The unemployment rate hit a 17-year low last fall of 4.1 percent. However, another trend is impacting employers and the economy at large: labor shortages.
Job openings in the U.S. have been at or near the record rate of 6 million since June, according to the Bureau of Labor Statistics. This has real effect on growth, and it’s becoming a source of concern for some economists.
“If you have less labor, you’re going to have less growth,” Wayne Winegarden, an economist and senior fellow at the Pacific Research Institute, tells The Washington Post, “unless it’s compensated by more technology or higher productivity.”
Job Vacancies Slow Job and Economic Growth
While it might seem that too many jobs is a good problem for a country to have (especially after a not-too-distant recession) the long-term effects of a labor shortage are actually pretty challenging. The main issue is that these shortages limit employers’ ability to grow, which in turn slows or even stalls the growth of the economy.
Even on an immediate or short-term basis, labor shortages can be a real problem. A shortage of snowplow drivers and ski resort employees in the state of Maine this winter, are examples of this. Similarly, oil drillers in Texas are increasing production, but they’re struggling to find the truck drivers they need, which is limiting production.
Are Tax Cuts the Answer?
The GOP’s tax cuts have been billed as a way to add jobs and grow wages, but some economists are skeptical.
“Most of the people who really wanted to get back to work — they’ve already recovered from the recession.” Alan Cole, an economist who studies tax policy, tells The Washington Post.
The problem these days isn’t that workers can’t find openings. It’s something else.
One important issue is what’s been dubbed the “skills gap.” The term means different things to different people. But, the basic idea is that employers have been struggling to find workers with the necessary technical skills. One way to address the labor shortage problem would be to focus on creating programs that provide available workers with the right training.
Also, the nation’s opioid problem is having a profound effect on the economy as well as on individuals and families. This serious epidemic demands new and improved solutions, like better and more readily available treatment options, for example. Without such improvements, the nation’s addiction crises could get even worse.
Additionally, raising wages could help companies to attract more qualified workers to available jobs. Along those same lines, increasing benefit packages or other aspects of compensation could help with recruiting.
Workers should take note of these shifts and use them to inform their own decision-making processes. There is increasing evidence that suggests that opportunities abound for middle-skill jobs and that these types of availabilities will persist or even increase in the years to come. Workers who are equipped with the right training will most likely have plenty of employment options.
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