Millions are unemployed, but some companies can't fill jobs : The Indicator from Planet Money The U.S. is experiencing the worst unemployment crisis since the Great Depression. Meanwhile, some employers claim that they can't find the workers they need. What's going on?
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Jobs Friday: The Worker Shortage Mystery

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Jobs Friday: The Worker Shortage Mystery

Jobs Friday: The Worker Shortage Mystery

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UNIDENTIFIED PERSON, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

STACEY VANEK SMITH, HOST:

This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith.

CARDIFF GARCIA, HOST:

And I'm Cardiff Garcia. And today is Jobs Friday, which means air horn time.

(SOUNDBITE OF AIR HORNS BLARING)

VANEK SMITH: It's Jobs Friday.

GARCIA: Yes, it is. We've got the unemployment numbers for September. They just came out.

VANEK SMITH: More than 660,000 people were hired in September. The unemployment rate fell to 7.9%.

GARCIA: The U.S. has now added back just over 11 million of the 22 million jobs lost in March and April right after the pandemic started.

VANEK SMITH: Yeah, so about half. Of course, the job market is still a very long way from normal.

GARCIA: Yeah. And for this Jobs Friday, we have asked our producer, Brittany Cronin, to look into a job market mystery for us.

BRITTANY CRONIN, BYLINE: Hey, guys.

VANEK SMITH: Hey, Brittany.

GARCIA: Hey, Brittany.

VANEK SMITH: So this is a mystery that politicians and economists have been talking about a lot lately.

CRONIN: Yeah, exactly, because right now there are millions of people out of work. But at the same time, employers all over the country are saying they have jobs that they can't fill. So today on the show, we take a look at what's going on.

VANEK SMITH: It is a tough time to be looking for work. We're hearing stories all over the country of dozens and dozens of people competing for a single job opening. There just aren't a lot of open positions right now.

CRONIN: Unless you're Chad Dohlen.

CHAD DOHLEN: We have so many jobs open, you wouldn't believe it.

CRONIN: Chad is president of Midwest Staffing in Minneapolis. They help companies hire workers all over Minnesota, and Chad says he has a ton of open jobs.

DOHLEN: Let's see. So we place welders, we place machine operation people, general labor, warehouse, shipping and receiving. We have an entry level HR role, an administrative assistant role.

CRONIN: Are you reading me a list of, like, what you're currently hiring for?

DOHLEN: Yes, just some of the ones we're currently hiring for. We have hundreds and hundreds of open job orders right now.

VANEK SMITH: Meaning Chad wants to hire hundreds and hundreds of people for full-time jobs with benefits.

CRONIN: So Chad is basically the Oprah of jobs out there. Like, you get a job, you get a job, everybody gets a job.

VANEK SMITH: Except Chad says he cannot find people to take these jobs.

DOHLEN: So I have been in this industry for over 20 years. Never in my career have I experienced a situation where we literally have people to work, but they won't go back to work. I mean, we have clients who say to us, we'll take five people a week if you can find them for us. We can't find them.

CRONIN: And when it first started happening, Chad thought, I know what's going on here.

DOHLEN: What's been challenging for us are our average pay rates.

CRONIN: It's all about the Benjamins.

DOHLEN: Our average pay rates for candidates - anywhere from $14 to $18 an hour. We weren't able to pay them enough to put them back to work.

VANEK SMITH: So Chad was doing the math back in April when the government was paying out an extra $600 in unemployment as part of the CARES Act that Congress passed back in March. And what Chad found was that people could actually make more money off of their unemployment benefits than they would by taking one of his jobs. And it was not just Chad's math prowess that led him to this conclusion.

DOHLEN: I have a situation where I called a candidate up. I explained the job to them. It was - it's exactly what they've done in their past and literally laughed at me and hung up the phone.

VANEK SMITH: They laughed at him. That's crazy.

CRONIN: Chad thought as long as those extra benefits are in place, getting people to take these jobs is going to be a problem. But when that extra $600 went away at the end of July, Chad's problem didn't.

VANEK SMITH: So it was not the $600. And so Chad started thinking about other possibilities. You know, like maybe it's the location. Like, maybe there just aren't a lot of people looking for jobs in Minneapolis right now.

CRONIN: But that doesn't really seem to explain the mystery, either, because right across town from Chad, Keith Rose says he's been desperately looking for work. Keith is an audio-visual technician. He worked at a company setting up for conferences and expos. Back in March, he was furloughed for two months and then another two months and another.

KEITH ROSE: And since the pandemic started, I am over 130 applications in. I've had only eight interviews since then, and I've had no job offers.

CRONIN: So every day, Keith wakes up and checks his job alerts. He sends in resumes and meets with his career counselors. He even has a spreadsheet on his computer where he logs every single job he's applied to. He says the competition is overwhelming, and he's just not getting many calls back.

ROSE: At times it's kind of a bit of an emotional beatdown. I have just been fighting this uphill battle and constantly getting, you know, the form - thank you for your application, but you're not exactly what we're looking for at this time. We encourage you to continue to look at our career site for any further opportunities you feel you might be qualified for.

VANEK SMITH: Keith's family relies on his income. His wife is high-risk for contracting coronavirus and cannot go back to work. Keith's son just graduated from college and is living at home. He says money is getting tight, but he says that is not the only reason that he wants to go back to work.

ROSE: For me, work as having a sense of purpose. I want to be in a position where I'm making a contribution to something or to someone. That's just the way I'm hard-wired, I guess, and that's what I want to be doing. I don't do well sitting down and doing nothing.

VANEK SMITH: So on one side of town, you've got demand for labor. You've got Chad saying he has all these open jobs that he needs to fill. On the other side of town, you've got supply of labor. You've got Keith saying he desperately wants a job, and he's looking and looking, and he can't find one. And there are reports of this kind of situation happening all over the country right now. So what is going on?

HEIDI SHIERHOLZ: I get this question all the time.

CRONIN: That's Heidi Shierholz, senior economist at the Economic Policy Institute. My first question for Heidi - is there, like, some kind of worker shortage happening?

SHIERHOLZ: The answer to that is just an absolute no. Right now, there are quite literally more than 8 million more unemployed people than job openings. So there's an absolute excess of workers who need jobs - over and above job openings that are posted.

CRONIN: Heidi says if there were an actual worker shortage, we would see wages going up for jobs because when employers truly can't find workers, they start offering more money for those jobs. Pay goes up.

SHIERHOLZ: That is the hallmark of a labor shortage. And if you look at the wage data right now, we are not seeing an acceleration of wage growth right now.

VANEK SMITH: OK, so there is no labor shortage in the U.S. But what about Chad? Why is he having so much trouble finding workers? Heidi says the reason for this is because our economy just experienced a huge shock. And when a massive disruption like this happens, the system kind of melts down for a while. The country's economic engine sort of starts to seize up. Supply and demand are thrown out of balance, and things stop working.

CRONIN: Demand can't find supply, and supply can't find demand. And that is how you end up with these local stories of mismatches, even in a single city.

VANEK SMITH: Right. And it's not just this. We are seeing these economic contradictions all over the country. For instance, farmers destroying their crops because they can't sell them. Meanwhile, supermarket shelves are empty, and people can't afford food.

CRONIN: Heidi says eventually the labor market will balance itself out. The engine will start to hum again. Supply will meet demand. The Chads and Keiths of the world will find each other.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

CRONIN: This episode was produced by Jamila Huxtable and Darian Woods. It was fact-checked by Sean Saldana. Paddy Hirsch is our editor, and THE INDICATOR is a production of NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

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