The ongoing Covid-19 pandemic is throwing a lot of challenges at ordinary American citizens looking for jobs and Human Resources managers looking at hiring qualified, experienced and skilled workers for their respective organizations.
Here’s why the problem is acute and needs to be resolved earlier: According to various estimates, there’re nearly 8.5 million persons that are unemployed in the USA.
However, statistics prove that over 10 million jobs are available in various industries in the country.
This equation is confusing a lot of Human Resources managers, companies that own job boards, and people who are unemployed. Most people ask why’s the employment rate so high even though more than adequate jobs are available in the USA.
Therefore, in this article, we will explore the various reasons why millions of people across America remain unemployed and why American workers are becoming hard to find for almost every industry in the USA.
Reasons why Millions Are Unemployed in America
There’re various reasons for such a difference in employment rates in the USA and why American workers are difficult to find.
This problem existed long before the Covid-19 pandemic struck the USA and the world. Therefore, what we’re talking about isn’t something new.
However, what’s new is the fact that the Covid-19 pandemic is changing a lot of employment market dynamics.
Here’re some of the reasons that will explain why millions are unemployed in the USA yet employers can’t find American workers.\
Also read: 25 reasons you can't find a job
Spurt in Freelancing
Nearly 36 percent of America’s working population- of over 59 million women and men in the USA were freelancing in 2021, according to the latest information available from Statista.com and other reliable sources. In contrast, in 2014, the number of American freelancers stood at 53 million.
There’re many reasons for this upward growth in the number of freelancers in the USA. However, let’s start with the scenarios caused by the Covid-19 pandemic that struck the world in 2020.
Close to 10 million Americans lost their jobs during the Covid-19 pandemic, especially during the peak- from March 2020 to July 2020.
This massive unemployment can be attributed to the permanent closure of small to large businesses due to their inability to shift operations to online platforms, total dependence on offline work, and bankruptcy caused by the lower business.
As stores and offices had to remain closed during the lockdown periods, to avoid the spread of the Covid-19 contagion, several companies had to lay off their employees that couldn’t work from home due to the nature of their work.
We’ve most likely heard the news that companies such as Hertz car rental and JCPenney had to buckle down in the aftermath of the Covid-19 pandemic.
Women and men who lost their jobs due to the pandemic had no option but to stay home and hope for the pandemic to ebb- which hasn’t happened though we’re in 2022.
The worst affected are persons that don’t possess skills to work online or those whose role doesn’t permit online work from home.
At the same time, women and men who have the skills to work from home joined the freelance economy in 2020 and 2021, thus causing a spurt in the number of freelancers in the USA.
Since they were unemployed but their skills remained relevant to the ‘new normal, such persons could easily switch to freelancing while eliminating the need to find a fixed office-bound job.
Consequently, we have a situation where Americans who’re still employable aren’t interested in working full-time at offices with fixed employers.
Instead, they prefer freelancing for several clients and making more money while working from home on flexible hours.
This explains a part of why millions are unemployed while companies find it hard to get American workers.
Unwillingness to Relocate
The Covid-19 pandemic also saw a very unusual situation arise in the US job market, especially among the millennial generation. About 43 percent of millennials chose to relocate to their parental homes or at least nearby.
They left lucrative jobs and employment in other parts of the US because they wanted to feel safe and closer to their dear ones during the deadly pandemic, as it swept across America and the globe.
Strangely, these millennials continue to dwell and work at places where their parents reside or, at least, in nearby towns and cities.
They’re unwilling to relocate to other places in the USA, despite offers of higher pay and perks. These millennials don’t wish to depart from the security of their homes and places they know.
A lot of these millennials can get high-paying jobs elsewhere in America if they’re willing to relocate.
However, the latest indications are that such millennials aren’t willing to relocate, mainly because the pandemic seems far from over, with newer variants of the dreaded Covid-19 virus from various locations in the world, making their appearance and infecting people in the US.
The War of Skills
There’s a full-blown war of skills that persists in the US, though not many HR managers and employers are taking notice. This is happening because of the easy availability of affordable online courses for fresher applicants and professionals in any field.
Some years ago, working persons in America primarily depended on their employers to provide training and acquire the latest job-related skills. That’s not the case anymore.
Nowadays, millennials and persons with adequate work experience in any field prefer to take online training courses at their own expense. That’s because such courses are now easily available and also priced affordably.
As a matter of fact, the selection of online training courses has become extensive over the past couple of years compared to 2018.
But again, there’s an interesting scenario: not everyone is taking these online courses to upgrade their skills. The only people doing so are those who’re aware that their skills would go redundant in the near future, rendering them useless for the job market, or at least to find well-paying jobs.
There’s a large segment of employees who don’t take such online courses. And as a result, they cannot find jobs that require the latest skills. Most of them shun online training courses because of the costs.
For obvious reasons, employers won’t hire a person with outdated skills. The number of people with the latest skills is limited and quickly gets jobs. Hence, those unemployed can’t find jobs while employers can’t find suitable American workers.
Entrepreneurship and Startups
ACCORDING TO VARIOUS RELIABLE SOURCES, the US government received 3.51 million new business applications in 2019. Now, that’s a considerable number of almost 33 percent of the unemployment rate of about 10 million Americans.
Here, it’s worth noting that not all of these small businesses are tech-based startups. In fact, some of them are simple, brick-and-mortar shops such as bakeries and neighborhood grocery stores.
However, the number of 3.51 million represents the fact that an increasing number of Americans are now opting for opening their own business, regardless of the nature and whether it’s online or offline. They’re opening new businesses to eliminate their dependence on fixed jobs.
Most of these startups and small businesses are opened by fresh entrepreneurs who have little or no experience in doing business. However, these entrepreneurs enter the market with a new concept that people would like.
Or, they step in with a business that serves the needs of people in areas that require the service or product.
As more and more people in the US take to entrepreneurship, we’re likely to see a drop in the number of job applications. American companies will find it harder to get American workers at all levels.
High Paying Side Gigs
Before I start writing on this point, let’s make one thing very clear. Freelancing and side gigs are two altogether different things. In the sense that freelancing is a longtime business where the freelancer works as an independent contractor to provide work for buyers.
In stark contrast, side gigs are occasionally taken by women and men who wish to earn money as their primary source of income or augment their existing ones.
If we look at the side gig industry of America, it’s apparent that more and more companies offer such occasional or regular work and pay well. A classic example is Amazon Flex, which pays $25 per hour for a four-hour shift that involves delivering packages for Amazon.
If we calculate an average day of four hours, and Amazon Flex worker makes at least $100 per day, excluding tips and other benefits. This works to $3,000 per month or $36,000 per year.
The salary of $36,000 per year isn’t available for many professions in the USA. In some cases, the salaries are as much as $25,000 per year only, and that too for a full, eight-hour shift with fixed work hours. In stark contrast, side gigs offer higher pay for fewer working hours, and that too with flexibility.
This mismatch between salaries for fixed jobs with fixed salaries and money available for side gigs tempts an increasing number of people. Therefore, American companies will find it harder to get American employees, especially for jobs that pay lesser than side gigs.
Before concluding, I will add that these aren’t the only five reasons for unemployment and companies not being able to find American workers.
There’re a lot more, such as ethnic affiliations, family constraints, availability of multiple sources of income, to name a few.
Some HR managers also attribute national politics and its fallouts to the high unemployment rate and the inability of US-based companies to find American workers. These are, however, highly debatable and not recommended from a purely HR perspective.