If you've gone out at all this summer, you've probably noticed a lot of "help wanted" signs hanging in windows. Companies, particularly in the service and retail sectors, have been struggling to hire workers — especially since the spring, when Covid vaccines became widely available and pandemic restrictions began easing.
The competition for workers is so intense that even retail giants like Walmart and Target have upped their hiring incentives in recent days, offering everything from cash bonuses to retain current employees to college tuition reimbursement to draw in new hires.
Retail has been one of the sectors with the most job openings, jumping more than 75% since June 2020, according to the Bureau of Labor Statistics. But it isn't alone. There continue to be a lot of vacancies in other service sectors, including hospitality and health care.
In all, the U.S. had more than 10 million job openings in June, according to the BLS, the most ever recorded. Retail, health care, and hospitality collectively made up more than 40% of those vacancies, but jobs increased in nearly every big sector that the BLS tracks.
Yet despite the uptick in job openings and the incentives companies are offering, 8.7 million people were still unemployed in July — meaning there were 1.3 million more jobs than people looking for them.
Some of that gap is to be expected, says Mark Hamrick, senior analyst at Bankrate. "There's always been an issue of the misalignment of supply and demand of workers," Hamrick says, "and it's just that this experience has significantly exacerbated that."
The pandemic labor market shifts — the sudden loss of so many jobs in spring 2020 and their subsequent rebound a year later — happened fast. Many of the unemployed, meaning those without a paid job but available to work, haven't felt ready to move as quickly as the job market has and are rethinking their options, Hamrick says.
Some of the misalignment is structural. The pandemic pushed about 1.7 million workers into early retirement, according to the New School. Another set of people, mostly women, left the labor force to care for children or other loved ones, and they can't come back until child-care issues get resolved, Hamrick says.
When highly skilled workers dip out of the labor force, it can create hiccups in the broader economy pretty quickly. Many pilots who were furloughed toward the beginning of the pandemic, for example, needed to be recertified before they could begin flying again. When travel demand surged this past spring, some airlines had to cancel flights because they didn't have enough licensed staff to be in the air.
Video by Helen Zhao
Something similar happened last year in long-haul trucking: When demand for gasoline plummeted in 2020, many truckers who haul petroleum retired. Big rig drivers who deliver petroleum need special training and certification in addition to their Class A licenses, so when demand for gas spiked earlier this year, there simply weren't enough drivers to get the refined petroleum to gas stations. That, along with the Colonial Pipeline cyber hack, created a huge shortage of gasoline and elevated prices that still haven't fully come down.
Those workers are tough to replace when schools are shut down for in-person instruction, Hamrick says. "Think about the impacts on trade schools and community colleges, some of which would have resulted in hands-on learning," he says. That "lack of in-class learning basically took some people out of the pipeline who would have been natural candidates for employment almost immediately."
The other structural issue is the "highly mobile" people who work in the lower-wage service sector, which currently has the largest number of unfilled jobs, Hamrick says.
"You've got people who are young. You've got people who may or may not be in love with the kind of work they have to do because of the demanding nature of it," Hamrick says. "They're also on the front lines with the public during a difficult time, and some are now being asked to be vaccine police, which is something they didn't necessarily sign up for."
The quit rate for hospitality and food services, the percentage of workers voluntarily leaving those jobs, is at a historic high of 5.7%, according to the BLS. So whether the issue is that people are simply not going back to their old jobs or deciding it's their time to bounce from their current gig, there's strong evidence that a big shift is happening in the labor market.
Video by Helen Zhao
Whether they're considering options like going back to school, learning new skills, or simply trying a new career field, workers who've avoided going back have been aided by expanded unemployment benefits rolled out by the CARES Act in March 2020 and extended by the American Rescue Plan enacted earlier this year.
Those federal programs expanded state unemployment benefits in three major ways: They extended the amount of time people could receive benefits, they added a federal boost to the amounts recipients got from the state, and they let people who would traditionally be barred from receiving unemployment insurance (like gig workers and the self employed) qualify for aid.
Those programs have lifted the pressure for service workers to return to their old jobs, but with expanded unemployment insurance set to expire in September, people who are unemployed may feel a new urgency to get back on the payroll, Hamrick says. Maybe. "It remains to be seen what happens with workforce participation," he says. "If anything, this situation of the mismatch is not going to be cleanly resolved soon, simply because the pandemic itself hasn't been resolved."
All that said, a new survey by PwC showed that some 65% of employees are currently looking for new jobs, nearly double the 35% of workers who said they were seeking new employment in May. As the pandemic drags into the fall and more employers extend their work-from-home policies, these prospective applicants can cross one worry off their checklists: Their ZIP codes may not be a factor in determining their qualification for a given job.
In addition to the structural challenges of matching jobs and workers, there's also the question of geography. It's particularly acute right now not only because so many people moved during the pandemic, but also because lots of jobs are being listed in rural states that don't have a lot of people in them, according to recent data from ZipRecruiter.
West Virginia was the state with the biggest increase in job postings between February 2020 and June 2021, according to ZipRecruiter, increasing more than 130% in almost 18 months. Six other states, Alabama, Arkansas, Kentucky, Mississippi, North Dakota, and South Dakota, and the District of Columbia saw job postings more than double during the time period that ZipRecruiter analyzed.
Almost all the states on the list experienced some level of population decline, according to the initial results of the 2020 Census.
Video by Courtney Stith
Remote work may be able to ease some of these geographic misalignments. A recent ZipRecruiter survey found that more than half, 55%, of people prefer to work remotely right now, and nearly half, 45%, want to keep working remotely once the pandemic ends.
That likely won't be a problem, Brie Reynolds, career development manager at FlexJobs, recently told Grow, since the pandemic has cemented the viability of working from home for a broad section of the population.
"I think hybrid seems to be here to stay," Reynolds said. Some 60% of jobs are predicted to have some kind of hybrid work schedule even after the pandemic, she says.
More from Grow: