Now people in America are suffering from fewer flights, sluggish ports, late deliveries, and restaurants that don’t open on time, all rooted in an unexpected labor shortage.

According to the U.S. Chamber of Commerce, the U.S. currently has 11.3 million unfilled jobs, while only 6 million people are unemployed. That means if every unemployed person in the United States finds a job and comes back to work, there are still over 5 million open jobs. Why is there such a huge employment gap in the labor market?

Factors contributing to the labor shortage

In early 2020, the breakup of COVID-19 threatened the world, and the order of production and life was changed dramatically by the virus. Thousands of businesses are temporarily closed and more than 30 million people in America lost their jobs. Since then, job openings keep increasing steadily. Now the pandemic is still spreading in the United States. Moreover, a report from CBS states that millions of people are now struggling with long-term symptoms after contracting COVID-19, with many of them unable to work due to chronic health issues.

Katie Bach, a nonresident senior fellow at the Brookings Institution, made an analysis about the labor market influenced by the long covid. Her analysis found that almost 1.6 million people are missing from the full-time workforce because of the disease, which can leave people incapacitated for months with persistent symptoms including fatigue, brain fog, headaches, memory loss, and heart palpitations.

Except for employees in restaurants, hotels, retail stores, and other enterprises in many places who have to ask for leave due to novel coronavirus infection, there are also workers who leave to take care of their infected family members or still don’t want to go back to work with safety concerns. From June 29 to July 11, 3.9 million people in the United States did not return to work because of an infection or caring for infected relatives and friends. That’s up from 1.8 million in the same period last year.

 

Robert Fleming, a Los Angeles restaurateur, now has to worry about not only running his restaurant but also being a busboy, a waiter, and even cleaning up.  Mr. Fleming said the restaurant had been closed earlier this month because of the staff who had contracted novel coronavirus or had a history of virus exposure. Such absences are now common in the United States.

While pandemic is not the only one that shall be blamed for the employment gap. Some employees are shutting down for the summer holidays and taking planned summer breaks. From June 29 to July 11, 4.8 million people took a vacation or personal leave, compared with 3.7 million in the same period in 2021, according to the U.S. Department of Labor.

Early retirement is the other factor that contributed to the labor shortage. As of October 2021, the pandemic caused more than 3 million adults to retire early. The number of seniors over 55 who dropped out of the labor market due to retirement increased from 48.1 percent in the third quarter of 2019 to 50.3 percent in the third quarter of 2021.

The labor shortage in different industries

Although there is a huge employment gap in the labor force market, the scale of the shortage varies by industry. As the pandemic is still taking a toll on people’s lives, jobs that need in-person attendance with a lower salary compared to jobs in other industries are more difficult to retain or recruit employees.

According to a study conducted by CouponBirds, the industry with the largest number of departures through August 2021 was food and hospitality. The resignation rate in food service reached 6.8%, staying in the highest position. The following industry with a high resignation rate is retail trade, taking 4.7%. Apart from that, durable goods manufacturing, education, and health services also have a labor shortage—these industries have more open jobs than unemployed workers with experience in their respective industries. Even if every unemployed person with experience in the durable goods manufacturing industry were employed, the industry would only fill 65% of the vacant jobs.

On the contrary, in the transportation, construction, and mining industries, there is a labor surplus. There are more unemployed workers with experience in their respective industries than the open jobs required.

How employers fight labor shortages

The immediate consequence of the labor shortage is higher labor costs. Many employers have to make workers a better offer to retain the workforce and recruit new employees which include higher wages and benefits, well training, and working conditions to remain competitive.

To fight against this shortage, employers are targeting the teenage workforce. Statistics show that more American teenagers are in the labor force now than a decade ago, and teen gigs are filling gaps in retail, tourism, hospitality, and other industries. Overall, more than 6 million U.S. teens, or 36.6%, had a paying job for at least part of last summer, marking the highest teen summer employment rate since 2008, according to a Pew Research Center analysis of data from the Bureau of Labor Statistics.

 

The restaurant may be the unlucky one among those industries with the labor shortage, some of them have to shorten the opening hours of the restaurant and close some ordering windows because the working habits of many restaurant workers are changed by the pandemic. Many of them now prefer to do odd jobs during the day and spend time with their families at night.

Although people now are getting used to living under the pandemic, and most of them have started to return to normal life, the great changes caused by the pandemic and other factors will not be restored in a short time, like the unprecedented labor shortage. The labor shortage affects everything from shopping, eating out, producing and transporting goods, to taking buses and airplanes. However, it is also an opportunity for workers to get a better job.