(Part one in a series.)
Recently I was sharing a cab with a client on my way to speak at a conference. He turned to me and said that he was interested to hear what I had to say about the state of the U.S. labor market. When I asked him what specifically he was hoping to hear in my talk, he said, “Well, I’m hoping you’re going to tell us where the workers went and when they’re going to come back! We’re dying out here and people just don’t seem to want to work anymore.”
I totally understand his frustration and probably so do you. If only I had a dollar for every time someone asked me this exact same question. The truth is, they ARE back to work; they’ve been back to work for a long time. Problem is, there just aren’t as many of them as there used to be. And when I explain this to people like my client, they seem surprised. And that, in turn, surprises me because these labor trends have been on the horizon for a long time.
My suspicion (and fear) is business owners have been ignoring the reality that there aren’t enough workers for all the jobs that are out there. In fact, in July 2024, there were 1 million more job openings than there were unemployed workers to fill those jobs. This is a huge improvement over this time last year, when there were almost 4 million more jobs than there were workers. However, we are still struggling with an incredibly tight labor market, low unemployment at 4.3% and fierce competition for skilled and front-line hourly and entry-level workers. What’s worse is that we don’t anticipate this changing anytime soon—like in the next five years or so.
This fact has become my personal and professional mission it seems—to travel the country speaking to business leaders, making them aware of what they should already know: there simply aren’t enough workers to satisfy all of the promises companies have made to their customers, let alone to support their own growth projections.
One main reason why: missing workers. Since the COVID-19 pandemic, we have lost approximately 8 million people from the workplace. These workers represent approximately 5% of the overall workforce, a sizeable and noticeable number to be sure.
There are a number of places those workers went:
- The Great Beyond: According to Fed Chairman Jerome Powell, close to 500,000 workers died from COVID-19.
- Long COVID-19: The Brookings Institute reports that 4 million full-time workers have left the workforce due to long COVID-19.
- Early retirement: Goldman Sachs reports 2.5 million older workers retired earlier than anticipated and are not returning to the workforce.
- Immigration: JP Morgan Chase reports there are 1 million fewer legal immigrant and non-native born workers than before the onset of the COVID-19 pandemic.
In Part 2 of this article, I will delve into other factors, including an aging workforce, lower birth rates in America as well as employment projections.
Claudia St. John, SPHR, SHRM-SCP, is the founder and CEO of The Workplace Advisors, a leading HR consulting and training firm and the endorsed HR provider for the North American Association of Floor Covering Distributors. A certified professional behavioral analyst, St. John empowers organizations with evidence-backed insights so they can navigate the evolving landscape of talent acquisition, engagement and retention with confidence and foresight.
