3 'mismatches' that explain the labor shortage

3 'mismatches' that explain the labor shortage

Job seekers browse tables at a veterans' job fair in Burbank, Los Angeles
Thomson Reuters

You may have heard that there's a labor shortage, as employers desperately woo workers.

But mismatches in skills, where workers are located, and what they want out of work could be to blame.

Those factors will probably continue to shape the strangeness of the labor market for a while.

See more stories on Insider's business page.

Have you heard of this labor shortage? It's pretty wild, with millions of jobs open, and workers just not filling them.It's a sign of the remarkable success of the vaccination campaign under President Joe Biden. The economy began reopening in earnest through the spring and is rapidly approaching normality in the summer, even as the Delta variant sparks a concerning number of cases in unvaccinated areas. On the other hand, it's also thanks to huge federal stimulus, as American consumers are unleashing a flood of money on the world's economy, and businesses can't staff up or keep up with it.But something deeper is going on: What economists call a "mismatch." It's actually three mismatches at once. Central bankers previously said a mismatch could explain the "jobless" recovery from the Great Recession. A 2013 paper by the New York Federal Reserve noted the job-finding rate was half that of 2006, and raised the theory that "the recession has produced a severe sectoral mismatch between vacant jobs and unemployed workers."
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