Labor shortage still going strong, where are all the employees?
Jan 15, 2024, 2:02 PM
(AP Photo/Nam Y. Huh)
SALT LAKE CITY — Does it feel like everywhere you go, there aren’t enough employees? There aren’t enough nurses at the hospital, enough servers at the restaurant or enough checkers at the grocery store.
Many industries are struggling with a labor shortage right now, especially in healthcare, hospitality and construction. But the shortage isn’t caused by a lack of desire to work or any other sentiment.
“This is caused by a real demographic shift in birth rates overall,” Jeanfreau explained. “We have fewer people coming into the market and a large generation leaving. That leads to a deficit of workers.”
More Utahns working now than before pandemic
“For a while, there has been the sentiment that people just don’t want to work like they used to,” Jeanfreau said. “That was true when Covid was impacting the labor force. As we’ve returned to labor participation rates higher than before, it’s difficult to argue that people aren’t interested in working.”
In 2019, millennials became the largest generation in the labor force. By 2030, they’ll make up 75% of the workforce.
“When Covid happened, an unusually high number of baby boomers decided not to come back into the market,” Jeanfreau added.
What feels like chronic employee shortages is actually the result of the demographic shift that happened a long time ago.
“This is the end result of a declining population rate that began in the 1970’s,” Jeanfreau explained. “Family planning was introduced to the market and people were able to not have kids if they didn’t want to. Now, years later, people born in that time period should be entering the job market, and they are, just not as many as the economy is used to.”
It’s a mismatch of an older population and not enough workers coming in behind them.
“When somebody retires, they continue to consume, but their productivity drops off,” Jeanfreau said. “That imbalance grows over time as our average age rises.
Job openings down
“That comes from the JOLT – the Job Opening and Labor Turnover survey,” Jeanfreau explained. “What they keep track of is four different things: people getting hired, people getting fired, people quitting and job openings. This data is where the whole story of the great resignation came out. We saw an elevated quit rate. In Utah, a lot of that was job switching.”
Unemployment in the United States has been under 4% for almost two years.
“In Utah, we’ve had really elevated job openings per unemployed person for a few years now.”
As job openings decreased slightly in December, some people worry that opportunities are decreasing. Jeanfreau says this should not be a concern, especially in Utah.
“The imbalance of openings to workers is already so egregious that we have more job openings than unemployed people still.”
There is the idea that as childcare costs go up, it can be prohibitive for people trying to get into the labor market.
“The focus here is if we want to increase productivity, can we look at underrepresented groups? As the labor force gets tighter, companies are more inclined to work around problems. If you’re really struggling to find someone to balance your books, there are accountants who can work from home, and be a stay-at-home mom and be an accountant,” Jeanfreau said.
Employees’ bargaining power is still fairly high, especially here in Utah.
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