According to the federal Job Openings and Labor Turnover Summary, the number of job openings in August fell short of the record highs set in recent months, but a record 4.3 million workers walked off the job.
Job openings fell from a record 10.9 million to 10.4 million, an unexpected drop that experts attribute to contractions in commercial activity caused by the coronavirus’s delta variant, falling economic expectations, companies taking late-summer hiring pauses, statistical noise, or some combination of the above.
“If we look across broad cross-sections of economic metrics, we know there’s been some moderation recently” in forecasters’ expectations, according to Mark Hamrick, Bankrate’s chief financial analyst. The International Monetary Fund cut its GDP growth forecast for the United States this year by a percentage point, lowering it from 7% to 6% on Tuesday.
“The economy continues to have a lot of remarkable crosscurrents,” Hamrick said. “It stands to reason that there would be a cost in terms of employment.”
However, with over 10 million job openings, it is clear that more workers are looking for greener pastures. The rate of people quitting their jobs reached a new high of 2.9 percent, with increases in people leaving hotel, dining, and wholesale trade jobs leading the way.
She speculated that some of the migration could be driven by a continuing desire to avoid jobs that require a lot of in-person contact. “It’s fascinating to see how common these record quits are. People may be leaving these on-site sectors for more remote-friendly sectors, which could be part of what’s going on here,” she stated.
Job openings fell the most in two industries: health care and social assistance, and lodging and food services — both of which were seismically affected by the pandemic’s long duration.
Experts warn that the labor shortage is putting a strain on the ability of small businesses to thrive and, in some cases, even to survive. According to the small-business networking platform Alignable, one-third of restaurant owners polled expressed doubt that they would be able to make it through the holidays without going out of business. According to Alignable co-founder and CEO Eric Groves, a key factor is the inability to hire, and he warns that other types of businesses that rely heavily on labor to generate revenue, such as personal services and transportation, face similar risks.
“Wherever labor is a critical component to revenue, it’s a challenge,” he said, citing anecdotal reports of mom-and-pop restaurants and stores that have closed for the majority of the week. “The problem is that when you’re short-staffed, you have to give your employees a break so you can provide the level of service you want.”
Groves stated that businesses of all sizes have had to raise pay in order to compete with rising costs for supplies, ingredients, and other raw materials, but that many have struggled to find workers at all.
According to a new survey conducted by the National Federation of Independent Business, or NFIB, a record 51 percent of small businesses are unable to fill positions. “It’s incredibly difficult for those with open positions to find and attract applicants,” said Holly Wade, executive director of the NFIB Research Center.
“Many of them aren’t getting any applications — there aren’t any résumés coming in right now,” she said, despite the fact that a record 42 percent of small businesses have increased pay and 30 percent plan to do so in the next three months. According to Wade, high turnover in the current workforce exacerbates the problem. The scarcity is weighing heavily on the future prospects of business owners: According to the NFIB survey, small-business optimism has declined while owner uncertainty has increased. According to the survey, this has an impact on growth plans such as capital investment.
Despite the reduction in job openings, the labor shortage, according to Wade, remains a cloud over the economy’s recovery. “I don’t see this issue going away anytime soon,” she said. “Small-business owners should expect to deal with this well into 2022.”