We’ve all seen the signs at restaurants or posts on social about it - there’s a labor shortage.
James Kemper recently joined Senior Reporter Sarah Self-Walbrick in the studio to unpack what’s actually going on with the local market. Kemper is an assistant professor of economics at South Plains College and also an adjunct instructor in healthcare economics of policy at the Texas Tech University Health Sciences Center.
Sarah Self-Walbrick: The labor shortage is a national trend, but what are we seeing locally?
James Kemper: I think it’s good to just highlight how far we’ve come throughout the pandemic. So based on the August preliminary data from the Bureau of Labor Statistics, the Lubbock metro area has gained almost 21,000 of the 24,000 jobs lost. That’s roughly 90%. So, we’ve come a long way.
But that also highlights what the labor shortage is. There’s about 10%, or 3,000, workers in the Lubbock area that haven’t found jobs that previously had a job before the pandemic. And that kind of gives you an idea. If you go to any business, and they’re at 10% less capacity, there’s going to be a shortage. That’s what we’re essentially seeing.
One of the more visible examples is the service industry. What’s going on there?
We have some data from the federal reserve bank out of Dallas. In the service industry, 67% of respondents said that they’re trying to hire someone and having a hard time doing so and 72% of those said the lack of available applicants was a problem. About 42% said it was because workers were looking for higher wages. And 33% said the lack of skill and 28% said the fear of getting COVID is a hindrance. About one in four believed the generous unemployment benefits were one of the reasons and 15% said the lack of childcare availability.
There are all kinds of reasons why people aren’t going back to work.
It’s not just the service industry that’s been affected. Are there any other sectors, in particular, that are struggling to hire and keep workers right now?
One, in particular, would be the healthcare industry. They actually had a labor shortage prior to the pandemic. We have a lot of people aging in the United States and so we have a higher demand for healthcare to begin with. At the same time, we don’t have as many healthcare workers graduating and filling jobs. The pandemic amplified that.
So this is a lot more complicated than “people just don’t want to work anymore,” which we’ve seen all over social media and on some restaurant signs?
Exactly. This is called friction, which is the time it takes for me to find a job. So let’s say that you and I want to get a hob, we can’t just walk into a store or restaurant and start working. We have to apply and go through a background check, etc. That exists in a normal market.
Now what we’re seeing is a more extended period of that friction. I might say, well I need to make sure that I work in an area that most people were masked or vaccinated. Or if I’m worried about childcare and need more flexibility. These businesses are going to have to negotiate to try to figure out what do we do, and obviously, you can’t just give everything to every employee. That won’t work. But it’s going to take time.
It’s not just people don’t want to go back to work, there are so many different issues. It’s going to take time.
What are some solutions? Whether short-term or long-term, what can we do?
First off, I would say for consumers, be patient. If you have to wait longer at a restaurant, be nice to the waitstaff and management.
From a policy standpoint, it’s a little bit messier. I don’t think that there are actual policies for small businesses that will work. It’s not as though you could say, ‘hey, let’s raise the minimum wage for workers.’ If I’m a parent who’s worried about childcare, that doesn’t help that factor.
So how long could this last?
I see parallels between the pandemic itself and economic recovery. Where, at the very first, we didn’t know as much, we didn’t know what COVID was, how it spread, etc. As we got more data from the science fields, we know vaccines work, we know masks work. As more economic data becomes available, we will know more ways we can fix this. But that takes time.
This interview has been edited for time and clarity.
Have a news tip? Email Sarah Self-Walbrick at saselfwa@ttu.edu. Follow her reporting on Twitter @SarahFromTTUPM.
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