Anecdotes and Evidence—A National Scan of Worker Shortage Analyses
Part One
By Aaron Hirsh for the Fund for Our Economic Future
Last week, we announced the launch of a multi-part analysis to answer the question on everyone’s mind: Where are the workers? (And, what do they need?) The Northeast Ohio labor force is down approximately 5% from its pre-pandemic level, as compared to an approximately 1.5% decline for the nation over the same period.
To unpack in greater detail what is happening locally, our analysis will connect national economic data with robust input from working-age adults and businesses in Northeast Ohio, to be gathered through surveys and focus groups.
As a first step, we took stock of what national data and analyses can—and can’t—explain relative to the current state of the Northeast Ohio labor market. The chart below summarizes what we learned after digging in on three questions: What are the most common theories on why there is a labor market shortage? How great of a factor does each theory seem to play in the current state of the labor market? And how much supporting evidence exists for the theory?
Here’s what we found, in a nutshell:
Theory
How much of a factor is this theory in the current labor shortage?
How much evidence exists for this theory?
Workers are leveraging stronger financial positions attained during the pandemic to remain out of the labor force.
Significant factor
Significant evidence
Reducing unemployment benefits caused people who were not working to return to the labor force.
Limited factor
Significant evidence
School closures and a lack of childcare capacity prevented parents, particularly mothers, from working during the pandemic.
Moderate factor
Significant evidence
Employment status for people of color has been disproportionately impacted by the Covid-19 pandemic.
Significant factor
Significant evidence
A wave of retirements among older workers is shrinking the labor force.
Moderate factor
Some evidence
Fear of Covid is preventing people from going back to work.
Limited factor
Some evidence
An excess of job applicants is raising the cost of hiring for employers.
Moderate factor
Limited evidence
Transportation barriers are preventing people from returning to work.
Moderate factor
Some evidence
Mental health challenges are preventing people from returning to work.
Moderate factor
Limited evidence
A decline in immigration due to the pandemic has shrunk the labor force.
Moderate factor
Some evidence
Deaths due to Covid have significantly reduced the number of available workers.
Limited factor
Some evidence
Changing preferences related to work have made some workers unwilling to return to their old jobs.
Moderate factor
Some evidence
Subsequent posts in our series will dive more deeply into some of the most surprising insights emerging from the existing research relating to each hypothesis. Hearing something different in your community? Email or Tweet us (@thefundneo) the theory (and evidence, if you have it!).
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