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The United States kept the unemployment rate at a pandemic low of 3.6%, with a strengthening labor market. However, vacancies are at record levels due to employers’ difficulties in hiring new staff.
Shirley Hughes, owner of Sweet Cheats Bakery in Atlanta, had nine employees in her pre-pandemic prime. Now she has two more, she has had to reduce her business hours, increase working hours and raise wages.
Before the health crisis, Hughes received hundreds of applications for openings. Today he says that, hopefully, he has one or two on his desk, which tend to ask between 18 and 20 dollars per hour, when his offer is 14 or 15 dollars for experienced bakers.
Shirley Hughes is not an isolated case. In the United States there are 5.9 million unemployed and 11.5 million vacancies, according to the most recent government data.
In other words, there are almost two job offers for every unemployed person, a phenomenon that he inherited from the pandemic and that seems to be here to stay.
The great appetite that consumers have shown since the worst months of the health crisis allowed the labor market to return to an unemployment rate of 3.6% in April, erasing all pandemic records and returning to its lowest level in half a century.
Figures from before the crisis also included weekly requests for unemployment benefits, which now fall below 200,000, when in March 2020 they reached the historical record of 6.8 million.
Small businesses fail to fill their vacancies
But a robust labor market is now facing this new challenge: Although hundreds of thousands are returning in droves, some small businesses are still struggling to hire or retain qualified employees.
A survey of 1,100 small businesses by Goldman Sachs 10,000 Small Business Voices last week says 90% are struggling to recruit qualified candidates largely because the big ones are paying more.
“Small businesses are struggling to compete with larger employers on pay and benefits and cite a lack of skilled workers,” said Joe Wall, national director of Goldman Sachs 10,000 Small Businesses Voices.
Data from payroll processing company ADP, closely watched by the market, shows a widening gap in hiring between companies with 500 or more employees and those with fewer than 50. The latter have lost jobs in three of the last four months.
The phenomenon has become more evident particularly in leisure and hospitality. These two industries have cut 1.5 million, or 8.7%, their workforce since February 2020, according to the Bureau of Labor Statistics.
Rob Wilson, president of human resources provider Employco, attributes the situation to “many burnt out after being on the front lines for two years of the pandemic.” Also because some were hired at larger restaurants where wages are higher.
With AP and EFE
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