What’s Causing the U.S. Labor Shortage? Take Our Poll

A fast-food restaurant advertises that is is hiring with a starting rate of $10.
Darwin Brandis / Getty Images/iStockphoto

April’s jobs report fell incredibly short of the expected 1 million added jobs, coming in with only 266,000 added new positions. At the same time, business owners all over the country are struggling, reporting that they cannot find enough workers to fill open vacancies – the hotel industry being a prime example. If we are missing job targets, but businesses can’t find people to fill vacancies – then what’s causing the supposed “labor shortage”?

Weigh In: What’s Causing the U.S. Labor Shortage? Take Our Poll

Many argue that the sustained and generous rollout of direct payments to would-be job seekers has disincentivizes them to find work. Last week, Senator Joni Ernst R-Iowa remarked, “Paying people not to work is not helpful… It is delaying us from returning to normal pre-pandemic life,” Fox Business reported. What’s more, the New York Times claimed in a recent report that low wages are keeping people from filling positions – essentially, qualified applicants are simply searching for positions that pay more for their work.  Companies like McDonald’s and Chipotle have gone so far as to raised minimum wages and offer sign-on bonuses – but to no avail.

While there may be enough open positions available, the quality of those positions differs. In February, vacancies in the accommodation and food services sector increased by 104,00 jobs, but vacancies decreased in state and local government education and educational services. Former chief economist for the Department of Labor Heidi Shierholz told Mother Jones that when looking at job data, “You don’t find evidence that unemployment insurance is a huge driver of keeping people out of the labor force.” She adds that low-wage sectors have seen by far the most job growth.

Make Your Money Work for You

Another major hurdle to getting back to work for millions of Americans has been the lack of childcare. Shierholz adds disappointing job growth in April was caused by an increase in layoffs and quits, which was “driven entirely by women,” pointing to “another cause, given that women still shoulder the lion’s share of care responsibilities in the home.”

Share Your Opinion: Why Aren’t There Enough Workers in America?

Low vaccination rates and fears of infection have also contributed to peoples’ hesitancy to return to the workplace, as many jobs require face-to-face contact with other people. Earlier this month, U.S. Labor Secretary Marty Walsh stated that he believes people aren’t coming back to work because their old job simply isn’t there, adding, “Unemployment insurance is a temporary fix. But, you know, we’re still dealing with a global pandemic.”

More From GOBankingRates 

About the Author

Georgina Tzanetos is a former financial advisor who studied post-industrial capitalist structures at New York University. She has eight years of experience with concentrations in asset management, portfolio management, private client banking, and investment research. Georgina has written for Investopedia and WallStreetMojo. 

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.