Business & Investment

Why are more companies not filling their jobs when 8 million Americans are absent from work?

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San Francisco / Washington — Employers say they can’t meet the need for a yawning workforce as the economy recovers to meet the fierce demand of tens of millions of newly vaccinated Americans I will.

Take Alex Washut. In January, he planned to hire two breakfast and lunch eateries in western Massachusetts and thought he needed to hire 20 new cooks, servers, dishwashers, and other staff by May. I did. He doubled his wages in some cases, but could only hire five people. In most cases, he said, job seekers don’t even appear in interviews.

At the same time, the U.S. economy has lost more than 8 million jobs since before the pandemic, and the Federal Reserve Board said the true unemployment rate is closer to 10% than the 5.8% government reports expect to show on Friday. It states.

Analysts estimate that U.S. employers added nearly a million new jobs last month, but the question isn’t why U.S. employers hired so much, but why they hired more. I wonder if it wasn’t there.

What do you get? It’s a long list, but here are some highlights.

* Parents, especially mothers, are unable to work because they are at home to monitor their children due to school or day care leave or reduced hours.

* With the pandemic still killing about 700 Americans every day, potential workers continue to be concerned about health risks.

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* The rise in the stock market has given some older workers a cushion to retire.

* Some young workers are finding jobs in new areas and are shrinking the industrial workforce pool they have left behind.

* Many employers need to fill jobs that require skills that bystanders may not have.

* Employers complain that they are happy with collecting checks rather than working to earn a living, due to increased unemployment benefits and other government aid. More than 16 million people still receive some form of unemployment benefits, more than a year after the pandemic, according to data released by the Ministry of Labor on Thursday.

“We recognize that labor supply is affected by a pandemic … (but) increased unemployment benefits are now affecting Americans’ willingness to work,” said White House spokeswoman Karine Jean-Pierre. There is little evidence of this. “

What is the total? In a nutshell, this is: According to a National Federation of Independent Business Association survey, 42% of small businesses had jobs that could not be filled in March.

Economists say that if employers need workers so badly, they will raise wages. So far, that hasn’t happened. US compensation rose faster than expected in the first quarter, but the rise was primarily due to a one-time bonus to workers in the financial sector and was not widely shared.

“The full text is’I can’t find a worker for the wages I want to offer’. The end,” said ADP Chief Economist Nera Richardson. “You can find a worker.”

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September eyes

Over the next few months, analysts will show how the labor market adapts to the biggest changes since the return of millions of soldiers after World War II and the closure of wartime assembly lines. I am watching carefully. It may be the end of summer before true clarity emerges.

Deutsche Bank economist Matthew Luzetti said, “Finally in September, we saw schools reopen and unemployment benefits declined somewhat, alleviating many of these labor shortage problems. I’m looking forward to it. “

Alternatively, as Cleveland Fed Governor Loretta Mester said Wednesday, as vaccinations increase and more schools return to face-to-face learning, “in reaching a better balance of the labor market between supply and demand. Let’s do it. “

It is not uncommon for a depressed labor market to take some time to untwist.

After the last recession, a Fed study showed employers moaning about labor shortages in 2012, when the unemployment rate was above 8%. A few years later, workers flooded the labor market when compensation began to rise in earnest.

“What we saw was that labor supply was generally emerging,” said Federal Reserve Board Chairman Jerome Powell last month. “In other words, if we were worried about a shortage of workers, it seemed we never did.”

This time, the rebalancing could be faster, as the economy is projected to grow at the fastest pace since 1984. The Fed is watching what happens to wages and prices.

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Would you like to go back to the kitchen?No

Bill Spriggs, chief economist at AFL-CIO and professor at Howard University, said some workers in unemployed industries, such as restaurants and retail, have moved the sector completely.

Some people who had low-paying jobs before the pandemic said they were struggling to cover their bill even before the crisis and might be looking for more financial security. He said.

At the time of the pandemic, 33-year-old Drew Hall worked as an executive chef in South Philadelphia. His restaurant was closed for six weeks, reopened for takeaway, and then closed again.

“I decided I needed to do something different,” said Hall, who was laid off. He attended a coding school, graduated in December, and was hired two weeks later. Since then, he has made several offers to return to the restaurant business. “I’m not going to do that,” he said.

The profit of the hall is the loss of the restaurant industry. Washington-based restaurant operator Knead Hospitality is desperate for workers and offers servers, cooks and bartenders a recruitment bonus of up to $ 1,000.

Massachusetts restaurant owner Washut said he believes he needs to set an hourly wage from the current $ 15 to $ 19 to seduce people who collect unemployment benefits. That means raising the wages of existing staff even higher, or risking them experiencing short-term changes. To pay for all these raises, you need to raise the price of a $ 12 plate of Caribbean jerk chicken hashes and eggs. “And who pays $ 20 for a hash order?”

Jimmy Nigg, who runs the Monkey Barrel Bar in Denver, is on a similar ship. He often makes $ 5.95 cheeseburgers in the kitchen or serves $ 6 craft beer behind the bar because he can’t find staff, but now he’s a cook near $ 19 an hour. Is provided.

Still, he bets that the upward pressure on wages is temporary.

By September, he said, people would be happy to receive “$ 15 or $ 16 because they are so desperate.”

(Additional reports by Howard Schneider, David Branstrom, Maddy Nzanga, New York Johnel Marte, edited by Dan Burns and Dan Grebler)

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Why are more companies not filling their jobs when 8 million Americans are absent from work?

https://financialpost.com/pmn/business-pmn/with-8-mln-americans-out-of-work-why-are-more-companies-not-filling-jobs-2 Why are more companies not filling their jobs when 8 million Americans are absent from work?

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