Why are more advertised positions going unfilled?
First, that “more” is accurate. Per “U.S. job openings, quits hit record highs in April” (Lucia Mutikani, Reuters, June 8th), on April 30th there were 9.3 million of them, at least a 20-year high. Yet the American Job Shortage Number (AJSN), based on data collected two or three weeks later, showed latent demand for 19.9 million additional positions, almost 4 million more than its 2019-2020 pre-pandemic low. Clearly something is happening, but what is it?
We have seen two cases of dueling headlines here. Combatants on the first, on the effect of higher jobless compensation, included “Job searches haven’t jumped in states canceling unemployment benefits early” (Denitsa Tsekova, Yahoo Money, June 22nd) and “U.S. jobless claims dropping faster in states ending federal benefit” (Howard Schneider, Reuters, June 24th), followed by a left-of-center synthesis attempt by Patricia Cohen in the June 27th New York Times, “Where Jobless Benefits Were Cut, Jobs Are Still Hard to Fill.” All three pieces use largely different sets of seemingly legitimate data, so it is hard to argue with any of them, but the most insight came from a photo included with Cohen’s article. It was captioned as a restaurant in St. Louis, with two signs reading “Now Hiring! Experienced Servers and Bartenders!” With such positions needing only a week or two of training and practice for adequate initial performance, it was interesting to see one unmentioned solution next to several hundred words bemoaning a problem.
The second controversial area was exemplified by Jeffrey Bartash’s July 6th MarketWatch “The red-hot U.S. economy cools off, ISM finds, because of major shortages and not enough workers.” The author here cited an Institute for Supply Management pronouncement that not only are too few people taking jobs for “restaurants and retailers,” but such firms cannot “get all the supplies they need.” However, four days before in HuffPost, Arthur Delaney had a piece titled “Despite ‘Worker Shortage,’ Businesses Keep Finding Workers,” in which he maintained that June’s 850,000 net new nonfarm payroll growth was exceedingly high, logistically, to process for one month. He also cited a source saying that restaurant hourly pay was 11.2% higher than a year ago.
Other weak apparent-worker-shortage explanations came from two other sources. Quentin Fottrell’s May 25th MarketWatch “’Contagious unemployment’ is one theory why companies have difficulty hiring workers,” which on closer scrutiny was only the old practice of disregarding or factoring down the credentials of applicants long jobless, with responsibility properly shifted by author and Wharton professor Peter Cappelli to companies’ hiring practices. Many especially on the left would be glad to see that “There isn’t a worker shortage in the U.S. – there’s been a worker awakening” (Hope King, Axios, June 16th), but while I agree with the first headline clause, it’s too soon to assume that the second, though possibly in progress, is at hand already. Christopher Rugaber got warmer with “Fewer working-age people could slow the economy” (Times Herald-Record, July 5th), pointing out that people from the late 1950s, when more American babies were born than in any other time in history, are now turning 65 and causing historic, though, small, drops in the 16-64 age cohort. Still, the AJSN tells us that latent demand for employment is deeper and wider than the 0.1% reduction Rugaber named.
So what is the solution? Bartash may not have seen it this way, but why have restaurant wages, in times of too few employees chasing potentially surging sales, increased just over 10%? Why not 20%, 30%, or more? If employers fear that paying what they need to get the workers they require must be permanent, they can frame their money offerings as temporary. If they think raising prices will boot away customers forever, they should recheck that assumption – most have heard about inflation, along with scarcer low-paid labor, for months now, and they, who are often flush from not spending as much for over a year, want that restaurant meal or what’s been missing on Walmart shelves. If managers have always hired only workers with experience, the personalities they prefer, or current employment, not to mention illegal attributes, they are paying a steep price in lost business for what are now luxuries. We know much less than we think we do about what working life will be like after, say, the first of the year, but we can’t wait to find out. Money’s a wasting – companies as well as people wanting jobs need to get it while they can.