This is a bit about the current "labor shortage" from Brad Hicks. (Hint: the current number the labor force is down is 1.78%)
--Kim
Six-plus months of employers whining about the labor shortage. Now they're saying don't look at the (historically VERY low) unemployment rate, look at all the people who are missing from the labor market! So okay, quick tutorial and some numbers.
The Labor Force Participation Rate measures what percentage of Americans either (a) have a job OR (b) are available to work, have the skills needed to work, and who have looked for a job recently enough that they still count as "looking for work." (If you think "have the skills needed to work" is politicizable, you're right. But it's what we've got.)
And because the labor department has figured out that this is a pretty useless number if you include people who may still be in college or who are old enough that no matter what they say, almost no employer wants them, they separately measure the Prime Age Labor Force Participation Rate, the age when you can reasonably expect that everybody except the disabled and stay at home moms should reasonably be working: 25-54.
The graph below is of the household survey data for the Prime Age Civilian Labor Force Participation Rate from January 1st 2019 (before the pandemic) to now. Note that the absolute peak was 83%. Note that the absolute low was 79.8%, when the most businesses were facing actual shut-downs because of the pandemic. Note that it is back up to 81.6%. Subtract 81.6 from 83, you get 1.4. Divide that by 83 and you get ... 1.78%. The absolute upper limit for the number of people who were kicked out of the labor market by covid and who haven't returned yet is not quite two percent. They're claiming that losing a hair under one out of every fifty workers is enough to crash the economy and kick off a wage-price spiral that will destroy us all.
Some of those people were permanently crippled, or killed, by covid. A lot of those people have gone back to school to learn a new job or are in the process of starting their own businesses, not really unemployed, not really available to hire no matter what the bureau of labor statistics thinks.
The employers who have one third of their jobs empty right now, who can't fill one third of their openings, are blaming the one point eight percent who are not back into the labor force since covid.
This is why I keep telling people: 98% of the workers your business (and others) laid off aren't sitting at home waiting for the call back. THEY FOUND OTHER JOBS. There isn't a labor shortage. There are competing employers who can make better offers than you. That's not a guess on my part. Seriously, it's not. The bureau of labor statistics CALLED THEM UP AND ASKED.
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Labor Force Participation Rate - 25-54 Yrs. | FRED | St. Louis FedFRED.STLOUISFED.ORGLabor Force Participation Rate - 25-54 Yrs. | FRED | St. Louis Fed- Like
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