California businesses can’t fill openings; economists warn of slowed recovery
(The Center Square) – Employers in California cannot find workers and it is affecting the state’s economic recovery, a new survey shows.
The National Federation of Independent Business’ monthly survey of small business trends shows optimism from job creators nationally took a pause as the COVID-19 pandemic waned.
“May saw a slight pause in the recovery of small business optimism after steadily increasing each month in 2021,” NFIB said in a statement. “As reported in NFIB’s monthly jobs report, a record-high 48% of owners reported unfilled job openings.”
The NFIB’s survey included questions about business conditions in the coming months. Business owners expecting better economic conditions over the next six months fell 11 percentage points to a net negative 26%.
Economists warn that labor shortages, especially pronounced in California’s service industry, will stymie a recovery effort.
“This is not the type of news we would have preferred hearing heading into the vacation months in our state’s tourist-heavy economy,” said John Kabateck, NFIB California state director. “I think some warning lights, if not alarm bells, should be raised especially for our State Legislature.”
Kabateck hopes lawmakers will hold off on new proposals he said would hurt employers but isn’t optimistic they will do so.
Nationally, job openings and workers walking away from current employment remain at near-record highs.
“The labor shortage is holding back growth for small businesses across the country. If small business owners could hire more workers to take care of customers, sales would be higher and getting closer to pre-COVID levels,” NFIB Chief Economist Bill Dunkelberg said. “In addition, inflation on Main Street is rampant and small business owners are uncertain about future business conditions.”
An April poll from The Conference Board found 44% of firms said they have job openings they cannot fill right now – the highest percentage in the poll’s 47-year history, the authors said.
“On the supply side, many working-age adults may avoid entering the workforce because of factors that include the fear of being infected, the need to take care of young children at home, and high federal unemployment benefits that may reduce the incentive to find work,” The Conference Board said.
The board said the labor demand is also increasing wage rates.
Disclaimer: This content is distributed by The Center Square
