Labor Shortage: These Industries Still Haven't Recovered From The Pandemic
Economists have been looking for signs to understand when a recession could start. According to last month's job report, a staggering 339,000 jobs were added by employers which is way more than the original predictions by experts, as per CNN Business.
Employers have been hiring since the first month of 2021. Employers added an average of 399,000 jobs each month in 2021. However, the numbers gradually declined in 2022. While many industries have successfully recovered and some are still recovering from the impact of the pandemic, there are some sectors that are still struggling to boost their human resource.
Industries That Are Short of Employees
Transportation
Labor shortages have taken a toll on the transport industry nationwide. The sector is looking to hire truck drivers, warehouse staff, couriers, skilled technicians, and transit workers.
Hospitality Industry
While the HRM Guide report says that the hospitality sector added an average of 82,000 jobs monthly in 2022, The American Hotel & Lodging Association reported that 87% of respondents were experiencing a labor shortage with 36% saying that it's severe.
Healthcare
The pandemic hit this sector the most. AMN Healthcare, which provides staff to hospitals and other healthcare facilities, reported that 85% of the facilities are facing a shortage of healthcare professionals.
Retail Trade
Retail Trade has fallen by 62,000 employees since August, according to the Bureau of Labor Statistics (BLS) data.
“Retailers are already running fairly lean,” a Deloitte consultant charged with examining the retail sector noted, per Forbes "How can retailers deliver the customer service promised and do it in a cost-effective manner with even fewer people? When customers are unhappy in the store, they go home and order it online."
How Did The Labor Shortage Begin In The First Place?
At the height of the pandemic, more than 120,000 businesses temporarily closed causing more than 30 million US workers to lose their jobs. Since then, the labor market has steadily recovered.
What Are The Key Factors Contributing To The Labor Shortage?
An increase in savings- Better unemployment benefits, stimulus checks and not being able to go out and spend money led to Americans adding $4 trillion to their savings accounts since early 2020, as per CNBC.
Early retirements: The pandemic drove more than 3 million adults to opt for early retirement. The number of adults getting detached from the labor force grew from 48.1% in Q3 of 2019 to 50.3% in Q3 of 2021.
Lack of access to childcare: Access to quality childcare has always been a problem in the States. Research by the US Chamber of Commerce Foundation found that major states in the US missed an estimated $2.7 billion annually for their economies because of the loopholes in the childcare system.
New start-ups: Over the last two years, nearly 10 million new businesses applied to register their businesses.
Is The Labor Shortage in The US Easing In Most States?
Moody Analytics projected that the gap between labor supply and demand is expected to narrow across G20 which in turn will ease the labor market tightness.
“Labor force participation rates for age cohorts under the age of 65 have returned to (or in some cases surpassed) their pre-pandemic levels in most G20 AEs (advanced economies), indicating that the last two years of strong wage growth have been largely successful in enticing workers back into the labor force."
“Modest growth in labor supply will also ease shortages, driven by higher participation rates from younger worker cohorts and fading pandemic-related frictions,” Moody’s strategists said as per CNBC.