America’s labor shortage is bigger than the pandemic

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Labor shortage in America has become a wheel of doom, ruining our lives and societies. And many of the underlying problems that led to this breakdown are bigger than the pandemic itself.

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big picture: Millions of immigrants, aged workers and mothers are missing from the labor force. They create problems like labor shortage sSupply chain crises, school closures, and skyrocketing childcare costs – and some of those problems exacerbate labor shortages.

  • US CEOs say labor shortages are the biggest threat to their businesses this year, in a poll released yesterday by the conference board.

state of play: Labor market problems are largely about Covid, but with root causes that predate the pandemic:


Lost immigrants: According to the US, there are approximately 2 million under-working age immigrants in the US due to the immigration restrictions of Covid Calculation According to census data from two economists from the University of California, Davis.

  • There are approximately 1 million highly educated working-age adults.
  • Immigration began to slow down during the Trump administration.

Great Retirement: Covid increased retirement rates. Flush with cash from a booming stock market and fearful for their health in a pandemic, many more older workers left the workforce.

  • According to U.S. estimates, there are 3.3 million more retirees by October 2021 than in January 2020 (aka The Before Time) economists In St. Louis Fed. The numbers exceeded pre-pandemic demographic expectations.
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Troubled Mothers: Misty L., a leading economist at the Census Bureau. According to Hagens, there are about 1.5 million fewer mothers of school-age children actively working than in the time before the pandemic.

  • Lack of social policy support for parents, especially mothers – a major issue during the pandemic – labor force participation rates for women in the US have long been depressed

What will happen next: Economists expect that when it is safe to return to work, more Americans will actually go to work.

  • “The most obvious solutions are public health solutions,” says Aaron Sojourner, a labor economist at the University of Minnesota’s Carlson School of Management. If people are healthy, and the risks are low, they will be more willing to go back to work. “It’s a win win.”

But, but, but: Unless policy interventions take place, there will still be a shortage of migrant workers, leaving other parts of the economy behind.

  • “We’ve lost two years of immigration and there’s nothing in our system that allows us to catch up,” says Giovanni Peri, an economist at the University of California, Davis, who calculated the 2 million number with a colleague. .
  • Immigrant workers can help address shortages in many industries, including childcare.
  • More childcare workers will have a downstream impact on working mothers and older women who have stepped out of work to help with childcare for grandchildren.


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