Every day we hear from our member companies — of every size and industry, and in nearly every state — that they are facing unprecedented challenges trying to find enough workers to fill open positions. Right now, the latest data shows that we have 8 million job openings in the United States, but only 6.8 million unemployed workers.

We have a lot of jobs but not enough workers to fill them. If every unemployed person in the country found work, we would still have millions of open jobs.

The U.S. Chamber monitors trends in job opportunities, labor force participation, quit rates, and more to quickly understand the state of our nation’s workforce.American data center works. Read on for an analysis of the state of the workforce nationally.

Why are we in labor shortage?

At the height of the epidemic, more than 120,000 businesses temporarily closed their doors, and more than 30 million American workers were unemployed. Since then, job opportunities have steadily increased while unemployment has slowly decreased.

In 2023, employers ended up adding 3.1 million jobs. A strong job market is good news, but many of these job opportunities remain unfilled because the United States does not have enough workers to fill them. Although more Americans are participating in the labor force today than before the pandemic, the overall share of the population participating in the labor force has declined. If our labor force participation rate today were the same as it was in February 2020, we would have more than 2 million additional Americans in our workforce to help fill those open jobs.

In fact, Americans’ declining labor force participation is nothing new — the number of Americans participating in the labor force has been declining for decades, resulting in a smaller workforce that is expected to continue to shrink for years to come.

Understanding the gap

Currently, the labor force participation rate is 62.7%, down from 63.3% in February 2020 and 67.2% in January 2001. There is not just one reason why workers are turning away from work, but several factors have come together to cause the ongoing shortage. The factors detailed in the next section have contributed to the labor shortage.

Additionally, in May 2022, the U.S. Chamber Unemployed workers surveyed who lost their jobs during the pandemic to gain more knowledge about what prevents them from returning to work. Here are some key findings.

• Two-thirds (66%) of Americans who lost their full-time jobs during the pandemic say they are only somewhat or not at all active in their search for a new job.

• About half (49%) are not willing to take jobs that do not offer the opportunity to work remotely.

• More than a quarter (26%) say it will not be necessary for them to return to work again.

• Nearly one in five have changed their livelihoods, 17% have retired, 19% have become homemakers, and 14% now work part-time.

• Nearly a quarter (24%) say government aid packages during the pandemic have motivated them not to actively look for work.

• Younger participants, between the ages of 25 and 34, prioritize personal growth over job search at the moment; 36% say they focus more on acquiring new skills, education or training before returning to the workforce.

Factors contributing to labor shortages

Early retirement and the aging workforce

As of October 2021, the pandemic has led to more than… 3 million adults To early retirement. Overall, the number of adults age 55 and older who are separated from the labor force Because of retirement It increased from 48.1% in the third quarter of 2019 to 50.3% in the third quarter of 2021.

In addition, the proportion of elderly people in the US population is It is increasing steadilyThis trend is likely to continue. This shift is partly due to the fact that younger generations are having fewer children than their predecessors, resulting in an aging and gradually declining population.

Net international migration to the United States is at its lowest levels in decades

US Census Bureau data shows that net international migration to the United States only contributed to the increase in the US population by 247,000 people between 2020 and 2021. Compared to the previous decade’s high of 1,049,000 increases in our population between 2015 and 2016 due to immigration, the impact of immigration on population growth in the United States decreased by 76%.

Inability to access child care

Even before the pandemic, lack of access to high-quality, affordable child care was a problem. Research by the U.S. Chamber of Commerce Foundation found that because of breakdowns in the child care system, the states surveyed (Alaska, Arkansas, Arizona, Missouri, and Texas) missed an average estimate of $2.7 billion annually for their economies.

A a report The US Chamber of Commerce Foundation and Education Fund show that the pandemic has created a vicious cycle for the industry; To return to work, workers need reliable child care, but providers themselves face enormous challenges. The pandemic forced many child care providers to close their doors or reduce their numbers: between February and April 2020, Industry lost 370,600 jobs, 95% of which are held by women. Unfortunately, the recovery was not quick; Through late September 2021, hiring in the child care industry It remained 10 percent lower from pre-pandemic levels.

In addition,Women participatein the labor force at the lowest rates since they entered the labor force in large numbers in the 1970s. In the spring of 2020,3.5 million mothers left their jobsThis raised the participation rate of working mothers in the labor force from about 70% to 55%.

Although there are more women working now than in February 2020, the women’s labor force participation rate has not yet fully recovered to the pre-pandemic rate or when it was at an all-time high of 60.2% in early 2001.

In the Chamber’s survey of unemployed workers who lost their jobs during the pandemic, 27% indicated that the need to stay home and care for children or other family members made returning to work difficult or impossible.

A new job begins

In the spirit of entrepreneurship, some employees left work or remained unemployed to open their own businesses. In 2023, 5.5 million new businesses were created, continuing the trend of record numbers of new business applications filed over the past several years. 884,981 new business applications have already been filed in 2024.

Workers of all ages, but primarily younger generations, have also benefited from a new source of income in large numbers – digital commerce. In 2020, 2 million individuals Make six figures or more on social media. The cultural shift brought about by the digital age is spreading across the labor market, presenting new employee attraction challenges that employers must now address.

Increase in savings

Enhanced unemployment benefits, stimulus checks, and the inability to go out and spend money during the COVID-19 pandemic have all contributed to Americans collectively… 4 trillion dollars To their savings accounts since early 2020. A few hundred extra dollars a week from enhanced unemployment benefits (which expired in September 2021), specifically, 68% of claimants earn more On unemployment from what they did while working.

In the Chamber’s survey, 23% of women indicated that other family members make enough money and said full-time work is not as important as a reason they are not returning to the workforce. Rising income and savings have enhanced people’s economic stability, allowing them to continue to move away from the labor force. However, rising inflation leads to a decline in savings accounts, necessitating the return of many to the labor market.

The big adjustment

The “big quit” made its way into our vocabulary when the shift in our workforce began to become evident — and it became a hashtag. #quitok It even went viral when social media users posted about quitting their jobs in search of more free time or better opportunities.

However, the story is more complex than people leaving their jobs. In fact, the most appropriate moniker for the high smoking cessation rates over the past few years is “The Great Adjustment.” More than 44 million Americans will leave their jobs in 2023, and 3.4 million resigned in January 2024 alone. However, the hiring rate has outpaced the quitting rate since November 2020. This means that Americans are looking for — and finding — better opportunities with new employers and in new professions and industries.

These reasons above help shed light on the current labor shortage landscape, but the examples are not exhaustive.

Understanding why workers disappear from job vacancies is only half the equation. The next step in addressing the labor shortage is to implement solutions to attract and retain new workers.

Learn how the U.S. Chamber is driving solutions America’s Initiative Works. For more information about the America Works Initiative, contact Stephanie Ferguson at sferguson@uschamber.com.

About the authors

Stephanie Ferguson Millhorn

Stephanie Ferguson Melhorn is Senior Director of the Department of International Workforce and Labor Policy. Her work on labor shortages has been cited in the Wall Street Journal, The Washington Post, and the Associated Press.

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