On Tuesday, The Wall Street Journal reported that an estimated 11.2 million job openings still remain on the market while far fewer people are searching for work, according to an estimated jobs report compiled by Indeed.com.
Economists and business owners also told the Journal that they expect jobseekers to return in high numbers as COVID-19 handouts and other government benefits expire in the coming year. The tight labor market has forced business owners to raise wages in some cases, but one entrepreneur told the paper that she has been looking into automation and cutting out certain workers altogether in order to keep costs low.
“Demand for labor is still incredibly high, but there’s also progress happening, and we are on track to getting back to a pre-pandemic labor market based on many metrics by this year, potentially,” Nick Bunker, an economist at Indeed, said to the Journal.
Joshua Shapiro, a chief U.S. economist at forecasting firm Maria Fiorini Ramirez Inc., told the Journal, “A lot of government support that was helping people out is over—the government cheese isn’t coming anymore. They’ll need to work in order to support themselves.”
“And kids are back in school, so parents don’t have to worry about what to do with their kids,” Shapiro added.
Michelle Pusateri, the owner of Nana Joes Granola in San Francisco, explained to the Journal that her company has been looking at cutting costs without having to hire more workers at a more expensive wage.
“We have been looking at increasing efficiencies through automation, which would mean not having to hire more people,” Pusateri said.
On the flip side, some employers are also reportedly less likely to fire workers during this time due to the difficulty in replacing them. That aspect of the economy can explain why jobless claims had trended down in late March, Reuters reported:
“U.S. businesses are not laying off workers because they know the enormous challenges they’re facing in filling open positions,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania.
“If initial claims remain below 200,000 for a period of time, it will raise a red flag with the Fed.”
Yet according to Patricia Buckley of Deloitte, rising inflation could harm workers as a whole because “while consumers’ expectations for inflation can affect wages, higher inflation can also lower demand for certain goods and services—potentially also reducing some employers’ demand for workers,” the Journal reported.
One part of the discrepancy in the market can be explained by the sheer number of people who left their job between 2020 and 2022.
The Daily Wire has previously reported that the COVID-19 pandemic “triggered a wave of people leaving their jobs, in a move that has been labeled ‘The Great Resignation.'”
“According to a new survey by Pew Research Center, 63% of people said they quit their job because the pay was too low, with 37% of those stating it was a ‘major reason.'” The Daily Wire noted. “Sixty-three percent also noted that they quit because there were no opportunities for advancement, with 33% pointing to that as a primary factor. “