A record number of small business owners reported unfilled job openings in May, reflecting the lingering impact of the COVID-19 pandemic’s disruption to the labor market.
According to the National Federation of Independent Business, 48% of small business owners said they could not fill job openings last month, up from 44% in April. It was the fourth consecutive month of record-high readings for unfilled job openings.
The report also showed that finding qualified employees remains a problem, with 93% of owners hiring or trying to hire reporting few or no “qualified” applications for the positions they were trying to fill in May.
“Small business owners are struggling at record levels trying to get workers back in open positions,” NFIB Chief Economist Bill Dunkelberg said in a news release.
Economists have been warning that it is premature to be concerned about a labor shortage, predicting that higher wages — combined with the reopening of schools and the end of extra jobless benefits — will eventually draw people back into the workforce.
“The market mechanism to clear this labor supply-and-demand imbalance is higher real wages,” Scott Anderson, chief economist of Bank of the West, told MarketWatch. “This would provide more incentive for folks who have exited the labor force to come back in, and for others to switch jobs to sectors where qualified labor is in short supply.”
The number of Americans filing new claims for unemployment benefits fell below 400,000 last week for the first time since the COVID-19 pandemic began more than a year ago.
In addition, the ADP National Employment Report showed that private payrolls increased by 978,000 jobs in May, the largest increase since June 2020.
Small business owners “are offering higher wages to try to remedy the labor shortage problem,” Dunkelberg said.
Forty percent of small businesses surveyed by the NFIB currently have job openings for skilled workers and 27% have openings for unskilled labor, up 3 percentage points and 7 percentage points, respectively.