Within the course of a year the U.S. economy went from having its worst unemployment crisis since the great depression to not being able to fill millions of open jobs. It seems paradoxical on the surface, but government intervention played a large role in exacerbating both crisis’.
The Chamber of Commerce is now warning that this labor shortage itself is a “national economic crisis,” and one that is worsening.
As Fox Business reported:
A worker shortage plaguing businesses has continued to worsen in recent months, posing a new threat to the economy’s tepid recovery from the coronavirus pandemic, according to a new report published Tuesday by the U.S. Chamber of Commerce.
The chamber found the U.S. had a record 8.1 million vacant job openings in March, the last month for which data is available – an increase of 600,000 from February. But there are only half as many available workers for each open job – roughly 1.4 available workers per opening – as there has been on average over the past 20 years.
“More than 90 percent of state and local chambers of commerce say worker shortages are holding back their economies, and more than 90 percent of industry association economists say employers in their sectors are struggling to find qualified workers for open jobs,” the report said.
We won’t have the unemployment stats for May until Friday, but we know that in April economists expected the U.S. economy would add one million jobs, bringing the unemployment rate down to 5.8%, Instead, the economy added only 266,000 jobs, the unemployment rate inched up slightly to 6.1%.
Some industries suffering labor shortages have been those that generally employ low-skilled work. While the leisure and hospitality industry added 331k jobs in April, the industry was still 2.9 million workers short of where it was before the pandemic. A study from the National Bureau of Economic Research last year found that 68% of those on unemployment at the time with the federal supplement made more than they did on the job, so it’s no surprise people would choose that over work until they have no other choice.
However, other industries suffering from the labor shortage include education and health services, as well as professional and business services.
Twenty-four Republican-led states have decided to do away with the weekly $300 federal boost, and job searchers did immediately spike in those states relative to the rest of the nation.
Matt Palumbo is the author of Dumb and Dumber: How Cuomo and de Blasio Ruined New York, Debunk This: Shattering Liberal Lies, and Spygate
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