American Labor Shortages Explained

Posted by Alexis & Joanne on Sep 03, 2021

The pandemic gave the world economy a run for its money. Now that we're slowly getting over the shock of Covid-19, there's a new and unexpected phenomenon occurring in the U.S – a labor shortage. With 99% of our manufacturers being here in the United States, the current US labor shortage has hindered our ability to provide the 5-star customer service for which we’re known.

Our concern for the customer experience led us to do some research on the matter, and what we found was peculiarly interesting. Millions of Americans across the country are still unemployed. If this is true, how can there be millions of job openings with no workers to fill them? Here are the five causes which we’ve identified as the culprits.

1.Hesitancy to go back to work

The pandemic has shifted the mindset of many people. In a survey conducted by a Pew Research Center, 66% of people interviewed were reconsidering their field of work. This reassessment is happening at different levels and in different ways. For example, the war against Covid has been fought by the mantra of social distancing. At the most basic level, most people express a hesitancy to return to 'normal' working conditions where they would be in contact with other people. This sentiment is seen most from those who used to work in retail, grocery shops, the foodservice industry, and those in manufacturing.

All this means is that many industries have become less desirable employment options amidst the pandemic, with uncertainty about whether there will be an improvement once total normalcy returns. Companies are losing workers at a faster rate than they can replenish them.

2.Government support

Many industries and companies failing to fill job vacancies are struggling because of the current federal unemployment benefits. These benefits have been giving people that are out of work $300 per week under the CARES act. Compared to pre-pandemic low-income wages, this may be more than some workers received after hard labor hours.

While the program is ironically due to end this Labor Day, some states ended it early. This may come as a relief to some businesses. Research from the Bank of America found that these benefits did indeed keep people from looking for work, especially if they were making less than $32,000 per year before the pandemic.

3.Child-care is keeping many parents at home

Many parents are struggling to re-enter the workforce after leaving their jobs because of child-care demands. With schools opening and closing depending on Covid outbreaks, it's been challenging for parents, especially single parents, to find flexible enough jobs to give them leeway.

Many are opting to stay at home until they can ensure safe and stable child-care or schooling for their children. Some are looking for work-from-home jobs to accommodate this decision. While it’s important for parents to be able to make choices that best suit their families, the absence of these parents from the labor force has been affecting industries that only offer on-site jobs.

4.The jobs are where the workers aren't

The pandemic resulted in a migration of sorts. Many people moved back to their hometowns or out of urban areas as they lost their jobs or shifted to work from an at-home model.

The outflow of people moving to suburban or rural regions has left the metropolitan areas with unfillable job openings. In addition, with the unease and uncertainty that still permeates the economy, very few people are willing to risk moving back into urban areas. They are unsure whether another lockdown will be imposed, potentially affecting their employment again. Simply put, the jobs are where the workers aren't.

5.An expectation standstill

As mention previously, employee priorities have shifted during the pandemic. Unfortunately, many companies are not prepared for the higher environmental and compensation expectations that came with this shift.

Many employers and industries are still trying to grapple with the heavy economic losses they have suffered over the past year. The need for labor is great, but, there also needs to be a reassessment of wages and other factors that keep people at home.

Concluding Thoughts

The issues with the labor market have created a domino effect that is interfering with the entire economy. Even companies that are not lacking employees are now lacking in the materials provided to them by short-staffed companies. This has lead to some businesses being stuck perpetually trying to play catchup, as we learned from the Eder Flag Mfg. COO, Jodi Goglio.

Even though the economy is slowly bouncing back, it's no longer business as usual. It will take some time for both sides to figure out how to address the current stalemate plaguing the labor market.

The pandemic and the labor shortages that resulted have been a burden for many. However, when you’ve been in business as long as we have, you learn a thing or two. This is a temporary setback. We want to thank all of our understanding and loyal customers! Rest assured that our trusted manufacturers and Flags.com family members are working day & night to fill your orders!