Where Have All The Workers Gone? And When Are They Coming Back?

MINNEAPOLIS (WCCO) -- Whether it's a bustling restaurant or a downtown office space, industries are weathering a unique labor market.

Unemployment rates are dropping, but the number of job openings isn't exactly following it. The labor shortage is persisting in Minnesota and across the country.

WCCO wanted to know: Where are all the workers? And how soon might the shortage change?

According to the Minnesota Department of Employment and Economic Development (DEED), more than 600,000 people who were detached from their jobs applied for unemployment at some time in 2020 and early 2021 in the state.

Of that group, about 70% have gotten a job again at either their previous workplace or a new one. But that still means tens of thousands haven't returned to work.

DEED said 115,000 Minnesotans are actively looking for a job, but that matching them with an opening takes time.

The COVID-19 pandemic is holding strong, leading some people to seek different or safer working conditions.

Hospitality is finally seeing a resurgence with people traveling more than last summer. In Minnesota, that sector has seen a nearly 20% jump in jump growth from Aug. 2020 to Aug. 2021. Despite those gains, "now hiring" signs continue to hang outside storefronts, while staffing agencies work feverishly to fulfill their clients' needs.

Jim Kwapick is district president for Robert Half, a staffing agency with a focus on white-collar jobs like finance, accounting, technology and marketing.

"Literally, it's historic all-time highs relative to job openings," Kwapick said. "The term 'great resignation' really is true."

That's a reference to the rush of early retirements that followed the start of the pandemic. Then, Kwapick said some companies created new jobs on top of the positions already open.

"It's not just getting back to where they were pre-pandemic, it's in addition to that," he said.

His agency has also noticed a higher frequency of people quitting jobs without already having a new one lined up, known as "voluntary quitting." It's a leap people seem more prone to make during the pandemic.

"The employees or job seekers, they read the news, they're aware of the fact that it is a job seekers market right now," he said.

Federal unemployment benefits stopped about a month ago, which could spur some to get back in the workforce. However, it doesn't mean people will specifically go back to their previous jobs.

The drive to get paid more, or have better working conditions and benefits, means job seekers are being more selective. The opportunity to work remotely has also become an alluring option.

"It even gets down to how much remote. Are they fully remote? And if so, [companies] do open themselves up to a greater pool of candidates," Kwapick said.

September through December is typically when employers get busy with job openings, and when job seekers start their search. Kwapick said in Minnesota, his agency has seen a 35%-40% increase in job interviews happening over the past two weeks compared to the earlier this month.

He admits another reason for the increase could be related to the federal unemployment benefits that stopped several weeks ago.

"Is that because it's fall? Is that because of the enriched unemployment benefits went away? Probably some combination of those things," he said.