We’ve all experienced it. Empty store shelves, half-empty restaurants yet still needing to wait for a table, or a Starbucks unexpectedly closed with a sign on the door saying “Sorry! Had to close today. Not enough workers!”
We all sort of know what happened. COVID-19 plowed through the planet two years ago causing over 80 million deaths, economic turmoil, and labor shortages. But is that the whole story? I wanted to find out.
26 months after COVID shut down the United States economy, we still don’t have a solid explanation to a simple question. “Where did all the workers go?” Some estimates say as many as 8 million people in the US alone have left the workforce since the dawn of COVID. How did 8 million people just vanish?
President of the Milwaukee Metropolitan Association of Commerce Tim Sheehy says an aging workforce is part of the problem. “Simply, the demographics got away from us,” said Sheehy. “There aren’t as many workers coming into the workforce as there are leaving. More jobs, fewer workers.”
Timothy Smeeding is an economics professor at the University of Wisconsin. He agrees that the older generation is outpacing the rest. “Birth rates have been flat,” he told me. “They’ve never come back, really, from the Great Recession [in 2008], so there are fewer kids going to school. It’s a world in which we have to be creative, be open, and try new things.”
None of that sounds like it has to do with, COVID-19, however. “You have to realize three years ago, things were starting to get tight then, too,” said Smeeding.
Smeeding and Sheehy agree. Even if everyone wasn’t aware of the problem as far back as 2019, it was absolutely there. “COVID-19 was an accelerant to what we were seeing in a tightening job market,” said Sheehy. “It was always going to be here.”
So how did this problem manifest itself. Sheehy says on the top end, many baby boomers retired. Because the labor market became more favorable to workers, those remaining improved their situations. “They went upstream to jobs that pay more,” said Sheehy. “It’s pulling wages up on the bottom so people that start at a certain job will move for another couple bucks an hour.”
The hiring crisis hit places like The Landing at Hoyt Park in Wauwatosa, one of the Milwaukee area’s most popular beer gardens. Brian Wingert runs hiring at the beer garden. “All eight years in the past we had no problem lining up our crew in March,” said Wingert. “We had to push interviews as far back as opening weekend in May. I was actually still hiring people the week we opened. We knew right away this was going to be a tough season.”
Like many businesses, Wingert says they were a tad concerned about being fully staffed for the beginning of the season. “I was a little concerned,” he said. “I was hopeful but it definitely made us a little nervous.”
Unfortunately, Sheehy doesn’t see this problem going anywhere anytime soon. “It’s going to get worse,” said Sheehy. “We have more people retiring and fewer people entering the workforce.” Good news for workers, but still unclear what that means for the larger economy. So what do the next five years look like?
“They look like you’re sitting on the front of a car in a driving rainstorm. It’s going to be difficult to find talent so companies are going to have to be good at communicating the types of jobs they have, the benefits that go with them, and give people the flexibility to take those jobs.”