3 reasons there's a labor shortage, according to Biden's labor secretary

Now Hiring sign — A customer walks by a now hiring sign at a BevMo store on April 02, 2021 in Larkspur, California.
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There's currently anecdotal labor shortages all over the economy, as employers scramble for workers.
It's another marker of the strange labor market trend where millions are unemployed, but workers are quitting in droves.
Labor Secretary Marty Walsh attributes shortages to the virus, its unprecedented times, and workers rethinking what they want.

In case you haven't heard, there's a bit of a labor shortage.

Everywhere you look, there seems to be anecdotes about businesses struggling to hire and retain workers. A Starbucks is Ohio is slashing hours and closing on Wednesday and Thursday due to short staffing. A Midwestern grocery chain is closing an hour early and offering staff members a $600 retention bonus.

Even so, workers have been quitting at a record rate for four months in a row. In July, the last month that the Bureau of Labor Statistics released data on, there were still more job openings than workers available. On Friday, BLS said that the US added a paltry 194,000 jobs in September - far lower than economists expected.

All told, it's yet another month marked by shortages and a reshuffle of the labor market, even as millions still remain unemployed. But what's driving these continued holes? Insider spoke with Labor Secretary Marty Walsh following Friday's jobs release, and he identified three potential drivers.

(1) 'We're living in unprecedented times'

Simply put, Walsh said that "unprecedented times" is one reason for shortages.

Job hunting and hiring during a pandemic is certainly different, with a new calculus for workers. An in-person job could bring increased risk, or take a parent away from a child completing virtual schooling. Workers are also dealing with a lopsided recovery, with industries like leisure and hospitality leading new hiring as areas like education are still behind.

One June survey of 1,800 workers by remote and flexible jobs site FlexJobs found that 48% of workers were frustrated with the search, and 46% said they only found openings for low-paying roles. That skills mismatch is one driver of current shortages.

Another mismatch impacting hiring: During the pandemic, workers moved out of the areas that are hiring, and they don't want to commute anymore.

(2) Fears over health

"The virus is still very much with us," Walsh said, noting that hundreds of thousands of American have died. Indeed, the rise of the highly infectious Delta variant has driven the dismal jobs additions in August and September, showing that the virus - and not enhanced unemployment benefits - is keeping workers at home.

The Census Bureau's Household Pulse Survey asks respondents why they're not working. Of those surveyed from September 1 to September 13, about 4.65 million said the main reason they weren't working is because "I was caring for someone or sick myself with coronavirus symptoms." At the end of July, just about two million people said that was their main reason for not working - meaning that as Delta rose, the number of people not working over symptoms nearly doubled.

US Transportation Secretary Pete Buttigieg, Labor Secretary Marty Walsh, and Housing and Urban Development Secretary Marcia Fudge.
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(3) People are rethinking life and work

"I think a lot of people are re-imagining or rethinking about what's next for them," Walsh said. It's what been termed "The Great Resignation" by organizational psychologist Anthony Klotz.

Klotz previously told Insider that Americans see their role as a worker as central to their identity. That may have been disrupted by the pandemic, as workers were suddenly laid off, sent home, or burnt out. Klotz noted that organizational research shows coming in contact with death or illness - something tragically abundant during a pandemic - causes people to step back and ask existential questions about their purpose and happiness. For many workers now, flexibility is key.

"I've talked to a lot of businesses that have said some people have just decided to walk away from the industry they're working in, and they're thinking about what's next for them," Walsh said. "So I think that the work-life balance has played a big role in this."

Read the original article on Business Insider