Labor Landscape: A Deep Dive into America's Labor Crisis

Businesses of all sizes and sectors have difficulty finding enough candidates to fill available positions. According to the most recent data, there are currently 9.5 million job openings in the United States but only 6.5 million unemployed people. Over 120,000 companies temporarily shuttered during the pandemic's peak, and over 30 million Americans lost their jobs. Since then, there has been a gradual decrease in unemployment and a steady increase in job openings.

Unprecedented Job Growth in 2022

Employers created a record 4.5 million new jobs in 2022. Though this suggests an expanding job market, there are still a lot of unfilled positions because of the labor shortage in the United States. The overall share of the population in the labor force has declined even though more Americans are now working than before the pandemic. The number of Americans available to fill these jobs would increase by 1.7 million if the current participation rate were equal to February 2020. Decades of declining labor force participation have resulted in a steadily smaller workforce, which is predicted to continue to shrink in the future.

Understanding The Gap

The labor force participation rate is 62.7%, from 67.2% in January 2001 to 63.3% in February 2020. There is no one cause for the persistent labor shortage; instead, it is the outcome of multiple factors. Moreover, a May 2022 survey conducted by the U.S. Chamber illuminates the viewpoints of jobless people who lost their jobs due to the pandemic.

Job Search Activity

Two-thirds (66%) of those who lost full-time jobs due to the pandemic are either not active in their search for new jobs or are only somewhat so.

Remote Work Preferences

About half (49%) are unwilling to accept employment that doesn't allow working remotely.

Perceived Job Necessity

More than a quarter (26%) believe it's no longer critical for them to return to work.

Career Adjustments

Nearly one in five have made significant changes, with 17% retiring, 19% becoming homemakers, and 14% working part-time.

Impact of Government Aid

Almost a quarter (24%) admit that receiving government assistance during the pandemic impacted their choice not to look for work.

Prioritizing Personal Growth

Younger respondents (ages 25-34) prioritize personal development, with 36% concentrating on learning new skills, retraining, or returning to the workforce.

A large but gradually closing gap separates open positions and unemployed people. Many Americans are being forced to return to the workforce due to high inflation eating away at the savings accounts they accrued during the pandemic. However, companies that increased staffing levels during the pandemic are now acclimating to the new average pace. This has led to a slowdown in hiring in some industries and some layoffs. However, those circumstances do not reflect the nature of the labor market as a whole.

The Great Reshuffle

As our workforce began to change, the idea of the Great Resignation gained popularity. People even started sharing their experiences of quitting their jobs for more free time or better opportunities, with the hashtag #quittok going viral.

But the issue is more complex than just individuals quitting their jobs. A better phrase to describe the high number of resignations in recent years would be the "Great Reshuffle." In 2023, over 34 million Americans resigned from their positions, with 3.7 million departures occurring in September alone. Since November 2020, the hiring rate has exceeded the resignation rate despite the high rates. This suggests that Americans actively seek out and seize more excellent opportunities from new employers and various industries and professions.

Knowing why employees aren't showing up for open positions is only half the story. Implementing strategies to draw in and keep new hires is the next stage in tackling the labor shortage.