Why pay raises alone won’t help fill America’s 11 million open jobs
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While millions of Americans are leaving their jobs and beginning new ones at an unprecedented rate, the number of job openings is at an all time high. Employers are struggling to find solutions for this talent crisis.
According to Labor Department statistics, approximately 6.7 million workers were employed in new positions in February. Job Openings and Labor Turnover SurveyThe biggest gains are in construction.
For the month of March, hiring outpaced 6.1million separations. This included an increased 4.4million people (or 2.9%) who quit their jobs involuntarily. The month saw an increase in the number of quits across all three sectors: retail, durable goods production and public education.
99 million people have stopped looking for work.
Ron Hetrick is a senior economist at Emsi Burning Glass. Hetrick says that although the rate of quitting is increasing, it isn’t bringing back people who were displaced during Covid back into the workforce. CNBC Make It is told by Hetrick that this level of churn can be described as “recycling existing workers back to forth, without recruiting new employees.”
There were 11.3 million jobs available in the U.S. labor force in February. These increases are mainly in entertainment, education, and government. There are many job opportunities for people, and so we will have an imperfect labor market. Hetrick states that you won’t always find the right people to fill vacant positions.
During this time, 56 people were unemployed for each 100 jobs.
Despite this, average unemployment rate is ticking down, the number of people not actively looking for work remains high — nearly 99 million people according to the Census Household Pulse SurveyFrom March 2 through 14. About 42.4 million of those who were part of this share retired. In comparison, roughly one third of Americans, 37 million, weren’t employed in the Census Bureau’s initial week, April 23-May 5, 2020.
Following retirees in number, 18.8 million people reported they were not seeking work. Another 7 million did not report any reasons. Other reasons people claimed they could not work were: sick, disabled or responsible for providing care; caring for someone who is sick; concerned about Covid hazards; and being responsible for taking care of another person.
It’s not about pay — yet
Hetrick states that employers are looking for ways to get to these millions of Americans.
For companies raising wagesHetrick is open to flexible benefits and doesn’t believe that money should be the only reason for people not joining the workforce.
Hetrick said that he doesn’t consider this to be about salary. Hetrick says, “It is about, is this job going be a fit for the circumstances of mine?’
Hetrick says that workers who have caregiving responsibilities may not believe their employer will accommodate them. “If there are people out there who think, ‘I don’t see how work can fit into what’s going on in my life right now,’ and if employers are willing to work with them to make it fit — that’s the disconnect we have to fix.”
According to him, companies must do their best to find ways to accommodate people who are not part of the workforce to improve job opportunities. “Employers wish this problem would go away”
There are more people who could return to work due to financial need. The Census Household Pulse Survey found that many people are not looking for work and simply pay their bills using credit cards or savings. Inflation could reduce these resources, and force people to look for new employment.
Worse, a weak job market can make it more difficult to get a job.
Rucha vankudre (senior economist, Emsi Burning Glass) says that she anticipates the tight labor market, with its record-breaking churn rate and job openings, to persist unless employers make drastic decisions to decrease their workforce.
Hetrick believes that there could be burnout among those who are able to stay in the job after the Great Resignation. If you ask workers to do a little bit more to make it easier for us to staff up, you are now about five to six months in the process.
Productivity has remained highHe adds that even industries with supply chain problems and shortages of labor like manufacturing can still be affected. Hetrick states that those leaders should worry about their workforce’s resilience. [business]Gains or risk of burning out people?
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