Despite the 8 million Americans unemployed, businesses are failing to fill vacancies following the gradual opening after a year of the COVID-19 pandemic. While consumption, production, and demand for workers are growing, many businesses simply cannot find candidates to fill the new positions demanded by the recovery.
Although many of the temporarily unemployed were able to regain their jobs, long-term unemployment persists. Data from the U.S. Bureau of Labor Statistics puts the unemployment rate at 6%. Taking into account individuals who simply dropped out of the labor force and did not return to look for work, the unemployment rate may rise to 9%, says the Federal Reserve.
The curious thing is that despite the prolonged unemployment, there has been a spike in new job openings, even higher than pre-pandemic levels, yet many of these openings have gone without applicants.
Nearly 2,391,472 vacancies have opened up in the healthcare sector, and another 2,560,277 vacancies in the transportation sector, 528,355 in the fast-food sector, and 871,935 in retail, according to an NBC News.
Why are companies failing to fill vacancies despite the 8 million Americans unemployed?
There are several reasons why millions of job openings remain unfilled, despite the fact that there are more than 8 million Americans unemployed.
Many employers comment that they are finding it impossible to compete with the money provided by President Biden’s stimulus checks, plus the additional $300 unemployment assistance provided under the stimulus plan. For some analysts, the unemployment benefit is too generous.
On the other hand, many candidates are still afraid to report to their physical jobs because of the risk of catching one of the new variants of the coronavirus now circulating throughout the United States.
Many others live with their parents or older adults and would prefer to opt for a job that involves telecommuting for fear of infecting a relative in the at-risk population.
While some of these new vacancies may pay up to $45 an hour, others may pay less than $13 an hour. With the coronavirus emergency transfer programs, many of these wages may not be enough to attract back the workforce that was forced out of their jobs in the spring of 2020.
The National Federation of Independent Business (NFBI) reports that in February about 40% of small businesses in the U.S. had vacancies that they had been unable to fill. According to Bill Dunkelberg, NFBI chief economist, “One of the problems, of course, is that it pays pretty well to be unemployed these days.”
Another part of persistent unemployment can be explained by skills mismatches between the worker’s faculties and the duties of the position, as workers are either insufficiently trained to take on the job, or over-trained.
Of the currently unemployed, 2 million reported being temporarily unemployed in March, the lowest number since February 2020. However, this figure reflects that at least 6 million people are on indefinite unemployment.