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Our nation’s worker shortage crisis continues. There were more than 10.4 million job openings in the economy at the end of August, the Bureau of Labor Statistics (BLS) reports, a slight decrease from July’s record high 10.9 million openings.
Although the steady increase in job openings we have seen this year slowed in August, there are still more than 2 million more job openings than there are unemployed workers in the economy. In total, businesses have added almost 3.7 million job openings in 2021. Yet, BLS’s recent employment data was disappointing, as only 194,000 workers that could fill those open jobs were added in September.
Job openings continue to be severely elevated above historical norms because job takers are simply not keeping up with openings. The quit rate was 2.9 in August, which is the highest it has ever been. Workers know that jobs are plentiful and that they can secure another job easily if they leave their current position.
The U.S. Chamber’s Worker Shortage Index compares the number of available workers (unemployed plus those marginally attached to the labor force) to the number of job openings. When the Index is above 1, there are more workers than job openings. When it’s below 1, the opposite is true.
In August the Index was 0.9, meaning there were more job openings than available workers. This is a record low and only the fourth time since 2000 the Index has slipped below 1. It was 0.9 in July as well; both months are well below April 2020 when it was 5.5.
Prior to COVID-19, the Index was similarly low. It dipped below 1 in August and October of 2019. It was 1.0 in February 2020. But the circumstances in the labor market were remarkably different back then. There were about 7 million openings and available workers then. Today there are much more of each – 10.4 million openings and more than 9.4 million workers available.
Before the pandemic 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, which is that available workers are hesitant to take the overwhelming abundance of available jobs.
The biggest problem our economy faces right now is getting workers to fill the historically large amount of open jobs. Workers are staying on the sidelines because of too-generous government benefits (now mostly expired), fears about the virus, lack of childcare, and other factors. The enormous number of job opening is holding the economy back from reaching its potential and is threatening what should be a prolonged economic boom. Congress and the Biden Administration should be focusing on getting people off the sidelines and back to work.
The U.S. Chamber launched the America Works initiative to present a policy recommendations, solutions for employers, and the latest economic research to help address the worker shortage crisis. We will continue that effort until businesses can hire the workers they need to meet their customers’ needs.