Exhausted workers in education, health care and the railway industry are falling behind after months of staff shortages
While the railroad row, which is the White House Help solve it Early Thursday, it got the most attention, and a number of other hits are spreading across the United States. About 15,000 nurses pulled out of work in Minnesota this week, and health care workers in Michigan and Oregon recently authorized strikes. Seattle teachers called off a week-long strike, which delayed the start of the school year.
At the heart of each of these challenges is a widespread labor shortage that has led to deteriorating working conditions. Staff shortages in key industries, such as healthcare, hospitality and education, have put unprecedented pressures on millions of workers, Sparking a wave of labor disputes as well as new efforts to organize nationwide.
Many industries are still struggling to find workers. According to Labor Department data, the proportion of working-age Americans who have a job or are looking for a job is 62.4 percent, a full percentage point lower than it was in February 2020.
The reasons are complex and broad. Early retirement, the massive slowdown in immigration that began during the Trump administration, as well as ongoing childcare and aged care challenges combined with coronavirus-related illnesses and deaths, have all reduced the number of workers available.
“We have approximately 2.5 million fewer people in the workforce than we were on track with pre-pandemic trends,” said Wendy Edelberg, Hamilton Project Director at the Brookings Institution. “That’s a big number, and it means that the people who are still out there, who are still working in these jobs, they have to do more.”
The stress of working in an understaffed job plays a large role in workers’ demands, which often revolve around hiring — or understaffing. Seattle teachers wanted to match a teacher to a better special education student. Railway employees and engineers were asking for sick leave. Nurses who have been laid off in Minnesota said they are looking for more flexible schedules and retaliation protections for reporting staff shortages.
“If you look at sectors like nursing homes, local schools, railroads — employment has gone down like a stone,” said Lisa Lynch, professor of economics at Brandeis University and former chief economist at the Department of Labor. With this, you see a noticeable increase in work and strike activity. People are tired and exhausted.”
Although the US economy has officially regained the 20 million jobs it lost at the start of the pandemic, the gains have been mixed. Significant shortcomings remain, particularly in lower-wage industries that have lost workers to higher-paid opportunities in warehousing, construction, professional and business services. The hospitality and leisure sector is still down by 1.2 million jobs since February 2020. Public schools are missing nearly 360,000 workers and healthcare has yet to restore 37,000 jobs. Meanwhile, rail transport decreased by 12,500 jobs.
After months of doing extra duties, Sabrina Montejo quit her job as a $19-an-hour teacher’s aide in the Bay Area in August. She is now looking after her two young children full time and says she is not sure when she will return to the job market.
“Since the pandemic started, we’ve had an incredibly understaffing,” said Montijo, 33. “I had to work around the clock because there was no one around. We couldn’t find employees and if we did, we constantly had to train someone, and we always had to start over.”
Between the extra stress at work and the difficulty of finding affordable child care, she says it makes sense to leave. Managing just one income from her husband’s job as a butcher in Safeway wasn’t easy, but Montejo says it’s better than the alternative.
“I 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, make phone calls and talk to parents – all at the same time. There is so much one person can do.”
Worker fatigue has become a persistent problem throughout the economy, although labor economists say it is particularly pronounced in industries experiencing severe labor shortages. Many of the frontline workers in retail, restaurants, education and health care who have worked throughout the pandemic — often putting their health and well-being at risk — say their jobs are becoming more difficult as job 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 70 percent of jobs are still vacant), manufacturing (about 55 percent), and entertainment and hospitality (45 percent), according to American Chamber of Commerce Analysis From the data of the Ministry of Labor.
“When you look at the jobs that have a hard time hiring, they are the ones with really long hours, inflexible schedules, big pay and limited benefits,” said Paige Oymet, a professor at the University of North Carolina’s Kenan Flagler School of Business. Focuses on the economics of finance and labor. “Running your workers this way — asking them to do more than 20, 30 percent because you have few workers — it’s pretty much a short-term strategy. You will continue to lose people.”
In many cases, employers began raising wages in hopes of attracting new workers. The highest wage gains were in lower-wage industries, such as hospitality, where average hourly earnings are an increase of 8.6 percent from a year ago. (This is compared to an increase of 5.2 percent for all workers.)
But while these wage increases may not be enough to attract or retain workers, economists say they contribute to inflation. They also say restaurants, airlines, health care companies and transportation providers are charging more, in part, because of higher labor costs.
Aveanna Healthcare, which provides home health care and services for the elderly, is partnering with the Medicaid programs it works with to increase reimbursement rates to offset the higher wages for nurses.
“Inflation has driven our workforce to seek work that can, and will, pay higher wages,” the company’s CEO, Tony Strange, said in an earnings call last month. “We need to increase caregiver wages on average from 15 percent to 25 percent in some of the markets we serve. We will go systematically through state by state and contract by contract and we will adjust reimbursement rates.”
New inflation data released this week shows that prices have remained stubbornly high, due in large part to rising costs of services including health care and transportation. Unlike prices for TVs and furniture, which depend largely on the cost of materials and freight, economists say service inflation tends to correlate more closely with workers’ wages.
“Obviously, a tight labor market leads to wage growth, which leads to price growth,” said Jason Furman, professor of economics at Harvard University. Inflation in services tends to be more constant and much more difficult to bring down. Gasoline prices are very volatile. Commodity prices are somewhat volatile. But in services, if prices are high for one month, they are likely to remain high next month.”
It’s unclear if – or when – many people who left the workforce during the pandemic will return. This is especially true for workers 55 and older, who are out of work at higher rates. The labor market is still short of more than 500,000 workers of that age group.
“There has been a significant and persistent decline in labor force participation among workers over the age of 55,” said Edelberg of the Brookings Institution. “The pandemic has been a moment of introspection and reassessment, and it has led a lot of people out of the workforce.”
Joseph White, who lives in Nashville, lost his job at the Guitar Center six months after the pandemic. But he says he’s had enough: The store was constantly understaffed and customers were stubborn. In one instance, a shopper pulled a gun toward him for trying to enforce the company’s mask mandate.
“I’m tired, exhausted, exhausted and old,” said the 62-year-old. “I worked to death for so long that at last, I said, there’s no way I’m going back.”
He began drawing Social Security payments to make ends meet, and he helps his wife run her small shop, Black Dog Beads. But White says he has no intention of joining the workforce again.
“Our quality of life is much better despite the lower income,” he said. “I’m tired of being a commodity.”
Lauren Kaori Gurley and Jeff Stein contributed to this report.