage conditions could easily develop into one of the worst labor shortages in the last 50 years, particularly for businesses that employ blue-collar and service workers. This of course creates a huge strain and overall impact on the US economy.
It has been a tough year for the hospitality and restaurant industry, and even after opening at full capacity, the struggle continues. Some restaurants are even reducing business hours because they are understaffed. Unfortunately, the hospitality industry is not the only one suffering; electricians, plumbers, air conditioning companies, etc. are all in the same boat. Some are even offering sign-on bonuses with wages ranging over $30 an hour and are still not getting any applicants.
Areas all over the nation are experiencing a 1% unemployment rate. Fast food companies are having trouble recruiting and retaining minimum-wage employees. Some grocery stores have even been offering signing bonuses to entice cashiers. Salons cannot find enough hairdressers. Hotels cannot find cleaning or maintenance staff.
Unemployment in the US has been hovering at 4.3% for the last few months; the lowest in over 20 years. Upper-level management and tech positions currently have a 1.4% unemployment rate; an all-time low. There may be a short-term alleviation of the labor shortage in a few years because of the predicted future fluctuations.
Within 10 years our country may be experiencing a genuine labor crisis. According to estimates from the U.S. Labor Dept., the unemployment rate in seven years could be at 2%, which means that many businesses are going to have to acquire qualified workers from other sources. In turn, the job market 10 years from now will get even tighter. This will then diminish the labor pool as a result of population trends that are constricting the flow of new workers entering the workforce.
When the employment crunch really hits, many businesses will be unable to grow even in otherwise favorable economic conditions. The $1.9 trillion stimulus plan recently passed included weekly $300 unemployment benefits through September 6 to help Americans struggling financially. While many lawmakers and Americans lauded this provision as a form of much-needed pandemic relief, some experts have argued that these benefits might have actually discouraged unemployed workers from returning to work. While unemployment has been crucial in helping people during the pandemic, it’s important to find a balance that doesn’t disincentivize people from returning to work.