Don’t Blame Covid for the Worker Shortage

Wall Street Journal (01/27/23) Lahart, Justin

The Covid crisis roiled the U.S. job market, but jobs came roaring back, although not all workers did. Economists now are warning about a recession, but America still seems short of workers. At the end of November, the U.S. Department of Labor recorded 1.7 unfilled jobs for each person counted as unemployed. The highest the ratio got in the 20 years of available data before the pandemic was 1.2. The shift could leave businesses continuing to struggle to find workers in the years ahead, and ultimately slow the pace at which the economy can grow without overheating.

Researchers from the University of Texas and the U.S. Federal Reserve Bank of Chicago argue that such calculations ignore the fact that labor-force participation has been in a long downward trend since around 2000. One important factor behind the trend lower in labor force participation is that more baby boomers are entering retirement age. There has also been a decline in participation among younger men with less education.

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