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“Blue Collar” Worker Shortage Remains Despite “White Collar” Layoffs

While “White Collar” layoffs dominate the headlines in 2023, businesses are still facing a shortage of skilled workers and other “blue collar” applicants to fill open jobs.

“What’s interesting is that this does seem to be the start of a “white-collar recession,” something Americans haven’t experienced since the early 1990s, according to economists,” reported Amy Legate-Wolfe for MoneyWise. “The pandemic led to millions in layoffs for those in traditionally blue-collar sectors, like mining, hospitality, manufacturing, and transportation. Stay-at-home orders meant many were furloughed or laid off with no work for the foreseeable future.”

Legate-Wolfe says that while tech firms and other white-collar employers trim back on their workforce after a hiring spree during the pandemic, blue-collar employers are searching for employees.

“Today is a different story, with companies not just able to return to normal, but need to pick up the slack from the last few years of little to no work. This occurs in every part of traditionally blue-collar industries, from mining to restaurants,” wrote Legate-Wolfe.

U.S. Chamber of Commerce: America’s Labor Shortage

The U.S. Chamber of Commerce published an analysis in January that takes an in-depth look at how the worker shortage is impacting the nation.

“We hear every day from our member companies – every size and industry across nearly every state – they’re facing unprecedented challenges trying to find enough workers to fill open jobs,” wrote Stephanie Ferguson, Director, Global Employer Policy & Special initiatives, U.S. Chamber of Commerce. “Right now, the latest data shows that we have over 10 million job openings in the U.S.—but only 5.7 million unemployed workers.”

The Chamber of Commerce says that employers added 4.5 million jobs in 2022 but at the same time, millions of U.S. workers have left the labor force with nearly three million fewer Americans participating in the labor force today compared to February 2020.

“Right now, there are too many jobs without people to fill them. As a result, businesses can’t grow, compete, and thrive,” wrote Ferguson.

Where did the workers go? Factors for the shortage, says the Chamber, include:

  • Boosted unemployment benefits, stimulus payments and child tax credits boosted bank accounts allowing some to not work.
  • Early retirements
  • Less immigration

Less Than Half of Durable Goods Manufacturing Jobs Filled

The U.S. Chamber of Commerce analysis and Bureau of Labor Statistics traditional blue collar employers looking for workers with December of 2022 unfilled job openings of:

  • 65 percent of durable goods manufacturing jobs unfilled.
  • 40 percent of wholesale and retail trade jobs unfilled.
  • 55 percent of leisure and hospitality jobs unfilled.

“Durable goods manufacturing, wholesale and retail trade, and education and health services have a labor shortage—these industries have more unfilled job openings than unemployed workers with experience in their respective industries. Even if every unemployed person with experience in the durable goods manufacturing industry were employed, the industry would fill roughly a third of the vacant jobs,” wrote Ferguson.

The manufacturing industry faced a major setback after losing roughly 1.4 million jobs at the onset of the pandemic, says the U.S. Chamber of Commerce. Since then, the industry has struggled to hire entry-level and skilled workers alike.

Construction Industry: 80 Percent Can’t Find Qualified Workers

The U.S. construction sector added 25,000 jobs in January 2023 but the Associated General Contractors Association of America (AGC) reports that 80 percent of firms can not find enough qualified workers.

“Construction firms are doing everything in their power to recruit even more people into the industry,” said Stephen E. Sandherr, the AGC’s chief executive officer. “Closing a federal funding gap that puts $5 into college-track programs for every dollar spent on career and technical education will help expose many more workers to high-paying career opportunities in fields like construction.”

The AGC said a recent survey found that construction firms want “federal officials to allow more people with construction skills to lawfully enter the country to work in the industry. And they urged federal officials to boost funding and support for all types of construction-focused education and training programs.”

Construction employment totaled a record 7,884,000, seasonally adjusted, in January, an increase of 294,000 or 3.9 percent from a year earlier. That growth rate topped the 3.3 percent rise in total nonfarm employment.

Nonresidential firms—comprising nonresidential building and specialty trade contractors along with heavy and civil engineering construction firms—added 19,300 employees in January and 179,200 employees or 4.0 percent over 12 months. Residential building and specialty trade contractors together added 5,500 employees for the month and 114,600 employees or 3.6 percent over the year.

“Construction employment and pay gains outpaced the economy as a whole in the past year, showing that demand for projects remains strong,” said Ken Simonson, AGC’s chief economist. “In fact, most contractors would like to hire even more workers and are raising pay in an effort to attract them.”

Job openings in construction at the end of 2022 totaled 359,000, the highest December total in the 23-year history of the data. Simonson said that figure reinforced contractors’ reports that they are seeking far more workers than they have been able to hire, despite the industry’s large job gains over the past year.

Blue Collar Jobs Could See a Mass Worker Shortage Soon

The Associated Press and Times West Virginian published a story on Feb. 21, 2023, that said, “blue-collar jobs could see a mass worker shortage soon.”

Tyler Sasse, founder, and CEO of the Western Welding Academy in Wyoming said that: “It’s been really painful because the Baby Boomers have started retiring out of the blue-collar workforce. We as a society have been preaching college for the last three generations, and these trades have been suffering.”

Tim Aldinger, executive director of workforce development for the Foundation for California Community Colleges, agreed with Sasse and sees the lack of blue-collar workers hurting the growth of emerging industries such as clean energy.

“For the last year and a half, we’ve had more jobs posted than people looking for them. And we are also in a decade-long process where people [nationwide] are opting out of the labor market,” Aldinger said. “And this is particularly prevalent, actually, among working-age men, particularly in jobs that were called ‘blue-collar’ work.”

A pair of studies from the National Renewable Energy Laboratory said that 68 percent of wind energy employers had faced “some or great difficulty” finding qualified applicants.

NPR reported that blue-collar jobs that pay well from ironworkers to drywall installers to sheet metal workers are unfilled with a squeeze on both ends of the labor spectrum as Baby Boomers retire in droves and the younger generation enters the workforce choosing college over learning a trade.

"Parents want success for their kids," Mike Clifton, who taught machining for more than two decades at the Lake Washington Institute of Technology, told NPR. "They get stuck on [four-year bachelor's degrees], and they're not seeing the shortage there is in tradespeople until they hire a plumber and have to write a check."

NPR says that some 30 million jobs in the United States that pay an average of $55,000 per year don't require bachelor's degrees, according to the Georgetown Center on Education and the Workforce.

"There's that perception of the bachelor's degree being the American dream, the best bang for your buck," Kate Blosveren Kreamer, deputy executive director of Advance CTE told NPR. "The challenge is that in many cases it's become the fallback. People are going to college without a plan, without a career in mind, because the mindset in high school is just, 'Go to college.'