Press "Enter" to skip to content

Current Worker Shortage Result of Long-Term Decline in Labor Availability, Not Unique to Pandemic or Pandemic Relief

Last month I wrote that South Dakota’s Republican leaders are scapegoating pandemic unemployment assistance for the long-standing worker shortage that at least a decade of Republican hand-wringing and crony capitalism have failed to remedy.

KELO-TV follows up with a report in the same vein and links to a U.S. Chamber of Commerce report that shows the difficulty in filling jobs nationwide is not a unique side effect of the coronavirus pandemic but a result of a dramatic decade-long decline in available workers:

U.S. Chamber of Commerce, Worker Availability Ratio 2009–2021, "The America Works Report: Quantifying the Nation's Workforce Crisis," 2021.06.01
U.S. Chamber of Commerce, Worker Availability Ratio 2009–2021, “The America Works Report: Quantifying the Nation’s Workforce Crisis,” 2021.06.01.

Since the Great Recession, when the U.S. had nearly 8 workers available per job opening, the worker availability ratio steadily declined to 1 in 2018 and stayed there for two years until the pandemic upended the economy. The Chamber’s chart shows the worker availability ratio still hasn’t fallen back to that pre-pandemic bottom. SO if businesses are crying about a hiring crunch now, they should have been wailing and gnashing even more deeply before the pandemic.

By the way, the Chamber finds South Dakota’s worker availability ratio of 0.6 is the worst in the nation. The fact that we were among the most dogged states in refusing to let coronavirus change our economic activity further emphasizes the fact that our state’s workforce shortage has much less to do with pandemic upheaval or government responses thereto and more to do with chronic economic and policy ailments that South Dakota government and business leaders either cannot or will not solve.

12 Comments

  1. O 2021-06-23

    One element of this shortage that has not been discussed enough is the nativist anti-immigrant fervor that resulted in fewer people allowed into the US to work. Obviously some of that squeeze came from COVID travel restrictions, but when even legal immigration flows are slowed, the result is fewer workers — especially in the service industries that see the hardest jobs to fill.

    This also goes a long way to dispelling the myth/GOP talking point about immigration means “they” are taking “our” jobs. Americans refuse to take the jobs previously held my immigrant laborers.

    I wish I could remember a more specific source, but the Chamber of Commerce did a survey of the currently unemployed and found that about 16% are choosing not to return to work because of the extra federal benefit. Oddly enough, they had previously found that 25% report making more with that benefit than at their previous employment.

    I will also posture that the US creates too many crappy jobs. It is a national race to the bottom.

  2. Donald Pay 2021-06-23

    There’s a statistic that indicates a lot, I think. It’s called “churn rate,” which is new hires+separations. South Dakota has a higher churn rate, indicating a lot of job dissatisfaction. There’s a lot of job openings because people are leaving jobs and going to other jobs that pay more, that have better benefits, that provide more hours, that have better schedules, etc. Employers need to look at themselves and what they can do to keep employees longer. Treating people like dung and accusing them of being lazy ain’t the way to attract workers.

  3. Arlo Blundt 2021-06-23

    Well…Donald, your point on “churn rate” is well taken…In my day, the fellas working with me on so-called blue collar, laboring jobs considered themselves free agents. They had very little loyalty to the boss and the people I worked for had no loyalty to me. We were expendable. Employees would jump for a dime an hour raise and believed you were a fool if you did not. The boss was always suspected of finding ways to short your paycheck. Without that reciprocal loyalty between boss and employee the whole system breaks down.

  4. Porter Lansing 2021-06-23

    Arlo … A worker IS a fool not to churn for more money. What loyalty does a company have to it’s workers?

    In labor unions a job is bid, union workers (better, faster, and under budget) complete the job and the contract is over. On to the next contract. Companies like to keep their non-union workers under their thumb, paying low wages, poor benefits, and layoffs at will.

  5. Steve P 2021-06-23

    “….better, faster, and under budget….” What a laugh.

  6. O 2021-06-23

    Porter, I concur with your loyalty point. It seems more and more like a business feels it is doing the worker a favor by having them employed and that action alone warrants loyalty to the employer (which quickly becomes the road to exploitation). Employer loyalty is measured in salary and benefits. Given the continuing rise of income inequality, and SD’s “open for business,” loyalty to the employee is little more than lip service — certainly in the industries that struggle most for employees.

  7. Porter Lansing 2021-06-23

    Steve P – What kind of suck ass job owner would hire you, ‘ya puke?
    You ain’t union material, sweetie.

  8. Porter Lansing 2021-06-23

    Absolutely right, O
    SD might be open for business but there’s nobody buying and no workers willing to participate.
    Welcome to Loserville, pop. Governor Noem

  9. Porter Lansing 2021-06-23

    PS … Steve Pearson – Are you still working at that SF convenience store and claiming to be an ordained minister?
    Remember this from 09.01.19
    CORY TALKS TO STEVE PEARSON
    Screw Steve Pearson. He asks ACLU and me for data when we cite facts he doesn’t like, but when his idiot-buddy Jason Ravnsborg says something absolutely unsupported by data and experience, Steve treats those words like Gospel and calls us names for questioning Jason’s divine rightness. Screw that, Steve, and screw you for bad-faith propaganda. Go home.
    ACLU and Libby Skarin have more policy knowledge and data in their pinky finger than Ravnsborg has in his whole body.

  10. Cory Allen Heidelberger Post author | 2021-06-24

    On the churn Donald mentions: I’m not finding state-level data in my casual Googling, but I do happen upon this report from the Work Institute That says the percentage of workers voluntarily leaving their jobs in 2018 was 27%, up from 17% in 2010. The churn trend line steadily increased during that period, pointing to the prospect of 35% of workers quitting and seeking other employment by 2023.

    Evidently part of the worker shortage is employers having to hire more often. Could we interpret that as a sign that the free market is working, providing more opportunities that workers find worth pursuing? Could the Affordable Care Act be helping increase that quit rate by making it easier for workers to leave their jobs without losing their health insurance? Freeing people to change jobs more often would be another victory for capitalism: we want labor to move freely in the marketplace to optimally distribute talent to where it can be most productive, right?

  11. Cory Allen Heidelberger Post author | 2021-06-24

    O! Great point! We haven’t discussed the reduction in immigration as a contributor to the worker shortage—how could we miss such an obvious feature?

    Axios hasn’t missed it:

    Immigrant and non-immigrant visas issued during the year ended October 2020 were down by nearly five million, or 54%, from 2019.

    572,587 fewer people received temporary or permanent worker visas (H, L, O, P, Q, J, and E) in 2020, a 44% drop from 1.3 million in 2019.

    The most significant drop-offs were for J and Q visas, for work- and study-based programs like au pairs, camp counselors and cultural exchange. Those were down 68% and 63%, respectively.

    H-visas for specialty work, temporary agricultural and non-agricultural work fell by the smallest percentage (24%) [Dan Primack and Hope King, “Immigration’s Role in America’s Labor Shortage,” Axios, 2021.06.17].

    Funny, though, that for all the new people Kristi Noem says she’s getting to immigrate to South Dakota, we’re still seeing a worker shortage. What’s happening—is Kristi just recruiting a bunch of lazy layabouts?

  12. Richard Schriever 2021-06-24

    Steve P – I work for a closed shop – that means you must belong to the union to get the job – employer in the heavy construction industry. Over the years it has been my experience that when we are working as a subcontractor for non-unionized primary contractors – or with other non-unionized subs, we ALWAYS have to take a few days off from large projects because our production rate is so much faster to the crews from the non-unionized outfits – they CAN’T KEEP PACE. They need extra time to either get far enough ahead of us we don’t run them over, or extra time to follow up on our work, as process timing is critical.

Leave a Reply

Your email address will not be published. Required fields are marked *