This post appears here courtesy of the John Locke Foundation
. The author of this post is Paige Terryberry
Businesses are on the mend from government-induced Covid shutdowns.
But even while most industries are adding jobs, we have a labor shortage.
According to the March Job Openings and Labor Turnover Survey (JOLTS) release from the Bureau of Labor Statistics (BLS), the number of job openings for the country reached the highest level since the series began in December of 2000. Wednesday's release, with April data, showed a slight downward revision in job openings.
Hiring still outpaces quits in every major sector, driving down unemployment, yet many jobs are still open. There are nearly two job openings for every job seeker nationally.
The South, as categorized by BLS and including North Carolina, has been hit hardest, along with the Midwest. Since December, the average rate of job openings in the South and Midwest was 7.3%, compared with 6.7% in the Northeast and 7.0% in the West. The job opening rate measures the percent of job openings as a share of employment plus job openings in an industry or region.
The job opening rate for North Carolina was most recently reported as 7.9%, or 406,000 job openings, ranking below even the Southern average.
North Carolina has a tight labor market with high demand for workers, with 2.3 job openings for every job seeker.1
Nationally, the sectors most affected are accommodation and food services followed by leisure and hospitality. These sectors were hit hard by Covid lockdowns - and are now struggling on the back end of the pandemic to hire workers.
A McDonalds franchise in Florida offered candidates $50 just to show up to interview. Jimmy Johns began offering sign-on bonuses and Chipotle even promised to expand its free college tuition program, according to The Wall Street Journal.
This has certainly not always been the case for the industry. According to the National Restaurant Association, the two decades before the pandemic saw "the number of hires exceeded unfilled job openings by an average of 230,000 each month."
Referencing the JOLTS data, the Association claims, "the industry's current labor shortage is far and away the most severe on record."
There are a host of reasons that experts and media outlets are attributing to the shortage: poor working conditions, demographic pressures including early retirement, immigration levels, childcare shortages, job misalignment, mandated Covid vaccines, reduced work incentives from government stimulus, and even a change in workers tastes and preferences.
As the economy mends and adjusts from the Covid pandemic, industries will experience different growing pains.
Overall the economy is clearly on the mend, but this recovery may be short-lived. As inflation roars and a recession looms, workers may not continue to be in high demand for long.