Jobless claims in the United States have hit a pandemic low, according to the most recent figures released by the Department of Labor. The ostensibly promising figures, however, are doing little to offset growing labor shortages.
Initial jobless claims dropped by 14,000 to 340,000 in August, a pandemic low not reached since March 2020. Ongoing jobless claims fell to 2.75 million, a decrease of 160,000 compared to the month prior. While the figures reflect a decreasing number of Americans being left unemployed by pandemic-related losses, the dynamic of the labor market as a whole has reversed.
"We think it's gotten tighter since earlier in the year," Glassdoor Senior Economist and Data Scientist Daniel Zhao told CNBC. "Job openings continue to reach record highs and are well above historical levels. ... At this point, any hiring needs to draw from unemployed workers or pulling workers in from those out of the labor force, which is always hard, and even harder now with pandemic."
The looming expiration of unemployment benefits maintained by the U.S. federal government may boost the supply of labor. Still, the pivotal factor that will likely prevent a total return to the pre-pandemic status quo is the drastically altered perception of low-wage work that many Americans have gained over the course of the pandemic (a case best illustrated by the "we all quit" incident).
The reluctance of skilled workers to settle for underemployment has also grown over the course of the pandemic, with poaching becoming a considerable threat to companies seeking to retain top talent but who cannot/do not set competitive wages.
Further driving the market in favor of labor is the boosted savings that many Americans possess due to protracted unemployment support, which has allowed workers across all industries and skill levels to bide their time and avoid underemployment.
- https://www.pws.io/we-all-quit-incident-should-be-very-concerning-for-low-wage-employers
- https://www.cnbc.com/2021/09/02/us-weekly-jobless-claims.html
- https://www.wsj.com/articles/weekly-jobless-claims-09-02-2021-11630527461
- https://www.cnbc.com/2021/09/01/unemployment-benefits-are-ending-job-market-hiring-worries-arent.html