April’s Jobs Report Was a Disaster
There are plenty of jobs, but no one to fill them.
Let’s get straight to the point: the economy added a mere 266,000 jobs in April, much further below estimates of almost 1 million.
This was nothing short of a disaster.
It means that even though there were a record number of job openings at small businesses, which serve as a proxy for the economy as a whole, for the third straight month, companies could not find enough people to fill those slots.
As I’ve written about previously, there are a few reasons why these jobs go unfilled:
- New graduates can’t find jobs
- Low skilled, low wage work is being automated
- Persistent fear of COVID
- Lack of child care
- High unemployment benefits
I thought that the combination of the vaccine rollout and stimulus packages would be able to help, but it looks like I was completely wrong. This problem is not going to be solved any time soon.
Bank of America has estimated that 4.6 million workers that would have been in the labor force before the pandemic are staying on the sidelines.
Some issues won’t be fully solved when life returns to normal, either. Factories, for example, have for years struggled with a dearth of skilled workers for specialized roles such as welders and machinists — a problem that would require significant investment and training to solve.
To battle this crisis, employers are being creative to find candidates.
For example, Chipotle is offering college tuition assistance after only 120 days on the job. Other companies are being more active.
Carolyn Lowe, CEO of a digital marketing agency, used to place an ad on job sites and wait for more than 100 applications to roll in.
Then came the COVID-19 pandemic and the flood of candidates’ emails became a trickle of perhaps a couple of dozen.
Now, Lowe has a new strategy: She scopes out potential candidates on LinkedIn and coaxes them to join her small, Austin, Texas-based company, called ROI Swift.
“We are actively poaching people,” she says
If you have a college degree, then this is a great job market to be in. Unemployment is only at 3.5% for those with a bachelor’s or higher, so make hay while the sun shines.
The bottom line is that 2021 is going to be a very bumpy year. The monumental, short-term shifts in financial policy and the accompanying changes in individual priorities are going to take some time to work themselves out.
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This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.