By Noah Rothstein
More than nine million Americans said in May that they wanted jobs and couldn’t find them. Companies said they had more than nine million jobs open that weren’t filled, a record high.
However, as the economy opens, getting those jobs filled hasn’t been an easy task.
The process of matching laid-off workers to jobs is proving to be slow and complicated. The disconnect helps explain why so many companies are complaining about trouble filling open positions early in a recovery. It also explains why wages are rising briskly, even when the unemployment rate is well above the pre-pandemic rate of 3.5%. The relatively high jobless rate suggests an excess of labor supply that, in theory, should hold wages down.
Sand in the wheels of the labor market could cause inflation pressures that spur Federal Reserve policymakers to pull back on low-interest-rate policies meant to support growth. The slow matching process could have benefits in the longer run, leaving workers jobs they prefer and the economy more efficient.
The food services industry, one of the most upended sectors during the pandemic, has remained in a state of flux. Quits as a percent of total separations in the accommodation and food services industry hit a record high of 80% in May. This number is about five percentage points higher than the ratio that prevailed for much of the pre-pandemic economy.
Initiatives from national chains to entice new hires, or retain existing talent, show how acute the pressure remains on restaurants to keep enough staff on hand to operate at something resembling full capacity. Staffing levels, however, are still holding many outposts back, and employers are quick to complain, though raising wages seems to do the trick.
The big takeaway from this industry-level data is that competition has never been stiffer for staffing up a restaurant. The longer these pressures remain, the more likely any changes made to navigate this turbulent period will stick around.
Overall employment remains about 7 million jobs below February 2020 levels, but things have never been more competitive if you’re in the food industry.
A recent ZipRecruiter survey found 70% of job seekers who last worked in the leisure and hospitality industry say they are now looking for work in a different industry. In addition, 55% of job applicants want remote jobs. An April survey of U.S. workers who lost jobs in the pandemic, conducted by the Federal Reserve Bank of Dallas, found that 30.9% did not want to return to their old jobs, up from 19.8% last July.
“Policymakers should be cognizant of a range of supply factors that may currently be weighing on employment,” Dallas Fed President Robert Kaplan said in a research report. “These factors may not be particularly susceptible to monetary policy.”
Fed Chair Jerome Powell maintains that these disruptions are temporary, and low-interest rates remain warranted.
The reality is that unemployment and job openings have been elevated for months. Mismatch in the labor market is upending the usual relationship between unemployment and job openings. Normally, as unemployment rises, job openings fall because employers have an abundance of workers from which to choose. Falling unemployment, on the other hand, is associated with many openings.
Another form of mismatch is geographic. Job openings and available workers are in different places as people moved during the pandemic and business boomed in unexpected locales.
Forage Bistro and Lounge, a Driggs, Idaho restaurant serving up crab fritters, farmers market lasagna, and beef tenderloin, can’t keep up with demand, said Lisa Hanley, the restaurant’s co-owner. The bistro needs to add several employees to its staff of 17. Workers are not around to fill open roles because the small town doesn’t have the housing capacity.
“There’s all these places for people to vacation here, but there’s not the core community of people living here because they can’t find a place to live,” she said.
Business skill requirements are shifting as the economy opens and firms hunt for talent.
Employers are easing skills requirements for many low-skilled jobs to find workers in a tight labor market, according to an analysis of job postings by labor-market analytics company Emsi Burning Glass. For instance, the share of hotel-desk clerk job postings requiring “guest-services” skills has dropped sharply since 2019.
At the same time, companies are ramping up requirements to fill high-skilled jobs. The share of aerospace-engineer job postings requiring knowledge of programming language Python and advanced software skills has increased at a rapid pace compared with two years ago, according to Emsi Burning Glass.
Prospective workers could be forced to move more aggressively in the months ahead as jobless benefits expire. Because all states are slated to end supplemental benefits by early September, the next few months will be critical in shaping how aggressively people look for jobs.
