These industries are characterized by common factors like hard physical labor, a history of low pay and dramatic recent increases in work load (lumber, pandemic pets, pandemic stress) and/or restrictions on immigration. Solutions include pay increases, relaxation of immigration laws and better work life/benefit packages. JL
Andrew Van Dam reports in the Washington Post:.
Although the job market is heating up, there’s not a broad national worker shortage. In the current job market, employers in many sectors are raising wages and seeing immediate response from applicants. “The pandemic rocked labor markets in several ways. It broke many linkages between workers and their pre-pandemic employers, and it introduced a factors that make it less attractive for people to be in the jobs that they previously held.” There are still millions of eager, eligible potential employees in the US, but due to health risks, child care and elder care “it may not make sense for a large number of people to be back at work unless they receive higher wages than they received prior to the pandemic.”The United States saw a record 9.3 million job openings in April, according to a Tuesday release from the Bureau of Labor Statistics. Coincidentally, 9.3 million Americans were unemployed as of May, a separate BLS release showed. The ratio of about one job opening for every unemployed worker is only slightly higher than the United States saw in the super-tight labor market of 2019.
In another sign of increased leverage, Americans are quitting their jobs at record rates as employers poach workers with raises, bonuses and perks. The payroll processor Gusto found that service-sector employers gave out as many bonuses in May as they do in a typical December. This level of one-time payouts is unheard of outside the year-end bonus cycle.
Although the job market is heating up, there’s not a broad national worker shortage, said Nick Bunker, an economist at the job site Indeed who has long followed federal job-openings data.
“When you have a shortage in the market, you’re doing your best to get supply by paying more for it, but nothing’s happening,” Bunker said. In the current job market, though, employers in many sectors are raising wages and seeing immediate response from applicants.
A true worker shortage would mean that businesses see little response despite an aggressive search for workers. In industries such as hotels and restaurants, a deluge of job openings may make it seem like a shortage (and there are shortages in some parts of the country), but employers are hiring so fast that they’re actually getting more than one employee per job opening, better than their yield before the pandemic.
Compare restaurant and hotel openings to a sector such as manufacturing of nondurable goods — things that don’t last — such as pants and pancake mix. Before the novel coronavirus hit, those manufacturers sometimes drew a new worker for every job opening posted, similar to what restaurants are seeing now, meaning their labor market was tight but there was no shortage. As of April, the same companies were able to hire only one worker for every two job openings, according to the Bureau of Labor Statistics, a strong sign that workers are in short supply.
To find niche industries where workers are truly in short supply, The Washington Post analyzed federal wage and employment data for hundreds of narrow industries within some of the tightest sectors and found those where employers paid higher wages but didn’t attract new workers. In the seven sectors discussed below, many of which are seeing record paychecks for nonmanagerial employees, the stories explain why the labor market has heated up so fast and what’s holding it back.
Sawmills
Sawmills emerged as one of the post-pandemic economy’s most ballyhooed bottlenecks. They’re the biggest obstacle between the nation’s relatively plentiful raw timber and soaring demand from an ultrahot home building and remodel market.
To convert all that timber to boards, sawmills lack one key ingredient: workers. Employment at the mills only recently returned to its pre-pandemic level, despite weekly paychecks that have soared 10.4 percent since the pandemic began, to $942 in April.
Why aren’t they coming back? Henry Spelter, partner at Forest Economic Advisers, said sawmill workers aren’t exceptionally highly paid, and during the pandemic some may have preferred to stay home, avoid the virus, and collect stimulus checks and extended unemployment benefits. But in their absence, a perfect storm brewed in the lumber industry.
“Wood demand exploded and sent lumber prices and sawmill profit margins soaring,” Spelter said. “To take advantage of these rare and extraordinarily favorable markets, mills have had to pony up enough money to make it worthwhile for their people to return to the workplace.”
Mills are anxious to cash in on the high lumber prices, giving workers extra leverage. Much of the work in today’s sawmills is done by machine, but further automation doesn’t seem to be a threat in the short term because of how long it takes to acquire and install new equipment. Furthermore, firms are hesitant to invest in fancy new mills, the price tags for which can run more than $100 million, when experience makes them suspect that the spike in lumber prices will be transitory.
Textile mills
The crippling worker shortages that have erupted across American manufacturing hit the textile industry early.
U.S. textile manufacturers began to feel the pinch a year ago, said Kim Glas, president and chief executive of the National Council of Textile Organizations, and the need for workers has intensified as the pandemic has waned and Americans have rushed to reload their back-to-school and business-casual wardrobes. Shortages are so acute that manufacturers have had to turn down contracts from businesses that want to make their goods in America, Glas said, even as global competition intensifies.
Nonmanagerial workers at textile mills saw their pay rise almost 18 percent since the pandemic began, to $880 a week, even as employment at the mills remains more than 10 percent below pre-pandemic levels.
Glas said qualified factory workers were in short supply because of intense competition between sectors. The number of job openings per manufacturing worker in April was almost double pre-pandemic levels, according to the Bureau of Labor Statistics.
Beyond competition, the shortage could be driven by workers who were sidelined during the coronavirus crisis and were considering different careers, by workers who had to care for children or family members during the pandemic, or even by workers collecting unemployment benefits.
Specialized long-haul truckers
Trucking companies in the area represented by the Richmond Fed, which stretches from South Carolina to Maryland, said in a recent Federal Reserve “beige book” that they had to turn away business because they didn’t have enough workers and new tractor-trailers are in short supply.
Long-haul truckers, particularly those who haul specialized freight such as refrigerated trailers, are earning an average of almost $1,060 a week, up 9.4 percent this year alone. Gusto, the payroll processor, found that bonuses for transportation-sector workers in May were almost double their typical level.
“A business owner might turn to a bonus because it is an effective way to attract workers while not committing to wage increases at a time when there’s a lot of uncertainty around the future path of the economy,” said Gusto economist Luke Pardue.
Some argue that, rather than a worker shortage, the trucking industry is facing a turnover crisis. Hundreds of thousands of new commercial drivers’ licenses are issued every year, but entry-level trucking jobs can be brutal, and few of those workers stick around.
“The idea of a driver shortage is a myth that has been around for decades. The real problem is high turnover, particularly in the truckload or long-haul sector of the trucking industry,” Norita Taylor told Mark Shavin for The Post. Taylor directs public relations for the Owner-Operator Independent Drivers Association.
Movers
As the housing market heats up and millions of Americans opt to move — whether it be to an outer-ring suburb, a remote exurb or an increasingly affordable urban rental unit — movers are caught in the middle.
Competition for movers has become so acute that pay for nonmanagerial workers rose almost 14 percent in 2021, to $745 a week. And moving companies still aren’t finding enough workers.
In late May, Jesse Newman reported in the Wall Street Journal that customers across the country were being stranded for weeks without their belongings as companies struggled to find the personnel needed to haul them across the country.
“They must be bringing it by wagon train,” one frustrated customer told Newman.
Specialty finishing contractors
Pay for certain specialized finishing contractors — folks who install items from draperies to closet organizers — is up 17 percent this year, to $1,075 a week. Yet there are fewer of them than there were when the year began, an illustration of just how competitive the market for skilled tradespeople has become.
Across the economy, “companies might have to adjust their expectations and consider hiring people with less experience — or the wrong experience — whose skills can be updated for post-pandemic roles,” wrote Nela Richardson, chief economist for the payroll processor ADP.
Mental health practitioners
Nonmanagerial workers at the offices of psychologists and other mental health workers have seen their earnings jump 19 percent this year, and 30 percent over the course of the pandemic, to $731 a week. And yet few people have been tempted into the profession — employment is up just 2 percent this year.
Anxiety, depression and stress were already rising before the novel coronavirus emerged, and the crisis has pushed everything into overdrive, said Karen Stamm, director of the American Psychological Association’s Center for Workforce Studies. It’s taking a toll on the nation’s mental health professionals.
“I also wonder if we’re seeing some burnout and some practitioner fatigue as the pandemic drags on,” Stamm said. “Forty percent said they felt burned out last September, and I would imagine that’s only higher now,” she added.
Veterinarians
Interest in pet adoptions hit a record in April 2020 at the height of shutdowns, according to Google Trends. Veterinarians have scrambled to keep up with the demands of all those neophyte pet owners.
“Everybody is mentally and physically exhausted. They are giving more than what they can,” veterinarian Christina Davis told West Virginia television station WTAP. “We don’t have time for our personal lives really at all, and it’s really taken a toll on the veterinary world.”
Employment in the category including veterinarians remains down about 20,000 from its prerecession high, but weekly earnings for nonmanagerial employees have soared 16 percent to $1,352 since the pandemic began, all of the gains happening in 2021.
In LaQuinta, Calif., Village Park Animal Hospital went from a staff of 49 before the pandemic to just 38 workers in May, according to Cat Makino of the Coachella Valley Independent.
The practice’s owner, Kathryn Carlson, told Makino that customers’ emotions ran high during the pandemic, bringing staff stress levels up with it. “I lost two of my receptionists when a client was rude, even using profanities, which caused my two receptionists to cry,” Carlson said.
Lessons from the tightest labor markets
There are still millions of eager and eligible potential employees in the United States, but the tightest labor markets make it clear that employers have already snapped up the most obvious candidates. If employers want to ramp up to meet post-pandemic demand, they’re being forced to search harder for employees and perhaps offer bonuses or higher wages, said Pardue, the Gusto economist.
“The pandemic rocked labor markets in several important ways,” said University of California at San Diego economist Jeffrey Clemens. “It broke many linkages between workers and their pre-pandemic employers, and it introduced a broad set of factors that make it less attractive for people to be in the jobs that they previously held.”
According to Clemens, those factors include the health risks inherent to in-person work, expanded employment benefits and expanded responsibilities outside work, such as child care and elder care.
“It may simply not make sense for a large number of people to be back at work unless they’re about to receive substantially higher wages than they received prior to the pandemic,” Clemens said.
The forces keeping Americans on the sidelines should begin to dissipate by late summer, according to Pardue.
“Given certain states are likely to roll off the unemployment insurance supplements and schools are likely to reopen — meaning parents can enter the labor force — the shortages are likely to be temporary,” Pardue said. “By September or August, I would anticipate the labor force being a lot more fluid than it is right now.”
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