Job openings are at a record high, and most companies are trying to hire, but they can’t find enough workers, even though millions of people are still unemployed. Why aren’t these people looking for work? When do they plan to find a job?
Read: Job openings hit record 9.2 million, but workers aren’t easy to find
The labor-research firm Indeed Hiring Lab recently polled 5,000 jobseekers as part of the largest U.S. study to date on why people are still hesitant to return to work. We spoke with Nick Bunker, director of research at the lab, launched in 2014 by the jobs-listing company Indeed (acquired in 2016 by Microsoft
), about the study.
The No. 1 answer by far: fear of the virus. See survey.
MarketWatch: How big a factor do extra jobless benefits play in the decision by unemployed workers not to look for a job right away?
Nick Bunker: Many unemployed workers did list an ability to get by on unemployment insurance [UI] payments as a reason they weren’t searching urgently, but the share wasn’t as high as other reasons.
We’ve also seen that job-seeker activity on [the job-listings site] Indeed hasn’t largely or consistently picked up in states that have retracted or announced the retraction of the enhanced benefits. UI seems to be just one of many reasons for a lack of job-search intensity.
Read: This is the No. 1 reason unemployed Americans aren’t looking for work
MarketWatch: Is this proof to those who claim extra jobless benefits are a big reason people aren’t looking for work?
Bunker: The enhanced benefits are one reason among many for why many job seekers don’t feel a sense of urgency right now. Some unemployed people might be looking more urgently for work if they didn’t have access to these benefits, but overall job search doesn’t seem like it would come roaring back if the benefits were taken away and nothing else changed.
Read: There’s plenty of jobs, but not enough people to fill them. How come?
MarketWatch: More than 40% of the unemployed who aren’t looking urgently for work either said they could rely on extra savings or a spouse’s income to get by for now. What does that tell you?
Bunker: Some job seekers seem to be able to be more patient with their job search. These other sources of income mean they don’t feel the need to jump right into a job.
MarketWatch: What is it going to take for most of the people who were working before the pandemic to return to the labor force?
Bunker: A whole host of things will have to happen. Demand for workers is very strong right now, but we’ll need to see it stay strong for quite some time for a quick return to pre-pandemic levels of employment.
We’ll also need to see some temporary supply constraints ease with more schools returning to in-person teaching and, hopefully, a continued easing of the pandemic.
Read: Fewer and fewer people are working full-time from home
That being said, we might not be able to fully return to pre-pandemic levels due to the aging of the population. But we can recover a very large portion of the decline.
MarketWatch: Is it financially realistic for most businesses to “pay workers more,” as President Biden recently suggested?
Bunker: The trends in wage growth suggest that many firms are finding increases in pay not only possible but necessary. Some employers are raising base pay, especially in many of the industries directly hit by the pandemic. Hiring incentives are also increasingly a popular way to attract job seekers, with the share of Indeed job postings advertising them doubling over the past year.
Read: I’ve set pay policies at big companies — here are 3 secrets to getting a raise
MarketWatch: The economy would likely have about 9 million more jobs right now if there had been no pandemic. How long do you think it will take to create them?
Bunker: Let’s assume jobs continue to grow at the average rate of the past three months, which is 567,000 jobs a month. At that rate, we’d get back to where we would have been absent the pandemic by the middle of 2023.
If payrolls accelerate in the months ahead, we could hit that milestone more quickly. The ingredients for a pickup seem to be there. We just have to wait a few months to see if that comes to fruition.