Key Takeaways:

• Despite filling more than 650,000 jobs in August, the number of open positions remains high;
• Women lead men by an almost 2-to-1 ratio in leaving the work force;
• Three categories — Professional & Business Services, Health & Social Services and Hotels & Restaurants — account for 46% of all excess job availabilities today.

By Manuel Gutierrez, Consulting Economist to NKBA

Some 659,000 jobs were filled in August, but the number of openings still remains at an elevated 10.44 million. (Figure 1).

Businesses of all sizes across many industries are still plagued by an inability to fill vacant positions. Although this is an ideal situation for unemployed people seeking a job, businesses face the unprecedented problem of scrambling to bring them aboard.

One reason for the abundant job openings is that many individuals had greater income with government unemployment supplements than they were earning, particularly in minimum-wage jobs. Those bonus benefits have ended at the federal level and in most states, so going forward, the expectation is for more people to return to the workforce.

Figure 2 shows the divergence between those who are unemployed and jobs that are available since 2010. At the beginning of the period, there were about 15 million unemployed people and approximately 2 million openings. By 2018, as the economy strengthened, the two numbers became equal.

The improving situation came to an abrupt halt, however, and was dramatically reversed with the advent of COVID-19 and the lockdown measures and restrictions on businesses imposed by the government.

Over the last year-and-a-half (Figure 2), the number of unemployed persons has fallen, and there was a return to the previous situation where there were more jobs than unemployed.

Many of the unemployed have taken jobs working in the again-expanding economy. Total employment has increased by 5.69 million over the last 12 months, absorbing many of those unemployed as well as new people entering the job market for the first time.

But the puzzle remains as to why so many persons have left the labor force altogether since the onset of the pandemic — often referred to as the Great Resignation. Today there are 3.1 million fewer people active in the labor force, which includes those who are working and those who are seeking a job, than there were in February 2020. A bump of retirees is not an explanation, since only 366,000 of the 3.1 million drop in the labor force are those over age 65.

There are over 3 million fewer people in the active work force today than there were in February 2020.

Of those who left the labor force, 1.1 million are men and 1.98 million women. Anecdotal evidence suggests that many of the women remain the primary caregiver for their children and cannot rejoin the work force because they are unable to find adequate child-care while they work.

It is always interesting to see which industries and sectors have most job openings (Figure 3). Availabilities as a percentage of total opening are in the left panel, and the change in openings over the previous month can be seen in the right panel.

Professional and BusinessServices accounts for most openings. At 17%, nearly one in six jobs available falls within this industry. However, that sector covers a disparate number of job types. They range from higher-paying positions such as lawyers, architects, engineers or accountants, to lower-paying administrative or assistant jobs at firms like legal, architectural or accounting. Interior Design Services, such as those performed by many NKBA members, fall within the Professional Services group as well.

The next two sectors with the most openings are in Health & Social Services and Hotels & Restaurants, at 15% and 14%, respectively. Those two sectors were most affected during the economic shutdown, so it’s not surprising they represent such a high number of availabilities. Combined, the top three categories represent a 46% share of all available jobs in August.

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