Chamber of Commerce warns of worsening worker shortage: 'A national economic crisis'

A worker shortage plaguing businesses has continued to worsen in recent months, posing a new threat to the economy's tepid recovery from the coronavirus pandemic, according to a new report published Tuesday by the U.S. Chamber of Commerce.

The chamber found the U.S. had a record 8.1 million vacant job openings in March, the last month for which data is available – an increase of 600,000 from February. But there are only half as many available workers for each open job – roughly 1.4 available workers per opening – as there has been on average over the past 20 years. 

"The worker shortage is real — and it’s getting worse by the day," Chamber of Commerce President and CEO Suzanne Clark said in a statement.

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In some industries, such as education and health services, as well as professional and business services, there are actually fewer available workers than the total number of available jobs.

"More than 90 percent of state and local chambers of commerce say worker shortages are holding back their economies, and more than 90 percent of industry association economists say employers in their sectors are struggling to find qualified workers for open jobs," the report said.  

In fact, 90% of respondents said that a "lack of available workers" is the main factor hindering economic growth in their area. Two-thirds reported that it was "very difficult" for employers in their community or state to hire workers. Respondents were twice as likely to blame the worker shortage for stunting economic growth than COVID-19.

The findings in the "America Works Report" show that the shortage is more acute in some states than others. South Dakota, Nebraska and Vermont are struggling to fill jobs because there are not enough workers to fill the positions, the Chamber said. 

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The Chamber's analysis come in light of the Labor Department's April payroll report, which revealed the economy added just 266,000 jobs last month – sharply missing the 1 million forecast by Refinitiv economists. GOP lawmakers were quick to blame the extra unemployment aid for the lackluster job growth, although experts have also cited a lack of child care and fears of contracting COVID-19 for the hiring shortage. 

At least 24 Republican states decided this month to opt out of the federal unemployment program that provided out-of-work Americans with an extra $300 a week, on top of their regular state benefits, amid concerns it was disincentivizing Americans to work. The supplemental benefit is not slated to expire until Sept. 6, 2021.

Job search activity rose by 5% the day each state announced its plan to cut off the sweetened aid, according to Indeed data. A broad range of sectors saw search activity climb, but the increase was largest for marketing, sales and hospitality and tourism jobs. 

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Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wyoming are moving to drastically reduce unemployment benefits sometime over the summer. 

At least four GOP-led states – Arizona, Montana, New Hampshire and Oklahoma – will give workers up to $2,000 when they accept a new job. 

Roughly 4 million people will lose their jobless aid as a result of the new policies, according to one estimate from the left-leaning Century Foundation.