Labor Shortage Permanent Even If Economy Recovers?

WSJ noted “4.3 million worker are missing” & asked “where did they go?” The causes in the paper’s deep dive are all over the map, but perhaps the key take away is “many economists expect the labor shortage to last years & some think it could be permanent.”

So, are we looking at another Obama-like “new normal” as in “stagnation” only this time in job fulfillment rather than financial growth? The numbers are alarming. For one thing, despite generally higher wages, “workers are quitting at or near the highest rates on record in sectors such as manufacturing, retail & trade, transportation & utilities, as well as professional & business services.” The over all participation rate, in fact, has experienced its biggest drop in the early months of the pandemic since at least WWII. And, it’s fallen “broadly across demographic groups & career fields, but particularly fast among women, workers without a college degree & those in low-paying service industries such as hotels, restaurants & child care.”

As usual, the nation's economists find it hard to achieve a consensus view on the causes. Long-festering employee burnout on top of a rapidly changing hi-tech workplace; the turn off of a rat race culture & the lure of self-employment or early retirement; too much or poorly targeted federal subsidy payments to people thrown out of work; societal chaos in how to fight (or not fight) the pandemic once the worst was past; and companies themselves making fundamental if not revolutionary changes to the way they do business just to survive are just several of the debated forces at work. But, again, once the precedents, whatever they are, have been made, will the undeniable labor shortage be permanent & will balking workers even want or be able to go back to those 4.3M supposedly awaiting jobs?

Davd Soul