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“Hiring now” signs fill windows down main streets, lawns in front of companies and website home pages. Where are the workers? As the COVID-19 restrictions mellow and opportunities for work resume, there is still a struggle to fill the demand for labor. Here are five things to know about the labor shortage: 

1. What is a labor shortage? 

According to the March 1999 monthly Bureau of Labor Statistics labor review, “shortages occur in a market economy when the demand for workers for a particular occupation is greater than the supply of workers who are qualified, available and willing to do that job. Jobs remain vacant as employers seek to hire more workers than are willing to work at the prevailing wage or salary.”

2. What does employment look like in the state?

The Department of Workforce Development released the U.S. Bureau of Labor Statistics preliminary employment estimates for the month of August 2021. It showed that Wisconsin's unemployment rate remained at 3.9% while the state's labor force participation rate increased 0.1% since July.

"Wisconsin's unemployment rate held at 3.9% in August and our total labor force increased by 5,500 individuals showing that more people are confident and eager to get back to work," said Workforce Development Secretary-designee Amy Pechacek in the release. "In order to keep Wisconsin's economy moving forward, we must get serious about combating the delta variant as COVID-19 continues to cause ripples in job markets due to many factors including supply chain issues and consumer confidence in eating out or traveling, which directly affects the service providing sector.

3. What is deterring people from going back to work?

There has to be something, right? New York Times reporter Lauren Jackson wrote an article, “Why Aren’t People Going Back to Their Jobs?” published in August, reporting that people are sick of and with the virus. 

Like many of us, the American labor market is “sick with the virus,” with companies complaining about a shortage of workers that is slowing the country’s economic recovery. The employers we spoke to… said that generous unemployment benefits, which have incentivized workers to stay home, are to blame (a sentiment echoed by Republican lawmakers). 

But the reality is more complicated. While many states are halting federal unemployment benefits, employees still aren’t rushing back to work. Many experts have proposed solutions: They say increasing wages (which many companies have), ensuring workplaces are safe and building more flexible scheduling options will re-engage workers.

But that doesn’t cover it all. Ultimately, the story reported that the hesitancy to go back to work runs much deeper than the quick fix available through wages but boils down to a fundamental need for change in workforce culture. 

The Washington Post published a story, “It’s not a ‘labor shortage.’ It’s a great reassessment of work in America.” by Heather Long in May. 

“Hiring was much weaker than expected in April,” Long wrote. “Wall Street thinks it’s a blip, but there could be much deeper rethinking of what jobs are needed and what workers want to do on a daily basis.”

The link between many of these stories and reports is that, really, we don’t know what’s causing the shortage. What we do know is that job opportunities outweigh the current unemployment rate.

4. What are the current unemployment benefits?

Speculation on the influence of pandemic unemployment benefits have been circulating. Again, there just doesn’t seem to be the research to say one way or the other. 

Federal Pandemic Unemployment Compensation 

Federal Pandemic Unemployment Compensation was an additional payment to individuals who were collecting benefits from any of the following programs: 

  • Regular unemployment insurance including unemployment compensation for federal employees or unemployment compensation for ex-service members.

  • Extended benefits 

The last payable week of the Federal Pandemic Unemployment Compensation was Sept. 4.

Pandemic Unemployment Assistance

“Pandemic Unemployment Assistance is a temporary federal program that provides up to 79 weeks of unemployment benefits to individuals who are not eligible for regular unemployment insurance (UI) such as individuals who are self-employed, certain independent contractors, individuals with limited recent work history or other workers not covered by regular unemployment insurance,” states the Wisconsin Department of Workforce Development. The deadline to apply for Pandemic Unemployment Assistance was Oct. 6

Pandemic Emergency Unemployment Compensation

The Wisconsin Department of Workforce Development states that “Pandemic Emergency Unemployment Compensation is a temporary program that provides up to 53 additional weeks of payments to individuals who have exhausted their regular unemployment insurance benefits.” The deadline to apply for Pandemic Emergency Unemployment Compensation was Sept. 4. 

More information on Wisconsin pandemic unemployment programs, visit the Wisconsin DWD website.

5. What’s next?

According to the National Council on Compensation Insurance, here’s what we may be looking towards at the tail end of 2021 and the beginning of 2022: 

Wage increases returning to normal

“Wage increases will likely start to normalize later in the year as more workers return to the labor force, especially women who were more likely to have left the labor force for family reasons. This should ease upward pressure on wages, as will the expiration of extended unemployment benefits in the first week of September.”

Labor force participation unlikely to return to pre-pandemic levels

“Labor force participation is unlikely to climb all the way back to pre-pandemic levels by year-end, in part because we do not expect many early retirements to be reversed.”

There will be a new normal

“The new, post-COVID-19 employment equilibrium will not be the same as the one we left behind in early 2020, as some returning workers moving across sectors and some older workers choosing not to return are likely to change the demographics of the labor force beyond this year.”

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