Is there a skills or labor shortage in America? The U.S. unemployment rate is about four percent, and has at some points dipped to as low as 3.7 percent, according to the Bureau of Labor Statistics.
The result has been numerous op-eds and articles from news organizations about a “skills shortage” or “labor shortage” which is supposedly afflicting cities all over the country. Employers can’t find workers.
Why? There are a few reasons. Wage growth, much to the surprise of economists, has remained relatively low considering the unemployment rate.
If employers aren’t raising wages, then they are likely to have trouble finding workers, especially ain a competitive economy. Workers are less likely to settle for a job that doesn’t pay well.
Another possible reason lies at the intersection of urbanization and the housing crisis. More and more jobs are located in urban areas, yet new housing has been in short supply. This is a problem nationally, but is especially severe in coastal cities.
San Francisco, for example, created 100,000 jobs from 2010 to 2018, but constructed only 20,000 units of housing during that time.
Even if four people lived in each unit and were all employed, that would still leave 20,000 jobs unfilled.
It’s likely that employers can’t find young workers simply because those workers cannot afford to move to the areas where some of jobs are located.
If wages aren’t rising enough, that makes it even harder to attract workers, especially in high-rent areas.