The Myth of Scarce Workers

Note: after publishing this post I found that the numbers I quoted were in error. I was lazy and got the numbers from a third-party data source I thought was reliable. While US employment is rising, it has not returned to levels reached before Covid. Before Covid employment was about 152 million. As of this November, the number was approximately 149 million or 3 million below the previous peak. 

I wanted to write something about productivity in the USA. Productivity -- or labor productivity -- is calculated using two national figures -- employment and output. Dividing output by employment tells you how much output we can get from a given amount of labor input. When that division increases, we interpret it to mean that a given amount of employment can now produce more output -- ie, we conclude that labor productivity has increased. 

But on the way to productivity I started looking harder at the employment numbers. They seemed to be  screaming at me for attention. So for now, I a going to focus on employment at the national level in USA. I acknowledge that Florida or New York or Port Townsend might deviate from the national figures. But today we focus only on the whole country. 

Why was the data screaming? Because, as often happens, the press or the politicians so misread the situation that it screams for myth correction. Watching your TV or the Internet you might think that firms cannot find workers. They fabricate this picture of firm after firm not being able to find workers. You will, therefore, have to wait in line a long time for your pizza or semi-conductor order to arrive. Covid-induced supply bottlenecks are often blamed but story after weepy story proclaims we have an enormous employment problem. 

Maybe the Bureau of Labor Statistics hates the press or maybe they are mistaken, but if you go to bls.com and download national employment numbers you will be blown away. It is true that employment was dragged down by Covid and interplanetary visitors in 2020, but we are almost to 2022 and we need to focus on post-Covid numbers.

In October of 2020, US payroll employment was 149.7 million jobs. In October of 2021, a year later,  the employment number increased by 4.4 million jobs to a total of 154 million people employed according to payroll statistics for the business sector. That was an increase of 2.9%. Hmm....it seems that firms were finding new employees. Hmm...maybe some firms were not finding employees but if you look at the nation, that's a lot of workers finding jobs. 

It is true that employment bottomed out in 2020 at 142.2 million jobs. But that was then. How does the current figure of 154 million compare to history?

Interesting, the 154 million figure for October of 2021 is the highest on record. It represents a snapback from the recession but it also represents the highest employment level on record for the USA.

2019  150.9 million

2009  131.3 million

1999  129.2 million

Should I go on? 

How is it possible that today's handwringers can know this data and still say the things they say and write the things they write about employment? 

My answer? They don't care about the data. They care about stories. They care about stories that make you want to cry and open your pocketbook or your rich friend's pocketbook to help solve a problem that doesn't really exist. 

Are some people unemployed? Are some companies not finding workers? Of course. Those people always exist. Is this problem huge or huger? I will let you convince me otherwise. But please, don't tell me about one grocery store that you personally know that can't find people to bag your groceries. 

Maybe next week I will turn to national productivity.