Key Takeaways:

• Job openings have increased by 4.2 million in the past year;
• As government supplemental income programs begin winding down in September, some on the sidelines may begin actively looking again;
• Healthcare and Hotels/Restaurants represent 30% of all job availabilities;
• It is estimated that over 10% of all restaurants have permanently closed, suggesting that this sector won’t return to pre-pandemic employment levels for quite a while.

By Manuel Gutierrez, Consulting Economist to NKBA

Despite the negative economic impact and pessimistic outlook resulting from the COVID-19 Delta variant, employers continue to expand and seek to hire more workers. Amazon alone recently said that it was looking to hire 125,000 more employees in the U.S.

Total job openings in July — including private business and government positions — reached 10.9 million in July. That figure represents an increase of 750,000 over June. During the past year, the number of openings has increased by 4.2 million (Figure 1). This has led to many businesses facing a unique situation.

It has been argued that generous government programs, including unemployment supplements, have been a factor in discouraging some from seeking employment, thus contributing to the severe shortage of workers. These supplements impacted an estimated 7.4 million people.

The number of job openings has increased by 4.2 million in the past year, including 750,000 just in the last month.

But with these programs winding down in early September, job figures going forward might paint a different picture. It remains to be seen how many individuals who weren’t so eager to reenter the workforce will actively seek employment, now that subsidies are ending.

One factor is geographic compatibility between job and job seeker, although since remote work has become much more widespread, this may be less of an issue for certain types of jobs. A second factor of great import is the potential mismatch between skills needed by employers and skills that the potential employee possesses.

Looking at sheer numbers, there are currently 2.2 million more jobs available than the total number unemployed. This is far different from a year ago, when there were 9.6 million more unemployed than jobs available.

What kind of jobs are currently open? As in the recent past, they tend to be concentrated in areas that were most impacted by the economic shutdown. For instance, Health Care/Social services and Hotels & Restaurants jointly represent 30% of total openings.

While Health Care/Social services represents 13.6% of all workers, the segment represents 16% of the openings. Although employment in these two sectors has improved over the last few months, they are still behind pre-pandemic levels. Health Care is 3.1% lower and Social Services has a gap of 5.4%.

The differential for Hotels & Restaurants is even more pronounced. This sector represents 8.9% of all jobs, yet includes 14% of all openings. It is a significant 9.2% below pre-pandemic employment levels.

Employment within restaurants and bars accounts for more than 80% of workers in this area. Given estimates that more than 10% of all restaurants have closed permanently, it’s unrealistic to expect employment in this sector to recover anytime soon. The sector with the largest share of openings, Professional/Business services, accounts for 17% of all availabilities. This sector includes a wide range of jobs, from highly technical or skilled positions such as legal, advertising or interior design, to ones that require more general skills, such as call centers or janitorial services.

Within the K&B industry, only Construction is specifically included within this data. It represents just 3% of all job openings.