The article in the url below, from a couple of years ago, discusses the ongoing labor shortage in the U.S. (a challenge faced by multiple economies around the world):
"More than a year and a half into the pandemic, the U.S. is still missing around 4.3 million workers. That's how much bigger the labor force would be if the participation rate—the share of the population 16 or older either working or looking for work—returned to its February 2020 level of 63.3%. In September, it stood at 61.6%."
Clearly, the pandemic had a lot to do with this, with a large percentage of these "missing" workers retiring early, but the situation has not eased much since the lockdown was relaxed. For many, during the pandemic, working was no longer worth the tradeoff:
"The participation rate experienced its biggest drop since at least World War II in the early months of the pandemic. It partly rebounded last summer and since then has hovered near the lowest level since the 1970s, despite sturdy economic growth and the strongest wage gains in years."
While the market is currently adapting to the new reality (increasing pay and other conditions for employees, which is adding pressure in the current inflationary environment), the real story is whether this situation will ever recover:
"Some economists are concerned that worsening worker shortages reflect longer-term shifts, such as the pandemic-driven acceleration of retirements, that won't reverse. Many expect the labor shortage to last at least several more years, and some say it's permanent. Of 52 economists surveyed by The Wall Street Journal, 22 predicted that participation would never return to its pre-pandemic level."
If not, as many economists suspect, then it forces employers to focus more intently on being a good employer. If they do not value their employees as their most important stakeholder, they will increasingly lose out in the competition for the best employees in the market. And, this is not just an issue of higher compensation, but providing opportunities for more meaningful work. Whether the overall effect continues to be inflationary, depends on whether productivity rates respond in line with better conditions.
Take care
David
David Chandler
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4.3 Million Workers Are Missing. Where Did They Go?
By Josh Mitchell, Lauren Weber, Sarah Chaney Cambon
October 14, 2021
The Wall Street Journal
