Even as the United States economy had created upward of 900,000 jobs last month, Companies are still struggling with staffing shortages. This is happening especially in the hospitality and leisure industries. In addition, many analysts cite unemployment benefits across the US as a reason for Americans not going back to work. But is this the entire picture?
Last month and up until September, most US States will end their pandemic unemployment benefits. Some have scrapped them altogether. But data still shows that in these states, job vacancies remain high. This has led many experts to believe that employees are not coming back to work for other reasons.
Just to note the impact of this staffing shortage, American Airlines, and Spirit Airlines had to cancel hundreds of flights last month due to staff shortages, and restaurants are seeing employees even leave mid-shift. The issue has become so severe that companies raise wages and benefits to attract people back to their jobs. At the moment, it is calculated that last month’s labor shortage amounts to 10,1 million job openings across the country.
We go through the reasons why experts believe that Americans are still not going back to their jobs:
Unemployment benefits and pandemic worries
As income keeps coming in, Americans are less worried about not making it to the end of the month than becoming sick with Coronavirus. This is especially true given that industries with a more considerable shortage of workers require a lot of contact with other people, such as air travel, hospitality, and leisure. This reason alone, however, will start fading as states keep eliminating the unemployment benefits, which will require some employees to get back to work.
Record savings
Because of gains from record numbers in the stock market, including the stock market growth until 2020 before the pandemic, and housing prices gaining big numbers – among other reasons- Some Americans were left with record savings. This has caused many households to be wary of going back to work and risking their health instead of depending on getting new mortgages at low rates and savings altogether.
Child care
This one is obvious. Even as many schools have returned from remote classes to the classrooms, some parents remain wary of sending their children to school- besides the fact that it is currently summer in the US-. This has caused many workers, especially women, to leave their workplaces and remain home. Data from the Federal Reserve Bank of Dallas puts this number at 1.3 million people.
Whichever is the reason, no policy could fit all of the workers remaining away from workplaces during the pandemic. So it seems that staff shortages will continue to be a problem for companies all over the United States. Especially in industries that involve work with the public.
How do you believe this shortage will affect the stock market? Let us know in the comments below.
For more insights on Markets, Investing, and Finances check out more of FlexInvest Academy.
