Widening Labor Shortage Hurts US Corporate Profits Hard

Many businesses have already lowered educational requirements for their future employees, agreeing to take on board people without a high school degree.

labor shortage

The US labor market is brimming with job opportunities, but there are fewer people seeking a job. The acute shortage in workers, particularly blue-collar ones, is eroding corporate profits like never before.

Many businesses have already lowered educational requirements for their future employees, agreeing to take on board people without a high school degree.  If the trend continues, there will come a huge boost for telecommuting in the low-pay services industry, says a latest study by research group Conference Board.

“Those without a high school degree now have record-low unemployment,” said Frank Steemers, an Associate Economist at The Conference Board. “For years, too many of them remained on the sidelines, but companies are now hiring more of them and bringing them up to speed with additional training.”

As the economy expands, labor market is tightening further. “Given the stagnation in the working-age population, even this more modest job growth is still likely to continue to tighten the labor market…,” says Gad Levanon, Chief Economist, North America, Tahe Conference Board.

Unlike in the past decade, now the shortage is more acute in blue-collar and low-pay services occupations than in more highly skilled white-collar occupations.

Many are raising pay in a desperate attempt to retain their staff, while a few others are upskilling their employees. As there are fewer choices in the labor market, companies are hiring less qualified workers for a given job opening.

“To attract quality workers, employers are taking steps to make their jobs more appealing, not only by raising wages, but by enhancing benefits, increasing job flexibility, and providing more meaningful work,” said Elizabeth Crofoot, a Senior Economist at The Conference Board.

The report says there has been a ‘rapid acceleration’ in telecommuting among computer and mathematical occupations, but analysts say sectors such as healthcare, education, and construction may find it hard to harness the work-from-home culture.

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