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'We're hiring': US faces unemployment, no one wants to work

  • By Al Mayadeen English
  • Source: Agencies
  • 14 Aug 2022 10:58
  • 1 Shares
4 Min Read

Ads are snowballing across the United States calling to hire workers, as companies struggle with a worker shortage caused by a series of events.

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  • Protesters in New Jersey for unemployment (Getty Images)
    Protesters in New Jersey over unemployment

According to government data, more than 10 million openings went unfilled in June in the US, with retail, postal services, and hospitality suffering the most, while fewer than six million people were unemployed, even as employers desperately try to accelerate hiring during a rush of consumer spending.

Baby boomers' time to leave with no replacements  

The US Chamber of Commerce, which represents American firms, said in a statement that although there is an abundance of jobs, there aren't enough workers to fill these vacancies. It calculated that there would be a surplus of workers, approximately 3.4 million more workers if labor force participation (the percentage of the working-age population currently employed or actively seeking work) was at the pre-pandemic rate.

It went from 63.4% down to 62.1%, and many of those who stopped working when Covid-19 first hit the US in March 2020 never returned to the workforce - with many deciding on early retirement. 

Concerned for their health and with sufficient pre-existing assets due to a then-resilient stock market and high real-estate prices, millions of people opted for early retirement from the workplace, amid the huge rush of "baby boomers" (those born after the Second world war) leaving the workplace. Nick Bunker, a labor-market specialist with jobs website Indeed, stated, "We're unlikely to get back to exactly the pre-pandemic level of labor-force participation because of the aging of the population."

Adding to this, Diane Swonk, chief economist at KPMG (one of the fastest growing accounting firms in the US), highlighted that immigration flows would have helped replace the baby boomers leaving the workplace, but that wasn't a possibility as a result of immigration restrictions. 

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Alongside the impact of Covid-19, restrictions enforced under then-president Donald Trump steeply reduced the number of foreigners entering the country. "It has rebounded a little bit, but still not at the levels we were seeing several years ago," Bunker added.

The Economic Impact Payments, also known as stimulus checks, were issued by the government to the American people for the pandemic relief but the Chamber of Commerce held the government aid responsible for encouraging people to postpone applying to jobs and thus staying out of work with money in their pockets. 

Women at the forefront

The impact of unemployment affected women significantly as a critical number of women quit their jobs in 2020 partially because extended school closings required them to care for their children, and day care, unfortunately, wasn't an alternative since labor shortages hit the day care sector as well.

Women and girls faced higher threats in the pandemic, from domestic abuse, inequalities, and mental health challenges due to the mounting pressure they were subjected to. 

Swonk noted that the rate of Covid infections wasn't the only devastating impact on the economy, but the draining effects of the length of the pandemic had a serious impact as well, commenting that "really one of the most underestimated and misunderstood issues" keeping workers marginalized. 

To bring workers back to the force, many employers have increased wages, pay, and benefits, but analysts suggest if Americans' spending frenzy slows down, companies will need fewer workers.

The "Great Resignation" of 2022

The labor crisis is anticipated to ease slightly as the Federal Reserve continues to aggressively raise interest rates in its attempt to combat inflation. 

Over the past year, millions have changed jobs to ones offering higher wages and better working conditions, and other wage earners have profited. 

The "Great Resignation" has produced higher hourly wages, with the private sector average being $32.27, up 5.2 percent in a year, and adding to inflation pressures. Gas prices, baby formula shortages, and rising prices have increasingly become household concerns in the US.

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