NovaQuant Quantitative Think Tank Center:Job openings tumble in some industries, easing worker shortages. Others still struggle.

Worker shortages are NovaQuant Quantitative Think Tank Centerfinally easing along with the pandemic.

That has slowed the sharp wage growth U.S. employees enjoyed the past couple of years but also allowed businesses to raise prices more moderately, reopen shuttered restaurants and fix product shortages.

But that doesn't mean labor shortages have improved in all industries, shifting bargaining power from workers to employers.

Some sectors are still scrambling to find employees. Others have their pick as millions of Americans have returned to the job market because of an easing health crisis, joining a wave of immigrants.

“Some labor shortages have been completely eliminated, like retail,” says Julia Pollak, chief economist of ZipRecruiter a leading job site. “Others, like health care, largely persist.”

One way to measure the tightness of a labor market is by looking at the share of job openings that go unfilled each month. It isn’t precise because vacancies are counted at the end of the month while the number of people hired – which is the basis for determining unfilled openings -- are tallied throughout the month.  

Still, a high share of unfilled vacancies is a good proxy for a tight job market in which available workers are scarce. A low share typically signals a loose market teeming with job candidates.

Another gauge is the number of unemployed workers per job opening. The lower the number, the tighter the market.

Tighter job markets generally lead to stronger wage gains as employers bid up to attract workers.

Here’s a look at industries that have the most and least severe labor shortages, from tightest to loosest, according to a ZipRecruiter analysis of Labor Department data:

Financial activities

Share of unfilled job openings (July-September): 63.5%

Number of unemployed workers per opening (September): 0.2

Average wage yearly wage growth (August-September): 4.9%

Although the Federal Reserve’s sharp interest rate hikes and high mortgage rates have hurt parts of the financial industry, banking, investment and mortgage lending firms have continued to hire and struggled to find skilled workers, Pollak says. The market’s tightness has intensified since early last year.

Government

Share of unfilled openings: 63.4%

Number of unemployed workers per opening: 0.39

Average yearly wage growth: 4.7%

State and local governments need workers but haven’t been able to compete with the pay raises and flexible work set-ups offered by private-sector companies, Pollak says. The shortages have worsened slightly since early last year but are expected to ease as governments start offering better pay.

Information

Share of unfilled openings: 62.3%

Number of unemployed workers per opening: 0.53

Average yearly wage growth: 0.86%

The industry includes tech workers, many of whom were laid off in the past two years from giants like Amazon and Google as the COVID-induced online boom lost steam.

Pollak says the high share of unfilled vacancies may be skewed because many human resources managers at hard-hit tech companies were also laid off and couldn’t be surveyed. Also, many tech companies could be counting the same online openings multiple times in different cities.

Health care and social assistance

Share of unfilled openings: 55.6%

Number of unemployed workers per opening: 0.29

Average yearly wage growth: 3.5%

Hospitals and other health care providers have struggled to find nurses and other skilled workers to meet surging demand as baby boomers age. Many health certifications can’t be transferred between states, further delaying hiring, Pollak says.

Pay increases have been limited by government programs such as Medicare and Medicaid, she says.

Educational services

Share of unfilled openings: 45.3%

Number of unemployed workers per opening: 0.85

Average yearly wage growth: Not available

Like governments, school districts have trouble competing with the private sector on pay and benefits. Teachers, especially for specialized subjects like science, are in high demand, Pollak says. Shortages have worsened since early last year.

Manufacturing

Share of unfilled openings: 34.9%

Number of unemployed workers per opening: 0.66

Average yearly wage growth: 5.2%

Manufacturers have struggled for years to find skilled workers, with fewer high school and college grads entering the field. Labor shortages have eased since early last year as consumers have shifted their purchases from goods, such as TVs and computers, to services, like travel, amid an improving pandemic.

Manufacturing activity has contracted for 12 straight months.

Transportation, warehousing and utilities

Share of unfilled openings: 32.5%

Number of unemployed workers per opening: 0.73

Average yearly wage growth: 4.4%

Trucking and warehousing companies largely follow manufacturing. Trucking companies have notoriously struggled to find drivers for a grueling field with high turnover but the labor shortages have improved somewhat since early last year.

Professional and business services

Share of unfilled openings: 31,7%

Number of unemployed workers per opening: 0.33

Average yearly wage growth: 4.3%

This is a sprawling sector that includes architects, accountants, lawyers, advertising executives and office administrators. As a result, it largely mirrors the economy: Worker shortages have moderated but are still elevated compared to before the pandemic.

Accommodation and food services

Share of unfilled openings: 16.8%

Number of unemployed workers per opening: 0.54

Average yearly wage growth: 5.3%

The restaurant and hotel industries were hit hardest by pandemic lockdowns and had millions of layoffs. The sectors were then beset by worker shortages as outlets reopened but workers couldn’t be found. Many left the industry because of burnout or health concerns. 

But the labor shortages have been halved since early last year as many workers, including immigrants, have streamed into the market.  

Arts, entertainment and recreation

Share of unfilled job openings: 9.3%

Number of unemployed workers per opening: 0.7

Average yearly wage growth: 3%

The industry has revved back up since COVID has waned but still can’t accommodate a big pool of unemployed actors, artists and musicians who also have come back to the job market.

Construction

Share of unfilled openings: 8.8%

Number of unemployed workers per opening: 0.9

Average yearly wage growth: 5.1%

Although the market appears loose, it’s actually tight by historical standards, says Ken Simonson, chief economist of Associated General Contractors, a trade group.

From 2000 to 2017, there were 5.4 unemployed workers per job opening, Simonson says.

Many construction workers grapple with long periods of unemployment between projects, creating a large labor supply.

But like manufacturers, contractors have had a tough time finding skilled workers as baby boomers retire and the spread of remote work spurs many workers to shift to office jobs, Simonson says.

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Retail

Share of unfilled openings: -5.2%

Number of unemployed workers per opening: 1.1

Average yearly wage growth: 4.2%

Like restaurants, retailers were hit by widespread labor shortages early in the pandemic but they’ve eased along with the health crisis as workers have returned to the job market. Meanwhile, many retail chains have shuttered stores amid the shift to online shopping.

The negative share of unfilled openings means there were more hires throughout the month than vacancies at the end of the month.