The U.S. economy is heating up as it emerges from the epidemic. Although the unemployment rate is higher than it was before the outbreak, many companies, including manufacturing, restaurants and construction, are unable to find enough workers.
The Wall Street Journal reports that surveys show some people are unable or unwilling to return to work for the following reasons: millions of adults say they are afraid of contracting or spreading the new pneumonia virus; businesses are returning to work earlier, but schools are not yet open and some parents must care for their children; many people are receiving more unemployment benefits than they earn at work; and, they do not have the skills required for the job or are unwilling to change careers.
U.S. companies are in full swing with their recruitment campaigns. According to the Labor Department, business owners added 916,000 jobs in March, and economists predict that the April jobs report, due out on the 7th, will add another 1 million.
However, the lack of workers is still serious, which may limit the economic recovery. Some companies are abandoning their businesses, such as abandoning bids to receive cases, slowing down the delivery of parts, or closing one of their restaurants, which slows down the pace of economic expansion. Other companies are raising salaries to attract workers, which could push up consumer prices or lower corporate profits.
An oversupply of labor will benefit workers. They may demand promotions and raises, or more flexible working hours.
Analysts say the shortage should ease gradually as more potential workers get vaccinated, schools open in full swing, and unemployment benefits expire in the workplace, but the process could take months and the effects are already surfacing.
Steve Lucas, CEO of iCIMS, a cloud-based recruiting platform with 4,000 major corporate clients including Target and Ford, said, “It’s a little shocking to get to this point. Companies can’t wait to grow and are taking steps faster than job seekers.”
Compounding the shortage problem is the fact that many workers, especially women, are having a hard time getting out of their homes. According to FutureEd, a Georgetown University think tank, only 60 percent of the 200 largest school districts in the U.S. were fully open the week of April 27, and many of the amenity classes reduced the number of children they accepted.
Some employers and economics cite the ramping up of unemployment benefits as resistance as well. For the week ending April 17, more than 16.1 million people received unemployment benefits, and received an additional $300 a week in federal benefits on top of the regular state average of $318, more than a full-time worker earning $15 an hour. The plus-size benefits expire in September and can be received for up to nearly 18 months, three times longer than most states typically allow for the period.
Another example is Lonre Zaman, who lives in Los Angeles, lost his job as a concert promoter more than a year ago and has been out of work since, living on savings, unemployment benefits and federal assistance for about $750 a week, which he says is enough to pay his rent and bills, although he has no money left over at the end of the month. He is waiting for his former employer to start hiring in the next few months.
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