Job shortage? ‘Absurd’ says economist, who calculates US could add 28 million more jobs

Despite the number of signs asking for help in nearly every store today or notes encouraging patience in restaurants due to staff shortages, a new report finds the US is far from having a real shortage of workers.

A new report from the Roosevelt Institute notes that the US could add 28 million additional jobs over the next decade if there is sustained and strong demand for labor. That is about 10 percentage points higher than the The Congressional Budget Office’s Estimation of Maximum Employment.

“It is absurd to say that there is a labor shortage in an absolute sense. There are a lot of people sitting on the sidelines who can and will enter the labor market if we just keep the current shortage,” says JW Mason, an author of the report and an economist at the Roosevelt Institute.

To determine maximum employment, Mason and team calculated the size of the latent labor force by essentially asking how many people could plausibly work in the U.S. by taking into account employment figures for race, gender, education and age. In doing so, they found that there is much more slack in the labor market than conventional measures of unemployment suggest.

“Essentially, if you could close the racial employment gap, close the gender gap outside childcare, and just bring the education and age disparities back to where they were in the relatively recent past, that would be you 28 million additional employees,” Mason told Fortune.

That’s not to say that workers don’t face many barriers to employment, including systemic inequalities and discrimination. The report shows that black Americans, women and the less educated are more likely to be at the back of the queue.

“Employment discrimination is very important and we should not lose sight of that, but there are a lot of other barriers that make it easier for some people to get into work than others,” says Mason. That includes factors such as flexibility of employee schedules, location, and even background.

It’s worth noting, though, that the report estimates that adding these 28 million jobs would require an average annual employment growth rate of 2.7% — a rate the US hasn’t seen since the 1970s. “Just because we haven’t seen employment grow at this rate in recent years doesn’t mean it’s impossible,” the authors write.

And achieving this level of true full employment will be disruptive to employers. Companies and corporations may need to relax their standards or work much harder to recruit employees.

“Maybe you should consider people without the college degree you thought you needed, or people without as much experience as you thought you needed, or people who will be more picky about their schedule,” says Mason.

“People are used to a buyer’s market for labour, and that takes some getting used to. But adapting a little doesn’t mean an emergency, and it doesn’t mean we should deprive people of the opportunity to work just because it makes employers’ lives a little easier.”

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