There’s Increasing Evidence The Lack Of Qualified Workers Is Constraining Job Growth
The U.S. unemployment rate fell to 3.8 percent in May 2018 and is now at its lowest level in more than two decades. The rate is so low that Moody’s Analytics’ Chief Economist Mark Zandi believes that a countrywide labor shortage might be constraining job growth. Zandi noted there are a record number of positions are unfilled in manufacturing, transportation, healthcare, financial services, leisure and hospitality businesses.
The Federal Reserve also recently discussed the manufacturing labor shortage. Noting that the trucking industry has faced a worker deficit for the past couple of years, FreightWavesChief Economist Ibrahiim Bayaan explained the Fed found:
“Labor conditions were tight across almost all districts, with reports of shortages of several skilled professionals, including carpenters, electricians, sales personnel, and IT professionals. Businesses in several districts reported having to increase wages in response to these shortages, but overall wage inflation remained relatively modest across the economy. The lack of availability of skilled labor is likely to remain an issue in the economy going forward, as unemployment remains near historical lows. Despite robust demand, businesses are likely to be constrained by the fact that they cannot find the workers, and the challenges that the trucking industry has dealt with for the past year are likely to confront the rest of the economy.”
If businesses cannot find enough workers, they will not be able to grow or expand, and corresponding wage inflation will raise prices for consumers. Small businesses are especially impacted by labor shortages and, according to the National Federation of Independent Business (NFIB), 83 percent of small businesses report there are few or no qualified applicants for the positions they were trying to fill. Additionally, 23 percent of owners said the problems they’re having finding qualified workers as their single biggest challenge. That reading is the highest for the NFIB since 2000.