The worker shortage crisis has kicked into another gear. The Bureau of Labor Statistics (BLS) reported last week there were 10.1 million job openings in the economy at the end of June. This is by far the record amount of job openings the economy has ever had. This historically elevated level makes clear that we have a severe worker shortage that threatens what should be a prolonged economic boom.
The 10.1 million job openings is 590,000 more than in May, which was then an all-time record. The growth of openings is picking up. Businesses have created 3.3 million openings since the beginning of 2021. Openings continue to grow because job takers are simply not keeping up with openings. The quit rate was 2.7 in June, which is also historically elevated. Workers know that jobs are plentiful and that they can secure another job easily if they leave theirs.
While job openings have been rising, the number of unemployed workers is dropping. In June there were 9.5 million unemployed workers, well down from the peak in April 2020 when there were more than 23 million out of work. There are now 589,000 more job openings than there are unemployed workers.
The Worker Shortage Index compares the number of available workers, defined as the unemployed plus those marginally attached to the labor force, to the number of job openings. In June the Index was 1.1. This is lower than May, when it was 1.2, and lower than recent months. It is well down from April 2020, when it was 5.5.
Prior to COVID, the Index was similarly low. It was 1.0 in February 2020. But the circumstances in the labor market were remarkably different. There were about 7 million openings and available workers then. Today there are much more of each — 10.1 million openings and 11.3 million workers available. Prior to COVID, the Index was going to be hard to lower much further because of skills and location mismatches between jobs and workers. Those issues still exist, but they are not the abiding problem right now.
The biggest problem is getting workers to fill the historically large number of open jobs. Workers are staying on the sidelines because of too-generous government benefits, fears about the virus, lack of child care and other factors. This is the top issue in the economy right now. The enormous number of job openings is holding the economy back from reaching its potential. Congress and the Biden administration should be focusing on getting people off the sidelines and back to work.
For employers struggling to fill jobs, America Works is a nationwide activation of business and government to swiftly address America’s deepening worker shortage crisis. The U.S. Chamber of Commerce and U.S. Chamber of Commerce Foundation have programs for your HR department to fill open jobs, the latest research on the economic impact of the workforce crisis, and policy recommendations urging elected officials to take action, at uschamber.com/work. •
