Labor shortage? ‘Absurd’ says one economist, who calculates U.S. could add 28 million more jobs

 Despite the number of help wanted signs dotting nearly every shop these days or notes encouraging patience at restaurants because of staffing shortages, a new report finds that the U.S. is far from a real dearth of workers.

new report from the Roosevelt Institute finds that the U.S. could add an additional 28 million jobs over the next decade if there’s a sustained and strong demand for labor. That’s about 10 percentage points higher than the Congressional Budget Office’s estimate of maximum employment

“It's absurd to say there's a labor shortage in any absolute sense. There are a lot of people sitting on the sidelines who can and will come into the labor market if we just keep the current level of tightness,” says J.W. Mason, an author of the report and an economist with the Roosevelt Institute. 

To determine maximum employment, Mason and the team calculated the size of the latent labor force by basically asking how many people could plausibly be working in the U.S. by taking into account employment rates across race, gender, education, and age. In doing so, they found that there’s much more labor market slack than conventional measures of unemployment suggest. 

“Essentially, if you could get rid of the racial employment gap, get rid of the non-childcare gender gap, and just get the education and age gaps back to the levels they've been at in the relatively recent past, then that gets you 28 million additional workers,” Mason told Fortune

That’s not to say that workers don’t face a lot of barriers to employment, including systemic inequalities and discrimination. The report finds that Black Americans, women, and those with less education do find themselves at the back of the hiring queue more often. 

“Employment discrimination is very important and we shouldn't lose sight of that, but there are a lot of other barriers that make it easier for some people to get employed than others,” Mason says. That includes factors such as flexibility of worker schedules, location, and even background.

It’s worth noting, however, that the report estimates that adding these 28 million jobs would require an average annual growth in employment of 2.7% — a rate the U.S. hasn’t seen since the 1970s. “That we have not seen employment grow at this rate in recent years does not mean it is impossible,” the authors write. 

And achieving this level of true full employment will be disruptive for employers. Companies and businesses may have to relax their standards or work a lot harder to recruit employees. 

“Maybe you have to consider people without the college degree you thought was required, or people without as much experience as you thought was required, or people who are going to be pickier about their schedule,” Mason says. 

“People are used to having a buyer's market for labor and it's a little bit of an adjustment. But a little bit of adjustment does not mean an emergency and it doesn't mean that we should be cutting off the opportunities for people to work just because that will make employers' lives a little easier.”

“Remember that time Jane got pissed because your relative had cancer?” Jane was a former boss (not her real name), but the cancer was real. An old coworker reminded me of this recently, and as much as I attempted to wipe that experience from my memory, it floods back to me regularly.

I’ve had some transformative, wonderful bosses over the past 20 years, and I’ve also had the opposite. Jane was the opposite, and the experience was notable, and a nod to the struggles that might lay ahead as the workforce considers going hybrid.

Organizational Culture Can Be Attractive

A big part of my interest in working with the company was their focus on the work itself, not working hours. There was a physical office and some sense of routine, though as long as the projects got done, few managers concerned themselves with the details of where, when, or how.

And this was years before the pandemic.

As millions of us are awkwardly trickling (or being coerced) back into physical offices, it has been interesting to think back on my “Jane experience.” I had only been with the company for four months, though there’s no good time to receive such news. But that didn’t matter; I needed to be with my family. There would be a lot of downtimes, so I planned to continue with all my projects, most of which involved research that could be done anywhere.

I learned pretty quickly that Jane operated differently from the other managers. She expected her employees’ butts to be in seats from 8 am to 5 pm every day. So when I approached her with my family news, I vividly recall her three immediate responses, in order:

  • “How long will you be away?”
  • “How will I know you’re actually doing your work?”
  • “Oh, sorry about your relative.”

I remember my exact response to her second question: “You’ll know I’m doing my work because the work will be getting done.” Jane couldn’t fathom — even with a laptop, strong WiFi, and a solid VPN connection — how I could possibly accomplish anything outside of the office.

This is not a unique experience. You’re reading this and thinking, “Yep, I know a Jane,” and that’s unfortunate. Perhaps there’s some sense of comfort and solidarity knowing that so many of us share similar experiences, but I doubt it.

I’ve Thought About Jane During the Pandemic

I’d love to tell you these thoughts were cursory and well-wishing — it’s a pandemic after all, and we want everyone to be healthy and happy. But my thoughts were more like: I wonder how Jane is doing with her current employees now that everyone is forced to work at home.

I have some sympathy for bosses like this. It can’t be easy for them, and the same goes for their employees. The amount of checking in and progress updates and peripheral communication must be daunting on both sides.

A work culture can be equal parts good and bad, and the culture Jane cultivated was one of being an in-office workhorse. There isn’t anything inherently wrong with this — under normal circumstances. But all you need is a little, pesky pandemic to shock such a culture. In his articleWhat Is an Organization’s Culture? Clayton Christensen reminds us, whereas a company’s culture can demonstrate “a powerful capability in addressing certain types of problems,” it can just as easily “constitute an equally powerful disability in addressing others.”

Jane and I approached work very differently. I cut my teeth in very hardworking-yet-flexible environments before working for her, and that’s what I was expecting when I landed at the company. Jane, conversely, must’ve had the polar opposite experience. We are products of our environments, and I’ve found this to be uniquely true at work.

Did I have a difficult time working for Jane, especially in the throes of a tragic personal experience? You betcha. Did I grumble and fuss about it more than I should have? Darn right. Could Jane have embodied the company values and extended some kindness and flexibility to me? Absolutely.

The “Jane Experience” Was a Learning Moment

One of the big questions the workforce has been asking over the past 16 months is this: Is how you work inextricably linked to where you work?

The culmination of my previous experiences allows me to rely on myself as much as it does my colleagues and managers. And that’s not unique to me — so many of us have demonstrated our ability to be as productive from a makeshift living room standing desk as we are in an office cubicle. With the great resignation of millions of employees, businesses will need to reckon with the question above and provide a pretty darn good answer.

At the same time, those of us who have demonstrated our competence need to be clear about that with bosses. Besides being great for business, this has the added benefit of inspiring them (and our colleagues) to allow us the space to do our best work — whether that’s in the office during good times or 500 miles away during one of the most difficult moments in your life.

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