September 26, 2021
by Steve Stofka
As I am out and about I’ve noticed the Help Wanted signs posted in storefront windows. $15 per hour reads the sign at the gas station near me. Why were there so many of these signs, I wondered? The latest Job Openings report reported a 50% increase in job openings, accounting for about 2.5 million jobs. I dusted off my Sherlock Holmes hat, found my magnifying glass and set out to look for the missing workers.
In the latest employment report from the Bureau of Labor Statistics (BLS) there are 6.3 million fewer people working today than in February 2020, just before the first alarming reports of Covid hospitalizations and deaths in New York City. Digging through many series of labor data, the missing workers are spread throughout the population. What was most surprising to me were those segments of the population where workers are not missing.
After the Great Financial Crisis, employment among workers older than 65 surged, almost doubling to 11 million strong by 2020, when the pandemic struck. 1 out of every 12 workers was over 65. For the past decade, economists have identified several reasons for the surge – people lost homes or had their savings significantly lowered. The Boomers didn’t save enough during their working years. Active Boomers did not want to retire. Employers preferred older workers with more reliable work habits than younger workers.
Before the pandemic, 1 out of 4 older people were working. The number of people in this age group has grown by 2 million during the pandemic. If that employment trend had continued, we would expect that 1/2 million workers continued to work. Instead, the number of older workers fell by 600,000. Many older workers who staffed jobs at retail establishments decided to forgo the risk of getting sick. Almost a million workers near retirement, those aged 55 and above, have taken early retirement or simply not returned to work out of fear of getting sick. So far that has accounted for more than two million workers, leaving 4 million unaccounted for.
The next place I went to look was younger workers who would no doubt be playing video games and enjoying the sweet life. According to recent BLS and Census Bureau surveys, however, the number of workers aged 16-24 is about the same now as it was before the pandemic. Workers aged 16-19 have actually increased by 200,000.
That left only the core work force aged 25-54. Before the pandemic, 4 out of 5 people in this age group were working. In April 2020, it fell to 70% but has recovered to 78%, the same as in October 2016, on the eve of the 2016 election. I don’t remember seeing a lot of Help Wanted signs then. Because the core work force makes up 2/3rds of the 150 million employed, a few percentage points adds up to a lot of workers. Before the pandemic there were about 101 million workers in this age group. Today that number is 98 million, a decline of 3 million workers.
Adding in some known reporting errors and seasonal adjustments account for the bulk of the missing workers but there are some curious anomalies. The number of people who report that they are working part-time because they couldn’t find full-time work is about the same level as it was before the pandemic. Yet many fast food establishments have Help Wanted signs for full and part-time workers. I am guessing that many applicants would prefer not to have jobs in customer service where they are constantly exposed to people on a face-to-face basis.
I sometimes hear that young people don’t want jobs, that they are sitting at home playing video games and collecting extended unemployment benefits. Misinformation and unsubstantiated opinion never take a day off.