Why Can’t Employers Find Workers?
- Enhanced Unemployment Benefits
- Lack of Child Care
- Fear of Getting Covid
The WSJ came up with those answers but listed them in reverse.
Why Work?
Reason number 1 is key. When you pay people more to be unemployed than they make employed you see charts like the lead chart.
Fear of getting Covid is a copout for “I’d rather collect unemployment.”
On top of unemployment insurance, we had three rounds of Covid stimulus, fired in shotgun fashion.
All Kinds of Shortages
Shortages are not just in job applications.
I searched the most recent Fed Beige Book, a synopsis of economic activity in the 12 Fed districts, and counted 42 instances of “short”.
Word of the Day Examples
- Auto sales grew, even as new-vehicle inventories remained constrained by microchip shortages.
- Commercial and delivery drivers were specifically cited as in short supply, as were specialty and skilled tradespeople.
- Both manufacturers and retailers faced delays and shortages of raw materials and finished goods.
- Commercial and residential real estate markets extended their earlier trends, as industrial properties and single-family homes remained in high demand and short supply.
- Hospitality contacts anticipate seasonal worker shortages this summer due to limits on visas
- Sales in some categories, notably furniture, have reportedly been constrained by inventory shortages due to supply chain delays.
- The main concerns expressed pertain to costs of materials and shortages of materials and skilled workers.
- The Texas freeze and the Suez Canal blockage further contributed to commodity shortages and price spikes.
- Material shortages tempered expectations for continued growth.
- Two-thirds of transportation contacts expected demand to improve further in coming months even as driver shortages persist.
- Manufacturers experienced robust growth and demand that often-exceeded production capacity, due in part to labor constraints and shortages and shipping delays of raw materials.
An quote from the Richmond that pertains directly to open positions and labor shortages.
Several contacts noted that they had open positions, but difficulties recruiting workers constrained employment growth. A hotelier said they were able to hire some front desk workers but had unfilled cleaning staff positions and little interest from workers in those jobs. Several firms also reported increased turnover and challenges retaining workers.
Mish
Several papers have established that the extra $600 in benefits distributed earlier in the pandemic had limited labor supply effects and likely didn’t disincentivize work, including one by the https://www.nber.org/papers/w28470and another by https://tobin.yale.edu/sites/default/files/files/C-19%20Articles/CARES-UI_identification_vF(1).pdf. The current supplemental benefit is worth half of what those papers reviewed.
“The 100% federally-paid unemployment benefits have boosted spending and contributed to the strong economic recovery,” Stettner said. “It’s shortsighted for the state to sacrifice that economic stimulus based on the anecdotal labor shortages concerns of a few employers, especially given the limited evidence of work disincentives from unemployment pay during the pandemic.”
There is pent up demand even in health care. Hospitals around us are now almost full of people that are now moving again but have fallen and injured themselves or deferred surgeries or other medical conditions. I expect there to be a post covid spike of deaths caused by malignant cancer and similar life threatening illnesses that were deferred.