Shortages of workers in education, healthcare and railway jobs are fueling labor crises
Exhausted workers in education, healthcare and the rail industry are pulling back after months of understaffing
While the railroad dispute, which the White House helped resolve early Thursday, has garnered most attention, a number of other strikes are spreading across the United States. About 15,000 nurses walked off the job in Minnesota this week, and health workers in Michigan and Oregon recently authorized strikes. Seattle teachers called off a week-long strike, delaying the start of the school year.
At the center of each of these challenges is widespread labor shortages that have caused worsening working conditions. Staffing shortages in key industries, such as healthcare, hospitality and education, have put unprecedented pressure on millions of workers, set in motion a wave of labor disputes as well as new measures to organize nationwide.
Too many industries are still struggling to find labour. The percentage of working-age Americans who have a job or are looking for one is at 62.4 percent, a full percentage point lower than it was in February 2020, according to data from the Department of Labor.
The reasons are complex and broad. Early retirement, a massive decline in immigration that began under the Trump administration, as well as ongoing child care and elder care challenges combined with covid-related illnesses and deaths have all cut into the pool of available workers.
“We have about 2.5 million fewer people in the workforce than we were on track to have with pre-pandemic trends,” said Wendy Edelberg, director of the Hamilton Project at the Brookings Institution. “That’s a big number, and it means that the people who are still there, who are still working these jobs, have to do even more.”
The stress of working at a job that is understaffed plays a large role in workers’ demands, which often revolve around staffing – or the lack of it. Teachers in Seattle wanted better relationships between teacher and student in special education. Railway conductors and engineers called for sick leave. And the nurses who quit in Minnesota said they are looking for more flexible schedules and protections against retaliation for reporting cases of understaffing.
“If you look at sectors like nursing homes, local schools, railroads — employment has dropped like a rock,” said Lisa Lynch, an economics professor at Brandeis University and former chief economist at the Department of Labor. “And with that you see a marked increase in industrial action and strike activity. People are tired and overworked.”
Although the US economy has officially recovered the 20 million jobs it lost at the start of the pandemic, the gains have been uneven. Large shortages remain, particularly in low-wage industries that have lost workers to higher-paying opportunities in warehousing, construction, and professional and business services. The hospitality and leisure industry is still down 1.2 million jobs as of February 2020. Public schools are short nearly 360,000 workers and health care has yet to restore 37,000 positions. Rail transport has meanwhile been reduced by 12,500 jobs.
After months of juggling extra duties, Sabrina Montijo quit her $19-an-hour teaching assistant job in the Bay Area in August. She now cares for her two young children full-time and says she is not sure when she will return to the workforce.
“Ever since the pandemic started, we were incredibly short-staffed,” said Montijo, 33. “I had to work around the clock because there was no one there. We couldn’t find staff, and if we did, we were constantly having to train someone, always having to start over.”
Between the extra pressure at work and trouble finding affordable childcare, she says it just made sense to go. Getting by on just one income from her husband’s job as a butcher at Safeway hasn’t been easy, but Montijo says it’s better than the alternative.
“It got to the point where I didn’t feel like I had a choice,” she said. “I had to set up arts and crafts, do science projects, call and talk to parents — all at the same time. There’s only so much one person can do.”
Worker burnout has become a persistent problem throughout the economy, although labor economists say it is particularly pronounced in industries with acute labor shortages. Many frontline workers in retail, restaurants, education and health care who worked throughout the pandemic — often putting their health and well-being at risk — say their jobs are getting even tougher as vacancies pile up.
Although employers across the economy say they are struggling to find and retain workers, labor shortages are most pronounced in retail (where about 70 percent of vacancies remain unfilled), manufacturing (about 55 percent), and leisure and hospitality (45 percent), according to a U.S. Chamber of Commerce analysis of Labor Department data.
“When you look at the jobs that have trouble hiring, they are the ones with very long hours, inflexible schedules, not good pay and limited benefits,” said Paige Ouimet, a professor at the University of North Carolina’s Kenan-Flagler Business School, who focuses on finance and labor economics. “Operating your workers like this – asking them to do 20, 30 percent more because you’re short-staffed – it’s very much a short-term strategy. You’re going to keep losing people.”
In many cases, employers have started raising wages in the hope of attracting new workers. The highest wage gains have been in the lowest paying industries, such as hospitality, where the average hourly wage is up 8.6 per cent from a year ago. (That compares with a 5.2 percent increase for all workers.)
But while these wage increases may not go far enough to attract or retain workers, economists say they are contributing to inflation. Restaurants, airlines, healthcare companies and transportation providers are all charging more, in part, they say, because of rising labor costs.
Aveanna Healthcare, which provides home health and hospice services, is working with the Medicaid programs it works with to increase reimbursement rates to compensate for higher salaries for nurses.
“Inflation has driven our workforce to seek work that can and will pay higher wages,” Tony Strange, the company’s chief executive, said on an earnings call last month. “We will have to increase caregiver pay by an average of 15 percent to 25 percent in certain markets we serve. We will systematically review state by state and contract by contract and adjust reimbursement rates.”
New inflation data released this week showed prices remained stubbornly high, mainly due to rising costs of services including healthcare and transport. Unlike the prices of televisions and furniture, which depend heavily on the cost of materials and shipping, economists say service inflation tends to be closely tied to workers’ wages.
“It’s clear that the tight labor market leads to wage growth, which leads to price growth,” said Jason Furman, an economics professor at Harvard University. “Inflation in services tends to be much more persistent and it’s much harder to bring down. Gasoline prices are very volatile. Commodity prices are somewhat volatile. But in services, if prices are high one month, they’re likely to stay high the next month .”
It’s unclear if — or when — many of the people who left the workforce during the pandemic will return. This applies in particular to workers aged 55 and over, who have stopped working at higher rates. The labor market still lacks more than 500,000 workers from that age group.
“There has been a very significant and sustained decline in the labor force among workers over 55,” said Edelberg of the Brookings Institution. “The pandemic has been a moment of introspection and reassessment, and it’s caused many people to exit the workforce.”
Joseph White, who lives in Nashville, lost his job at Guitar Center six months into the pandemic. But he says he had had enough: the store was constantly in short supply and the customers were unaffordable. In one case, a shopper pulled a gun on him to try to enforce the company’s mask mandate.
“I’m tired, I’m broken, worn out and old,” the 62-year-old said. “I was worked to death for so long that finally, I said, there’s no way I’m coming back.”
He has begun drawing on Social Security payments to make ends meet and helps his wife run her small shop, Black Dog Beads. But White says he has no plans to rejoin the workforce.
“Our quality of life is far better even though we have less income,” he said. “I got tired of being a commodity.”
Lauren Kaori Gurley and Jeff Stein contributed to this report.
