Bill Schmick: Where have all the workers gone? It’s complicated, but COVID remains a big factor | Business


Help wanted posters continue to populate storefront windows in a multitude of service-related businesses across the nation.

The U.S. has 3 million more job openings than it did before the pandemic. This labor imbalance is entering its third year. Why has it been so difficult to remedy?

First, I would like to dismiss any assumption you may have that American workers are lazy and simply don’t want to work. That attitude is neither true, nor particularly helpful, in understanding the major forces that are at play in this nation. Instead, I see four main areas that largely explain America’s labor dilemma.

Let me start with older workers like myself, who left the work force. Prior to COVID-19, neither my wife nor I had any plans to retire, although we were both close to, and over, the typical retirement age. However, the risk to our health and life in the pre-vaccination days convinced us to leave the work force.

More than 3 million baby boomers did the same and retired early. That was 2.6 million more people than labor experts predicted. That left a big dent in the available work force.

In addition to early retirement, COVID-19, itself, continues to be an important reason for our labor shortage. The Brookings Institute believes COVID could be keeping as many as 4 million workers out of the labor force,

Despite its disappearance from the daily news feeds, mutations of COVID-19 are everywhere. In just 13 days, between June 29 and July 11, 2022, more than 3.9 million workers took sick leave due to catching the virus or having to care for someone who was infected. That is double the rate of sick leave due to COVID-19 in the same time period last year.

Another factor in this lopsided labor imbalance is the shortage of women in certain areas of the workforce, especially Black and Hispanic women without college degrees. These women made up a goodly portion of the work force in some service sectors like restaurants and retail stores. COVID infections are a factor in the decline in numbers, but the lack of access to affordable child care is the bigger problem keeping many women at home.

The simple fact is that there just are not enough people working in the child care sector to meet demand. Employment levels are 8.45 percent lower today than in February 2020. Even before COVID-19, the child care industry was in trouble, but its poor financial health today prevents most programs from offering competitive compensation in an already-tight labor market.

As it is, child care expenses are equal to or higher than the wages earned in many minimum wage jobs.

Immigration, or the lack thereof, has also crippled efforts to address the supply/demand imbalance of labor in the U.S. Normally, when a country can’t find enough workers to do the jobs necessary to keep an economy humming, they import labor from abroad. Not so under America’s recent immigration policies.

From picking apples in New England, to staffing high-tech positions in Silicon Valley, our present partisan policies have reduced those workers to a mere trickle. The U.S. issued 4 million nonimmigrant visas in 2021, which is half as many as it issued in 2019, and nowhere near the 10 million issued in 2016.

Last year, the number of L-1 visas (used to transfer an employee from a foreign country to the U.S.) dropped 68 percent to only 24,863, while temporary work visas saw a similar drop in numbers. The situation is expected to get worse as old visas expire and new visa issues continue to decline.

Many of the sectors that have the highest rates of unfilled positions are those that historically were filled by immigrants like hospitality and transportation. The unfortunate truth is that many immigrants often take jobs that Americans do not want to do. Most businesses know that, but that does not seem to matter to the voters and their representatives opposed to immigration.

There is some good news. Recent data has pointed to a rebound in workers reentering the job market, which has caused a rise in labor force participation. In August 2022, 786,000 people re-joined the labor force. My wife, for example, decided to go back to work, part time, this year.

However, the rate of gain for workers over 55 years of age fell in August 2022 to only 38.6 percent of the work force. Overall, just 2.8 percent of early retirees went back to work since the beginning of this year, according to data from the Census Bureau’s Current Population Survey.

As a result of these factors, the wage growth spiral we are experiencing will continue. And as it does, the inflation rate will continue to be a major problem for the Fed, for the economy, and for the stock market. Is there a chance that somehow the labor shortage will fix itself?

Doubtful, since I see little enthusiasm to expand immigration, nor for a comprehensive and universal answer to childcare. The rate of COVID-19 infections will continue to grow, since most Americans have decided to pretend it does not exist. And as for baby boomers like myself, we aren’t getting any younger.

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