State legislatures across the country are back in session. A recurring story in state after state has been the number of unfilled jobs that are available.
Various methods of tackling the shortage have been implemented between states, but the challenge seems to be the same everywhere. A faster reduction in additional unemployment benefits, a reduction in unemployment benefits and duration, and lower income tax have all been implemented.
Yet these policies have not resulted in a positive solution to labor shortages. Several states with lower and shorter duration benefits have lower labor force participation rates and higher unemployment than states with higher and longer duration benefits.
Some sources of labor shortages go beyond public policy. Here are three statistics that get to the heart of a bigger problem.
Goldman Sachs estimates that 60% of those who have not returned to work are over 55. These people represent about 3.5 million people. There is no way to fill the 10 million jobs available without reaching this group. Given that the Dow Jones rose 18% in 2021, many of them may have decided to retire for good.
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The second statistic concerns the creation of new businesses. Nationally, the number of start-ups has increased by 30% since the start of the pandemic. This growth has been fairly consistent over the past two years.
The third statistic concerns departures. The number and percentage of people nationwide who quit their jobs continue to set records. It should be noted that job terminations were on the rise before the pandemic. Aside from a momentary dip in early 2020, the job termination rate doubled between 2009 and 2019, and has increased by 20% since then.
These are all indicators of deep and widespread worker dissatisfaction. Many people have found their terms of employment unacceptable and have moved on.
Surveys indicate that around half of people working remotely would quit if asked to return to the office. Even before the pandemic, 60% of workers thought managers needed more training, and almost half quit because of managers. An analysis by job search firm Glassdoor found that “company culture is 12.4 times more likely than compensation to predict whether an employee leaves.” Factors such as lack of flexibility, recognition and weak disease prevention efforts have contributed to employee departures.
This is not representative of most companies, nor of those who take unfair advantage of unemployment insurance. But just as a few give unemployment compensation a bad name, some companies could be sending a negative message about work.
Under these circumstances, the actions that policy makers could take to address the problem are limited. Encouraging greater workplace flexibility and predictability could help. It would likely be effective to ensure that parents have access to quality, affordable and accessible child care and early childhood education. As birth rates continue to decline, policies that support more working parents would be beneficial in multiple ways. Providing a safe workplace, including actively preventing the spread of communicable diseases, could attract those with health issues.
However, none of these will be as critical as company culture and front-line supervisors with proper training and interpersonal skills. Companies could find ways to promote their corporate culture. Some communities promote a program for companies to survey their employees. Companies with a positive corporate culture get a special designation.
The expression “there is dignity in work” remains valid. But those who work must be treated with dignity. The pandemic has influenced people’s priorities. More and more, their purpose in life is not to work. They work in order to have the means to accomplish their goal.
Sioux City resident Steve Warnstadt is the government affairs coordinator for Western Iowa Tech Community College. He is a former Democratic state senator and retired Army National Guard Brigadier General. He and his wife, Mary, are the parents of a son and a daughter.