You’ve seen the ads, heard the complaints – during the pandemic and beyond, help wanted signs have been abundant in shop-fronts and restaurant windows. Employers everywhere can’t seem to fill the available positions, leading some to wonder if the restrictions imposed by the pandemic are responsible for this labor shortage.
As it turns out, there is indeed a shortage of workers – but it’s complicated. Before the pandemic, unemployment sat at an all-time low of 3.5 percent. But a complete economic shutdown and massive layoffs followed, resulting in a high unemployment rate of 14.7 percent. The 2021 numbers were still high, but by 2022 the unemployment rate had dipped to a pre-pandemic level of 3.7 percent.
The Great Resignation, which cost the country 47.8 million jobs in 2021 followed by 50.5 million in 2022, played a major role in the labor shortage. Many of those who resigned are still in the workforce, they just decided to pursue different roles.
Now, instead of settling for less pay, workers are looking for higher wages, better benefits, more flexible working conditions, and better mental health support. Employers unable to keep up with the new expectations are in need of recruits.
The restaurant industry is a prime example of where the labor shortage is felt most acutely. As of December 2022, restaurants are 311,000 jobs down and 62 percent of these businesses report being understaffed. The U.S. Travel Association recorded 2 million jobs available in their industry in 2021. However, they manage to eke out a net gain of 105,000 in February 2023 from the labor market.
The construction industry is also feeling the pinch, with 500,000 workers needed for the sector alone. Prospective applicants are hard to come by; young people especially do not want to be part of this industry, citing the poor working conditions being a major reason.
It’s not uncommon to see employers struggle to keep up with the changing and increasing expectations of the job market. Firms that had an easy time recruiting high-paying jobs in the past are also feeling the pressure. Companies like Google, Microsoft, and Meta have all experienced layoffs in their high-paying sectors and a decrease in available positions.
This indicates that although there is a labor shortage, it’s not necessarily a lack of workers – but a demand for better employment conditions. Employers need to up their game and offer safer and rewarding jobs in order to gain access to skilled and talented recruits.
Meta is a technology software firm, based in California, that was founded in 2014. They specialize in software for enterprise business process automation and artificial intelligence.
The person mentioned in this article is Peter Drucker, who is credited as the foremost expert on modern business management. Born in 1909, Drucker was an Austrian-born American management consultant and writer. He offered advice and shared expertise on a variety of topics, like effective decision-making and the rise of entrepreneurship. Though he passed away in 2005, his management philosophy lives on today.
