Business leaders, economists sound alarm about shrinking labor force
[ABC NEWS]
WASHINGTON (SBG) — As summer begins and states lift pandemic restrictions, the biggest challenge employers and local economies face is a lack of available workers, according to a new report by the U.S. Chamber of Commerce.
“All the signs point to a really tight labor market,” U.S. Chamber of Commerce Vice President Neil Bradley told Sinclair.
According to the report, there are about half as many workers for every open job in the U.S. than there have been on average for the past 20 years.
Many Republican governors have blamed federal enhanced unemployment benefits, claiming they act as a disincentive to work. Maryland Gov. Larry Hogan this week became the latest to opt his state out of those benefits. In his announcement, Hogan cited the the struggles of business owners in his state to find workers.
According to data from the chamber and the U.S. Bureau of Labor Statistics, there are many factors contributing to the labor shortage.
“We had a worker shortage crisis before the pandemic. In fact, right before the pandemic hit we had more open jobs than we had people possibly available to fill them,” Bradley said.
Another factor contributing to the shortage: the U.S. population is growing at the slowest rate since the 1930s, according to the Census Bureau.
Millennials are expected to maintain that trend.
Sophie Hoover, 27, and her fiancé Danny are getting married in September. Hoover is starting her own video production company in Colorado and has no plans to have children.
“It’s a personal decision but also you know, I mean, things are just getting like so expensive,” Hoover said.
Hoover isn’t alone. According to Morning Consult, one in five millennials says they don’t want to have kids because it’s too expensive.
“You would have to take on a whole other person or multiple other people is, it just doesn’t fit into finances a lot of the time,” Hoover said.
Some countries in Europe and Asia are faring worse than the U.S., according to Jacob Kirkegaard, a nonresident fellow at Peterson Institute for International Economics.
“When you compare that to the situation in Japan and many countries in Europe for instance where the working age population is actually now falling, the U.S. is still in a relative sense much better off, just not in such a great position as we were historically,” Kirkegaard said.
Still, the effects of a slowing population growth will have immediate effects on the American economy, Kirkegaard said.
“We should expect somewhere between half and 0.8 percentage point of growth less every year as a result of the decline in the acceleration of the rate of the population,” Kirkegaard said.
Bradley said there are steps the U.S. can take to curb the labor shortage.
“We know that some people who are unemployed don’t have skills to match the open jobs. Let’s help with employer-led skills programs so they get what they need to be able to accept the jobs that are open,” Bradley said.
Bradley said a change in immigration policy is also necessary.
“We need a reasonable policy that’s based on our workforce needs and that’s gonna help our economy grow. We don’t have that today. We can take important steps to get that,” Bradley said.
Kirkegaard also pointed to a change in immigration policy as a possible solution. He listed other tactics to bolster the economy, like encouraging people to retire later or have more children.
China this week announced a change to its one-child policy, now allowing couples to have up to three children. Kirkegaard doubts this will be an effective remedy to China’s declining population growth.
“Just because you tell them they can have two children or three children doesn’t mean they’re going to do so,” Kirkegaard said.
Encouraging people to retire later also likely wouldn’t be effective, Kirkegaard said.
After a disappointing April jobs report, the U.S. will get an update on how the economy is recovering and what employers are up against when the May jobs report is released on Friday morning.
By AHTRA ELNASHAR