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The narrative surrounding the labor market during the COVID pandemic has been confusing for the past 18 months. Initially, the public was familiar with the mass loss of jobs at the onset of lockdowns and closures in the service industry. This pushed the unemployment rate to near record highs and caused millions to leave the workforce. This time also saw a massive shift in how people shopped for groceries, food, and everyday items. Delivery services such as Amazon, GrubHub and DoorDash hired at a fast pace, placing workers in more “gig economy” jobs, and lower waged part-time positions.

As the pandemic progressed, stories circulated widely about the issues faced by specific industries, such as a labor shortage in mills leading to an unprecedented increase in lumber pricing. As governmental support evolved, the narrative shifted and focused on people’s motivation to work lower waged jobs when the benefits they received amounted to more than their take-home pay. Multiple articles have shown that economists tend to agree that while enhanced benefits played a small role in some people staying out of the labor market, they also point to more significant factors including caring for family members, school closures, an imbalance in demand and supply, preference for working remotely, worker location and skills, fear of Covid-19, and employee retirements.  So, the assessment that all labor market shortage issues are caused by COVID outbreaks or people making a conscious decision not to work is too simplistic to explain the current state of the job market. So, what is really going on in the labor market?? The answer is, it’s changing!

Workers are commanding better terms. The supply chain issues in the US economy are exacerbated by a huge shortage of truck drivers. Truck driving jobs are seen as being low pay, high risk, and demanding jobs in a highly regulated industry. These factors lead to compensation that does not reflect the difficulty of the job. The impact of losing workers in this industry, and many like it, means in order for supply chain issues to be alleviated, whole industries must look at what is required to attract and retain a motivated workforce.

In retail, as stores prepare for the holiday rush, companies are looking at ways to be more considerate to their existing workforce. A new approach to seasonal staffing means that Target will reduce its seasonal workforce and will offer its 300,000 employees an additional 5 million hours during the holiday season, which it says amounts to $75 million of additional pay. Target also initiated a program to bring all starting wages to $15 per hour as of July 1, 2021. Target claim that on average their hourly employees are earning 15% more than in 2020. This is just one example of how retailers are trying to attract employers. Target have also launched a new app that makes it easier for staff to pick up more shifts, choose times or swap hours on demand, so workers can better manager other obligations like parenting or attending a college class. This shows that the flexibility trend is even making its way into retail. In another example, Amazon and Walmart are joining Target in offering tuition assistance to its employees. Much of these incentives are a reversal of the Great Recession, when large retailers used the global economic climate as a reason for decreased employee benefits.

Independent Rehabilitation Services stays informed of the latest trends and fluctuations in the labor market in order to provide to the absolute best Vocational Rehabilitation Services in the industry. Paying close attention to the labor market conditions allows us to provide accurate employment assessments while promoting positive return-to-work outcomes among our clients.

Written by: Eric Flanagan, MS, CRC, LCPC, CDMS. CVE