Executive Summary and Key Findings
The most critical and widespread challenge facing businesses right now is the inability to hire the qualified workers they need. When businesses do not have enough employees, they are forced to turn down jobs, reduce hours, scale down their operations, and in the worst cases, permanently close. The latest data and surveys reveal a national economic crisis that is getting steadily worse.
- There were 8.1 million vacant job openings in the United States—a record high—in March 2021, the latest month for which data is available. That’s up more than 600,000 from February.
- There are approximately half as many available workers for every open job (1.4 available workers/opening) across the country as there have been on average over the past 20 years (2.8 historical average)—and the ratio continues to fall.
- In several states and several industries, including hard-hit sectors like education and health services as well as professional and business services, there are currently fewer available workers than the total number of jobs open.
- More than 90 percent of state and local chambers of commerce say worker shortages are holding back their economies, and more than 90 percent of industry association economists say employers in their sectors are struggling to find qualified workers for open jobs.
In April, the Bureau of Labor Statistics (BLS) jobs report fell well below expectations. Businesses only created 266,000 jobs when most analysts expected more than 1 million. Even with 9.7 million unemployed at the beginning of April, workers’ reluctance to return to work and fill open positions was one reason for the lackluster job creation. Another could be that employees know just how easy it is to get a new job – the percent voluntarily leaving their current job is now above pre-pandemic levels.
BLS also reported that there were 8.1 million job openings in the economy as of the end of March — an all-time high. That is more than 600,000 higher than at the end of February and the fastest growth rate since July 2020. So far, in 2021, employers have added 1.4 million. Clearly, businesses are hiring – if only there were workers ready, able, and willing to fill their open positions.
The Worker Availability Ratio measures the number of available workers divided by job openings. More specifically, it compares (1) “available Workers” (persons who want a job and are available to work now) as reported in the monthly BLS Employment Situation Report household survey of individuals to (2) employers’ job openings as reported in the BLS Job Openings and Labor Turnover Survey (JOLTS).
The national Worker Availability Ratio and has fallen precipitously in recent months. There are now approximately half as many available workers (1.4) for every open job across the country as there have been on average over the past 20 years (2.8 historical average).
In several industries, including hard-hit sectors like education and health services as well as professional and business services—there are currently fewer job seekers than the total number of jobs open. The circumstances are most challenging for employers in South Dakota, Nebraska, and Vermont, where the total jobs available outnumber the total available workers to fill them.
Ninety percent reported “lack of available workers” as the main factor slowing the economy in their area—with two-thirds reporting it was “very difficult” for employers in their community or state to hire workers. Respondents were twice as likely to say that lack of workers is holding back the economy as they are to say that COVID is holding it back. Less than 1% said it was easy to fill open jobs. While the pandemic has certainly impacted the labor market, the lack of workers to fill open jobs isn’t a new problem. In late 2019, there were more open jobs than unemployed individuals. Keeping our economy growing requires that we fill these jobs. To do so, we need to remove barriers that prevent people from entering the workforce, get individuals the skills they need for the open positions, and enact sensible immigration policy.