The labor shortage caused by the pandemic is finally easing.
That slowed the rapid wage growth that U.S. workers had enjoyed over the past few years, but also allowed companies to raise prices more slowly, reopen shuttered restaurants and ease product shortages.
However, labor shortages have not improved in all industries, and bargaining power has not shifted from workers to employers.
Some sectors are still struggling to find employees. As millions of Americans return to the labor market and join waves of immigration as the health crisis eases, some are choosing hope.
“Some labor shortages, such as retail, have completely disappeared,” said Julia Pollack, chief economist at ZipRecruiter, a major job site. “Other sectors, such as health care, have largely survived,” she said.
One way to measure the tightness of the labor market is to look at the percentage of job openings that are unfilled each month. Vacancies are counted at the end of the month, whereas the number of hires, which is the basis for determining the number of unfilled jobs, is aggregated throughout the month and is therefore not accurate.
Still, the high rate of unfilled vacancies reflects a tight job market with a lack of available workers. A low share usually indicates that the market is flooded with job seekers.
Another measure is the number of unemployed people per job opening. The lower the number, the tighter the market.
When the job market is tight, wage growth generally increases as employers bid to attract workers.
Let’s take a look at the industries with the most and least severe labor shortages, from most to most lenient, according to ZipRecruiter’s analysis of Department of Labor data.
financial activities
Percentage of unfilled job openings (July to September):63.5%
Number of unemployed people by job opening (September):0.2
Annual wage increase rate of average wage (August to September):4.9%
Pollack said that while the Federal Reserve’s rapid interest rate hikes and high mortgage rates are hurting some parts of the financial industry, banks, investments and mortgage lenders continue to hire and hire skilled workers. He said that he is having a hard time securing supplies. The market has become increasingly tight since the beginning of last year.
government
Share of unfilled openings:63.4%
Number of unemployed people per job opening: 0.39
Average annual wage growth:4.7%
State and local governments need workers but can’t compete with the raises and flexible work arrangements offered by private companies, Pollack said. The labor shortage has worsened slightly since the beginning of last year, but is expected to ease as the government begins to improve salaries.
information
Share of unfilled openings:62.3%
Number of unemployed people per job opening:0.53
Average annual wage growth:0.86%
The industry includes high-tech workers, many of whom were laid off from major companies like Amazon and Google in the past two years as the online boom slowed due to the coronavirus.
Pollack said the bias could be due to the high percentage of unfilled vacancies because many human resources managers at hard-hit tech companies were also laid off and could not be investigated. Additionally, many technology companies may count the same online job openings multiple times in different cities.
medical and social assistance
Share of unfilled openings:55.6%
Number of unemployed people per job opening:0.29
Average annual wage growth:3.5%
Hospitals and other health care providers are struggling to find nurses and other skilled workers to meet the rapidly increasing demand as baby boomers age. Pollack said many medical exams are not transferable between states, further slowing hiring.
Salary increases are limited by government programs such as Medicare and Medicaid, she said.
educational services
Share of unfilled openings:45.3%
Number of unemployed people per job opening:0.85
Average annual wage growth: not available
Like governments, school districts have difficulty competing with the private sector on pay and benefits. Pollack said teachers are in high demand, especially in specialized subjects such as science. The shortage has worsened since the beginning of last year.
manufacturing industry
Share of unfilled openings:34.9%
Number of unemployed people per job opening:0.66
Average annual wage growth:5.2%
Manufacturers have long struggled to find skilled workers, with fewer high school and college graduates entering the field. Labor shortages have eased since early last year as the pandemic improves and consumers shift purchases away from goods like TVs and computers to services like travel.
Manufacturing activity contracted for the 12th consecutive month.
Transportation, warehousing, public works
Share of unfilled openings:32.5%
Number of unemployed people per job opening:0.73
Average annual wage growth:4.4%
Trucking and warehousing companies primarily follow the manufacturing industry. Trucking companies are notorious for having high turnover rates and struggling to retain drivers for demanding job sites, but the labor shortage has improved somewhat since early last year.
Professional and business services
Percentage of unfilled openings: 31.7%
Number of unemployed people per job opening:0.33
Average annual wage growth:4.3%
This is a vast sector that includes architects, accountants, lawyers, advertising executives, office managers, and more. As a result, it largely reflects the economy, where the labor shortage has eased but is still increasing compared to pre-pandemic levels.
Accommodation and food services
Share of unfilled openings:16.8%
Number of unemployed people per job opening:0.54
Average annual wage growth:5.3%
The restaurant and hotel industry was among the hardest hit by the pandemic lockdown, with millions of people laid off. After that, stores reopened, but workers could not be found, and each industry suffered from a labor shortage. Many have left the industry due to burnout or health concerns.
However, the labor shortage has been halved since the beginning of last year as many workers, including immigrants, entered the market.
arts, entertainment and recreation
Share of unfilled jobs:9.3%
Number of unemployed people per job opening:0.7
Average annual wage growth:3%
Although the industry has been reinvigorated since the pandemic subsided, it is still unable to accommodate the large numbers of unemployed workers, actors, artists, and musicians who have returned to the job market.
construction
Share of unfilled openings:8.8%
Number of unemployed people per job opening:0.9
Average annual wage growth:5.1%
Ken Simonson, chief economist at the industry group Associated General Contractors, said that while the market appears to be easing, it is tight by historical standards.
From 2000 to 2017, there were 5.4 unemployed people for every job opening, Simonson said.
Many construction workers struggle with long-term unemployment between projects, creating a large labor supply.
But like manufacturers, contractors are struggling to find skilled workers as baby boomers retire and more workers shift to office jobs as remote work becomes more widespread. Yes, Simonson said.
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retail
Share of unfilled openings: -5.2%
Number of unemployed people per job opening:1.1
Average annual wage growth:4.2%
Like restaurants, retailers suffered widespread labor shortages early in the pandemic that eased with the health crisis as workers returned to the job market. Meanwhile, many retail chains are closing stores due to the shift to online shopping.
A negative percentage of unfilled jobs means that the number of openings throughout the month was greater than the number of vacancies at the end of the month.
