|An analysis by Michael Papadopoulos, Associate Economist at The Conference Board|
The rapid rise in job openings to historic highs coupled with increasingly more workers quitting is leading to severe labor shortages, especially in leisure & hospitality, food service, and construction. With the economy rapidly reopening across the nation, there are now more job openings available for workers than ever recorded. Yet many firms are reporting difficulty in filling those positions. While this can be partly explained by labor supply constraints related to the pandemic, including workers’ health concerns and increased unemployment benefits, a wave of workers quitting their jobs at record rates is compounding these challenges.
Firms facing recruitment and retention difficulties have a few options at their disposal to increase the pool of potential workers in the short-term. They can increase compensation for current staff and new hires, lower skill requirements for new hires or wait for labor supply constraints to ease. We expect some people who left the labor force to re-enter as pandemic-related unemployment benefits expire and vaccination rates increase. However, they will not all return, and not immediately either. Wages in sectors with the most severe labor shortages are already rapidly increasing, and we expect this trend will continue across other sectors in the coming months as firms look to remain competitive in recruiting workers and fill vital positions.
For more insights into labor shortages and other top stories related to the job market, please visit The Conference Board’s new Labor Market Chart Hub, which is updated weekly.
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