Labor shortage: Job opening nationally reach a record 10.9 million.

The U.S. Bureau of Labor Statistics provided another data point confirming the labor shortage plaguing employers in our state and nationally. 

The number of job openings increased to a series high of 10.9 million on the last business day of July, the U.S. Bureau of Labor Statistics reported today. Hires and total separations were little changed at 6.7 million and 5.8 million, respectively. Within separations, the quits rate was unchanged at 2.7 percent while the layoffs and discharges rate was little changed at 1.0 percent. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, by four geographic regions, and by establishment size class.

Job Openings

On the last business day of July, the number and rate of job openings increased to series highs of 10.9 million (+749,000) and 6.9 percent, respectively. Job openings increased in several industries, with the largest increases in health care and social assistance (+294,000); finance and insurance (+116,000); and accommodation and food services (+115,000). The number of job openings increased in the Northeast, South, and West regions.

The report, released today, follows the disappointing August jobs report.

The Associated Press reports,

After shedding millions of workers from payrolls last year, the rapid snapback in economic activity has left many businesses severely short-staffed. “Help Wanted” signs can be seen in the windows of businesses across the U.S., and many restaurants have limited their hours of operation.

Employers have offered incentives to attract applicants — like higher wages and one-time bonuses — but the pool of available workers remains constrained by pandemic-related factors.

Looking ahead, hiring constraints should ebb as virus fears abate and schools reopen for in-person learning. However, the surge of infections related to the delta variant and its impact on schools and Americans’ general sense of safety in the workplace could delay significant improvement in filling positions.

The economic recovery cannot afford a delay.


Expanded pandemic-related unemployment programs ended on Labor Day.

Labor Day rung down the curtain on a pair of unemployment benefits programs put in place in the early days of the pandemic. The Associated Press reports,

Two critical programs expired on Monday. One provided jobless aid to self-employed and gig workers and another provided benefits to those who have been unemployed more than six months. Further, the Biden administration’s $300 weekly supplemental unemployment benefit also ran out on Monday.

It’s estimated that roughly 8.9 million Americans will lose all or some of these benefits.

The federal response ran into billions of dollars.

The amount of money injected by the federal government into jobless benefits since the pandemic began is nothing short of astronomical. The roughly $650 billion, according to the nonpartisan Committee for a Responsible Federal Budget, kept millions of Americans who lost their jobs through no fault of their own in their apartments, paying for food and gasoline, and keeping up with their bills. The banking industry has largely attributed the few defaults on loans this past 18 months to the government relief efforts.

The hope is, of course, that a recovering economy will bring more people into the workforce. So far, as the AP notes, the effects are unclear-to-nil, at least in the data from states that opted to end the programs early.

Economists Peter McCrory and Daniel Silver of JPMorgan found “zero correlation″ between job growth and state decisions to drop the federal unemployment aid, at least so far. An economist at Columbia University, Kyle Coombs, found only minimal benefits.

In another AP story, administration officials sound cautiously optimistic.

President Joe Biden’s administration believes the U.S. economy is strong enough not to be rattled by evictions or the drop in unemployment benefits. Officials maintain that other elements of the safety net, like the Child Tax Credit and the SNAP program (which Biden permanently boosted earlier this summer) are enough to smooth things over. On Friday, a White House spokesperson said there were no plans to reevaluate the end of the unemployment benefits.

“Twenty-two-trillion-dollar economies work in no small part on momentum and we have strong momentum going in the right direction on behalf of the American workforce,” said Jared Bernstein, a member of the White House Council of Economic Advisers.

Labor Secretary Marty Walsh said he believed the country’s labor force was ready for the shift.

“Overall the economy is moving forward and recovering,” Walsh said in an interview. “I think the American economy and the American worker are in a better position going into Labor Day 2021 than they were on Labor Day 2020.”

Walsh and others point to encouraging job numbers; as of Friday the unemployment rate was down to a fairly healthy 5.2%.

Calculated Risk writes that the number is not as encouraging as it sounds.

The headline unemployment rate of 5.2% significantly understates the current situation. 

Follow the link to see the calculations. He adjusts “the number of people that have left the labor force since early 2020, and the expected growth in the labor force.” The 5.2% then becomes 7.9%. CR acknowledges,

As the economy recovers, many of the people that left the labor force will probably return, and there will likely be more entrants into the labor force (although recent demographic data has been dismal).

Relatedly, a report on how labor shortages are accelerating automation.

The pandemic didn’t just threaten Americans’ health when it slammed the U.S. in 2020 — it may also have posed a long-term threat to many of their jobs. Faced with worker shortages and higher labor costs, companies are starting to automate service sector jobs that economists once considered safe, assuming that machines couldn’t easily provide the human contact they believed customers would demand.

Past experience suggests that such automation waves eventually create more jobs than they destroy, but that they also disproportionately wipe out less skilled jobs that many low-income workers depend on. Resulting growing pains for the U.S. economy could be severe.

An acceleration of a pre-pandemic trend, we believe, an another argument for more and better skill-training and education.

With homelessness initiative off the ballot, Compassion Seattle says “voters must change who’s in charge” in November.

Compassion Seattle’s effort to overturn a King County Superior Judge’s decision blocking its homelessness initiative from the ballot came to an abrupt end when the state Court of Appeals denied the group’s emergency appeal motion.

Compassion Seattle swiftly turned its attention to the November city election, pointing out that the approach envisioned in the initiative was the right one and that city leaders have been unable to respond to respond effectively to the homelessness crisis.

Today’s rejection of our emergency appeal motion means that Seattle voters must change who is in charge if they want a change to the city’s failed approach to addressing the homelessness crisis. While we are deeply disappointed, we will continue to share evidence that our amendment’s approach can make a necessary and noticeable difference for those living unsheltered in our parks and other public spaces…

The evidence speaks for itself: Seattle has continued to increase its spending on homelessness over the last five years, yet the number of people living unsheltered has only increased. We cannot afford further inaction and the City’s continued failed approach to this emergency. Seattle voters, you have the power to make a difference this November in who you elect as Mayor, as City Attorney, and to the City Council.

More coverage at Geek Wire and MyNorthwest.

Slowdown: Only 235,000 jobs added in August, about one-third of what had been expected.

“Disappointing” seems to be the headline word of the day in reports of the August jobs report. The Bureau of Labor Statistics reports,

Total nonfarm payroll employment rose by 235,000 in August, and the unemployment rate
declined by 0.2 percentage point to 5.2 percent, the U.S. Bureau of Labor Statistics
reported today. So far this year, monthly job growth has averaged 586,000. In August,
notable job gains occurred in professional and business services, transportation and
warehousing, private education, manufacturing, and other services. Employment in retail
trade declined over the month. 

The consensus forecast had been for about 728,000 new jobs. 

The Associated Press reporting puts the month in context and offers a positive spin.

America’s employers added just 235,000 jobs in August, a surprisingly weak gain after two months of robust hiring at a time when the delta variant’s spread has discouraged some people from flying, shopping and eating out.

The August job gains the government reported Friday fell far short of the big gains in June and July of roughly 1 million a month. Those increases were revised higher by a combined 134,000. The gains in June and July followed widespread vaccinations that allowed the economy to fully reopen from pandemic restrictions.

Still, the number of job openings remains at record levels, and hiring is expected to stay solid in the coming months. And even though hiring was relatively tepid in August, the unemployment rate dropped to 5.2% from 5.4% in July.

Still, the slowdown is cause for concern. As we have written, the ADP employment report showed private employment coming in below expectations, the NFIB survey found that half of small businesses have unfilled positions, and while last week’s unemployment claims filings were down, labor shortages remain a major problem and threat to the recovery.

The AP report notes,

Hiring in a category that includes restaurants, bars and hotels, for example, sank to zero after those sectors had added roughly 400,000 jobs in both June and July. With COVID cases having spiked this summer, Americans have been buying fewer plane tickets and reducing hotel stays. Restaurant dining, after having fully recovered in late June, has declined to about 10% below pre-pandemic levels.

The slowdowns in travel and dining out meant that employers had less reason to add jobs in those areas. And many job hunters were likely reluctant to take public-facing jobs as the delta variant has spread.

In related news, the AP reports that service sector employment slowed in August.

The Institute for Supply Management reported Friday that its monthly survey of service industries decreased to a reading of 61.7 in August after hitting a record high of 64.1 in July. The July figure was the fastest pace since this data series began in 2008.

CNBC reports a key factor. 

It’s not that there aren’t enough jobs out there: Placement firm Indeed estimates that there are about 10.5 million openings now, easily a record for the U.S. labor market.

With the pandemic-related federal additional UI benefits programs set to expire next week, some anticipate more unemployed workers will re-enter the job market. But that’s by no means certain.

Economists disagree over the effects of federal unemployment benefits on the labor shortage. According to a recent analysis by The Wall Street Journal, job growth in states that ended federal unemployment benefits earlier this year hasn’t been significantly better than in states where the pandemic benefit were still being offered.

Whether this is a one-month pause or the beginning of a longer-term trend will largely depend on getting control of the pandemic surge.

NFIB survey: Half of small business owners report having job openings they can’t fill.

The latest NFIB small business jobs report underscores the seriousness of the labor shortage.

Fifty percent of all small business owners reported job openings they could not fill in the current period, a record high reading according to NFIB’s monthly jobs report. The number of unfilled job openings has remained far above the 48-year historical average of 22%.

“Small employers are struggling to fill open positions and find qualified workers resulting in record high levels of owners raising compensation,” said NFIB Chief Economist Bill Dunkelberg. “Owners are raising compensation in an attempt to attract workers and these costs are being passed on to consumers through price hikes for goods and services, creating inflation pressures.”

The chart below tells the story. 

While increased compensation may help, it only works if qualified workers are available.  Employers say they cannot find employees with the requisite skills.

Finding qualified employees remains a problem. Fifty-six percent (89 percent of those hiring or trying to hire) of owners reported few or no “qualified” applicants for the positions they were trying to fill in June (down 1 point). Recent strength in the goods producing sector has increased the number of jobs available relative to the hospitality sector which is lagging in the recovery.

Where there are open positions, labor quality remains a significant problem. Thirty-two percent of owners reported few qualified applicants for their open positions (unchanged) and 24 percent reported none (down 1 point). That said, total employment remains about 8 million below the 2020 peak, people who had a job then but are now, temporarily or permanently on the sidelines.

Much more detail in the survey.

Unemployment benefits claims down last week in Washington and nationally. Labor shortages remain a major problem.

Claims for unemployment benefits fell again last week, both here in Washington and across the nation. The state Employment Security Department reports,

During the week of August 22 to 28, there were 5,073 initial regular unemployment claims, down 5.3 percent from the prior week. Total claims filed by Washingtonians for all unemployment benefit categories numbered 272,845, down 1.0 percent from the prior week.  

  • Initial regular claims applications are 72 percent below weekly new claims applications for the same period last year during the pandemic.
  • The 4-week moving average for regular initial claims was 5,345, an increase of 39 from the previous week’s 4-week moving average. During the same time in 2019, it was 5,024.
  • Decreases in layoffs in health care and social assistance, wholesale trade and retail trade contributed to a decrease of 284 regular initial claims over the previous week.
  • There was a decrease in the combined total of initial claims and continued or ongoing claims for all benefits—which include regular unemployment insurance, Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC).
  • Federal pandemic benefits programs, including PUA and PEUC as well as the additional $300 per week, are set to expire the week ending Sept. 4, 2021.

The U.S. Department of Labor reports,

In the week ending August 28, the advance figure for seasonally adjusted initial claims was 340,000, a decrease of 14,000 from the previous week’s revised level. This is the lowest level for initial claims since March 14, 2020 when it was 256,000. The previous week’s level was revised up by 1,000 from 353,000 to 354,000. The 4-week moving average was 355,000, a decrease of 11,750 from the previous week’s revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week’s average was revised up by 250 from 366,500 to 366,750.

The advance seasonally adjusted insured unemployment rate was 2.0 percent for the week ending August 21, a decrease of 0.1 percentage point from the previous week’s unrevised rate.

The advance number for seasonally adjusted insured unemployment during the week ending August 21 was 2,748,000, a decrease of 160,000 from the previous week’s revised level. This is the lowest level for insured unemployment since March 14, 2020 when it was 1,770,000.

Clearly good news, but employers continue to contend with labor shortages. The Seattle Times has an excellent report on the challenges faced by the restaurant industry. We recommend reading the full article. This stood out:

Anthony Anton, CEO of the Washington Hospitality Association, says the labor shortage is one of the main forces making restaurant work difficult right now. 

With restaurants reopening, the demand for restaurant labor is as high as it was before the pandemic, Anton says. But the leisure and hospitality industry, of which food service is the largest component, was down 69,000 jobs in June compared with January 2020, almost double the losses seen in any other industry, according to the state Department of Commerce. And as of the second week of August, over 23,000 people in the industry were still claiming unemployment benefits in Washington, according to the state’s Employment Security Department. 

As noted above, federal pandemic unemployment benefits end September 4. Yet,

Anton is telling members of his association not to count on cooks and servers coming back to work when benefits end. Even if every single hospitality worker currently claiming unemployment benefits returned to Washington’s hospitality workforce, the industry would still be short nearly 50,000 workers, many of whom Anton says left for other industries or retired during the pandemic.

The AP reports,

“The expectation remains that labor supply shortages will ease over coming months as benefits end and schools reopen,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research note. “Even so, health risks, which could influence decisions regarding return-to-work arrangements and school re-openings, could be a constraint for the labor market going forward.”

Still a rough road ahead.



ADP reports private employers added 374,000 jobs in August, well below consensus forecast.

Payroll processor ADO released its National Employment Report for August, showing the private sector added 374,000 jobs in the month.

“Our data, which represents all workers on a company’s payroll, has highlighted a downshift in the labor market recovery. We have seen a decline in new hires, following significant job growth from the first half of the year,” said Nela Richardson, chief economist, ADP. “Despite the slowdown, job gains are approaching 4 million this year, yet still 7 million jobs short of pre-COVID-19 levels. Service providers continue to lead growth, although the Delta variant creates uncertainty for this sector. Job gains across company sizes grew in lockstep, with small businesses trailing a bit more than usual.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The Delta variant of COVID-19 appears to have dented the job market recovery. Job growth remains strong, but well off the pace of recent months. Job growth remains inextricably tied to the path of the pandemic.”

Calculated Risk notes,

This was well below the consensus forecast of 638,000 for this report.

The BLS report will be released Friday, and the consensus is for 728 thousand non-farm payroll jobs added in August. The ADP report has not been very useful in predicting the BLS report.

We’d add that employers continue to report unfilled jobs, signaling the persistent labor shortage.

Report: Washington’s teacher pension programs rank third best in the nation

A new report from Bellwether Education Partners assess state teacher pension programs, ranking Washington third best in the nation. (For background on BEP see here.) The table above is from the report. 

BEP writes,

Teacher retirement plans are not just an education issue. With about 3.2 million public school teachers and millions more retirees, teacher retirement is a broad retirement security issue for Americans. And contrary to much of the political rhetoric for and against defined benefit pension plans, these plans are not “gold-plated” for most teachers. In fact, many people who teach, even for substantial amounts of time, never see a pension at all. Taxpayers, too, have a stake in pension systems that are supported with public dollars and often have displacing effects on public finance. The State Teacher Retirement Rankings are an attempt to reduce confusion and misinformation and show how states are balancing the needs of various constituents.

To support broader understanding of the challenges of teacher retirement systems, the State Teacher Retirement Rankings cut through the complexity to provide information to help more people better understand how these systems work and don’t work for teachers and taxpayers. To show how well retirement plans serve various constituent groups, we assess them for four profiles: short-, medium-, and long-term teachers as well as for taxpayers. This approach shows that there are no “right” answers for reform, just trade-offs.

The report goes into some detail on methodology, which re recommend to those who want to dig deeper. 


A state with an ideal teacher retirement system would earn 100% of its possible points. In our rankings, South Dakota comes closest. It emerges as the leading state with an overall score of 88.4%. Tennessee, Washington, Utah, and New York are also in the top five states. Pennsylvania, Connecticut, Kentucky, New Jersey, and Illinois make up the bottom five with scores ranging from 34.9% to 43.3%. Importantly, however, these overall scores mask variation in how each state serves different constituent groups; some states emerge with particularly strong ratings for short-term teachers, while others score much better for long-term teachers or taxpayers. Consequently, these rankings are designed to be used comprehensively across constituent profiles, rather than one profile at a time.

Money magazine writes,

The authors compare states with pensions alongside states with these alternative plans, ranking the plans based on 15 variables, including investment returns, annual contribution rates, how well a state’s system is funded, how long teachers have to pay into the system before qualifying for benefits and how much teachers can expect to receive after retiring.

“Everyone has room to grow,” says Andrew Rotherham, cofounder at Bellwether and an author of the report. “The laggard states are really laggards, but even the best states have things they can do to improve.”

The stakes for teachers’ retirement security are high: For one thing, teachers in more than 12 states — some 40% of all teachers — do not qualify for Social Security, meaning they may not have any guaranteed income in retirement. (In this way, they’re like certain other local and state workers who are excluded from the program.) While some long-serving educators receive a comfortable pension to make up for that, many other teachers leave before they qualify for a full payout.

Money also notes criticism of the Bellwether approach.

One of the challenges of ranking state retirement plans, says Jean-Pierre Aubry, director of state and local research at the Center for Retirement Research at Boston College, is that what qualifies as ‘good’ will depend in part on the goal of the plan.

Overall, Aubry called Bellwether’s analysis thorough and well-documented, but he worried that it was “missing the forest for the trees.”

The authors considered so much minutiae about the plan designs to be able rank the states, he said. But that’s not necessarily what policymakers or teachers themselves focus on, he says. The big questions — What does the benefit pay in retirement? What does it offer to people who switch careers before full retirement? And how is the cost split between the employer and employee? — get somewhat lost.


Nari Rhee, director of the retirement security program at the UC Berkeley Labor Center and one of the authors of the analysis of state plans, thought Bellwether’s approach of identifying relevant factors for different stakeholders was sound. And she listed a similar set of priorities when asked to define a quality pension plan for teachers: a vesting period of no more than five years, a cost-of-living adjustment to payments after retirement, a funding policy that requires the state to make the recommended contributions into the system.

But Rhee, who reviewed a copy of the rankings ahead of their release, said it was difficult to compare defined contribution and hybrid plans alongside pension plans without calculating the likely salary replacement rates under all three plans.

Good points, certainly. It’s a complex subject, to which the Bellwether report supplies useful additional information for consideration, even as it raises questions unanswered in the research.