Worker shortage 'biggest issue' facing US economy this summer, Chamber of Commerce warns

A worker shortage plaguing businesses across the country poses the biggest threat to the economy's still-nascent recovery from the coronavirus pandemic, according to a new report published Tuesday by the U.S. Chamber of Commerce.

The Labor Department reported this week that the U.S. had a little more than 9.2 million vacant job openings in May, a record-shattering number despite the 9.3 million unemployed Americans. For comparison's sake, before the pandemic shut down broad swaths of the nation's economy, there were roughly 7 million available jobs.

The Chamber estimated there are about 1.2 available workers per job opening; before the crisis, the ratio was hovering around 1.

Although the ratios are close in range, there are key differences between now and before the pandemic: Previously, the major issue was that available workers didn't necessarily have the skills to fill those openings; now, however, there are other factors at play.

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"While some skills mismatches remain, the major problem is that the available workers are reluctant to go back to work, whether because of lingering COVID-19 concerns, childcare issues, or generous government benefits," Chamber economist Curtis Dubay wrote in a blog post.

The Chamber's analysis come in light of the Labor Department's June payroll report, which revealed the economy added just 855,000 jobs last month, topping the 700,000 predicted by Refinitiv economists.

While it marked a major uptick from May and April – the economy added a combined 852,000 positions, raising concerns among some GOP lawmakers and other critics that out-of-work Americans were choosing to stay home and collect unemployment benefits rather than return to the workforce – the Chamber warned that the labor market has not changed much since late May.

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"There are still far too many job openings and if available workers do not fill them it could stifle what should be a booming economy the rest of the year," the trade association wrote. 

In response to the April jobs report, 26 states, nearly all of them led by Republican governors, announced plans to prematurely end one of three pandemic relief programs that provided an extra $300 a week in aid and extended benefits to contract workers and individuals who had exhausted state aid. 

At least four states have announced plans to provide low-income workers with a financial incentive to return to work. 

The Chamber lauded the move, citing polling from June that found unemployed Americans are seeking some type of financial bonus before returning to work.  Nearly 4 in 10 respondents who lost their jobs during the pandemic said a $1,000 hiring bonus would make them more likely to return to work full-time.

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The percentage was particularly high among younger workers between the ages of 25 and 34 (53%) and those with some college education but not a degree (49%).