Where is everyone working at?
In: 6379
What is the contradiction?
Low unemployment means almost everyone motivated to look for jobs have jobs, which means there’s going to be a shortage of applicants for open jobs.
Those mean the same thing… unemployment rate being low means that there aren’t people to hire, thus a shortage of labor looking for jobs.
So where are all the needed workers?
COVID has killed over 1m people… assuming even 1/3 of those were working prior to dying, that’s 300k workers no longer available to hire.
In addition, there are millions more who are suffering debilitating long COVID effects that prevent them from working or working full time.
And then there are those who are immunocompromised, who have left the workforce for fear of their health.
There may also be people who now lack childcare, either because daycares have had to cut number of kids due to COVID safety levels, due to staff shortages, or parents have lost access to family member caregivers (grandparents who died of COVID or have long COVID, differences in opinions over vaccinations).
Then there are all the people who moved into new job categories when COVID hit and have stayed… those who got laid off from restaurants or movie theaters, etc. and took jobs in warehouses, as delivery drivers. Those jobs may be better, pay better, and so there was no desire to go back to old jobs.
And another factor is how labor shortages have boosted pay. If somebody who used to make $12/hr at two part time fast food jobs is now making $18/hr and can get as many hours as they want at just one of those jobs, they no longer need to deal with the hassle of having two jobs and quit one.
Unemployment is measured as % of people *looking for work* that can’t find a job. It doesn’t coutn those who can’t work (kids, disabled) or don’t want to work for a wage-job (homemakers, retired, etc.).
So, right now, pretty much everyone who’s looking for a job has one (low unemployment). However, thanks to COVID, inflation, and businesses being slow to react a lot of people have basically said, “I’m not working for these crap wages” so they’re not trying to get work…this is the “nobody wants to work crowd” on the employer side…yes, people don’t want to work *for what the employers are currently willing to pay*. So they decry “labor shortage”…employers can’t hire as many people as they want to (because they won’t pay what are the new, now, higher market rates for labor).
The key here is, they aren’t. There are more people who have exited the workplace site to early retirement or just deciding not to work. So unemployment is low, as those who want to work can find jobs. And at the same time, companies, mostly smaller ones at that, are having a hard time hiring the necessary staff.
Because “low unemployment” and “labor shortage” mean the same thing. They both mean “not enough people looking for work to fill all the positions.” If you run a “news network” and you want the incumbent to look good, you say “low unemployment” and if you want to scare the ownership class you say “labor shortage.” Two slightly different ways of looking at the same thing.
There is no labor shortage. It a shortage of people not willing to be exploited anymore.
If I go to every car dealership and say, “There are no cars available.” But the reason is I’m offering $5,000 for a new car. Is that really a car shortage? Or is it a dealership not willing to sell cars?
Obviously not. Collectively, workers are no longer putting up with low and unfair wages.
If employers offer $30+/hour, they will have a line of people trying to get the job.
Edit:spelling.
There are several effects that can cause this.
First – the number of job slots is not fixed.
Imagine there’s 100,000 people looking for work, 100,000 jobs, and 98,000 of the possible workers have jobs. You’ve got 2% unemployment (2k out of 100k). This would not really be considered a “shortage”; a small amount of unemployment and open positions is normal as people shift jobs over time, etc.
Now imagine there’s 20,000 more job positions opened, but the population is unchanged. Now you have the same 2% unemployment but a major “labor shortage” – one in six jobs is unfilled.
Second – the population can decline. As others have mentioned, the “people looking for work” is not the same as number of total “people”. For example, instead of 100k possible workers you now have 95k possible workers.
Third – shortage doesn’t necessarily mean that “there’s no X”, it’s also used fairly frequently to mean “X is more expensive”. In the above example, with the same 100k people, the same 100k jobs, and the same 98k people working in jobs – if the workers are now demanding a higher rate to work, the employers are likely to describe that as a “labor shortage”.
Fourth – shortages are not necessarily “global”. Let’s say the country has two industries, steel and food. Same original stats – 100k possible workers, 100k positions, 2% unemployment – so 2k unemployed workers and 2k open jobs. In an “evenly distributed” case, the 2k open jobs would be 1k each between steel and food, and the unemployed workers would have their skills and interests evenly split between those. But what if all 2k open jobs are in the food industry, and all of the unemployed workers have steel-making skills and interest? Now the food industry is unable to get new hires at all while the steel industry has extra.
In the practical world, a combination of factors is usually at play, and all of the above can be found to various extents.
Labor has been undervalued for a long time, and there are companies that refuse to adjust to the correction happening. They’re the ones currently struggling to find employees for what they’re used to paying. These are the companies spewing “nO oNe WaNtS tO wOrK aNyMoRe.”
My local McDonald’s is paying $18 starting, and that’s the local market rate for an EMT. One has irregular hours, high stakes, and requires certifications. Guess which one is experiencing a critical, nationwide shortage?
Labor force participation is at 62.3%, which is where it was in Aug 1977. Pre Covid we were at 63.4%. Labor force is considered everyone age 16+.
Notice that when it was over 67% we didn’t have the super low unemployment rate we have now. A big part of this would be the number of Boomers who were working then and are now retired.
[https://fred.stlouisfed.org/series/CIVPART](https://fred.stlouisfed.org/series/CIVPART)
Then we have the U-6 unemployment rate (U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force) at a non seasonally adjusted rate of 6.4%, down from the 8.1% it was a year ago.
The normal rate everyone hears about is the U-3 (U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate))
[https://www.bls.gov/news.release/empsit.t15.htm](https://www.bls.gov/news.release/empsit.t15.htm)
And here is the U-6, U-5, and U-3 going back to Jan 1994
[https://www.macrotrends.net/1377/u6-unemployment-rate](https://www.macrotrends.net/1377/u6-unemployment-rate)
Boomers are retiring and leaving the workforce. They were the largest population and were at the top of their earning levels. They were going to retire this decade and Covid restrictions made some just leave the workforce.
We just don’t have as many people available to work anymore.
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