As current labor shortages continue to keep the U.S. economy from fully recovering from the coronavirus pandemic, some states are having to fight harder than others to attract talent.
A new report from WalletHub has highlighted the states that are struggling the most to hire. Alaska took the top spot, with a job opening rate of 8.3%, followed by Louisiana at 7.7%. Rounding out the top five were New Mexico and Georgia, accounting for 7.6%, and Montana at 7.5%.
“This could happen for a variety of reasons, such as a lack of adequate compensation or recognition of value,” WalletHub analyst Jill Gonzalez told Yahoo Finance.
The coronavirus pandemic has reduced the workforce by 4 million in 2021, and although job losses have recovered, the labor force participation rate remains depressed. Thus began the era of Great Resignations, in which thousands of workers opted for early retirement and kept labor force participation low even as businesses reopened and resumed hiring, according to Gonzalez.
States that struggle less with hiring tend to have larger workforces. The nation’s four most populous states — California, Texas, Florida and New York — all have job opening rates at 6.3 percent or lower.
New York has the lowest job vacancy rate in the country at 5.4%. Since early 2022, the state’s labor force participation rate has soared to 60 percent by November.
The ongoing labor shortage has not gone unnoticed by government officials, with Federal Reserve Chairman Jerome Powell commenting on the matter during his latest FOMC speech.
“The job market continues to be unbalanced, with demand substantially exceeding the supply of available workers,” Powell said last week. “Companies want to keep the workers they have because it’s been very, very difficult to hire.”
Workers are also finding that income isn’t keeping pace with inflation, which hit record highs in 2022. Income and inflation don’t always rise in lockstep as wage growth is typically based on trends in the rate of income. labor force participation and productivity.
Labor shortages can have a serious impact on a company’s bottom line, too: In addition to employee “reshuffles” and changing corporate strategies, a drop in profits and supply chain problems can hurt companies. Long-term economic effects can affect GDP growth and trigger a recession, according to McKinsey & Company.
“The impact on companies is that they have to change their perspective,” Jeremy Hill, director of the Wichita State University Center for Economic Development and Business Research, told Yahoo Finance. less skilled personnel to enable upward mobility or add technology to increase the productivity of current employees.”
According to Gonzalez, uncertainty about hiring will last “at least until inflation is under control”.
“For now, we can say finding and retaining work will remain difficult through 2023,” he added.
Tanya is a data reporter at Yahoo Finance. You can follow her on Twitter @tanyakaushal00.
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