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Anticipated Baby Boomer retirement surge seems to have begun at the same time as the pandemic, resulting in ongoing shortage of workers

CENTRAL OREGONIAN - Help wanted signs started showing up all over town in the spring as businesses reopened but workers were not plentiful.

The Oregon Employment Department announced a recent Back to Work campaign this past week where multiple events were held throughout the state.

The goal, as the campaign's namesake suggests, was to encourage people who had left the workforce because of COVID-related layoffs to find employment. The reason for the push, primarily, is that industries throughout the state are struggling to find workers for vacant positions, which is challenging businesses locally and throughout Oregon.

The Employment Department highlighted the unfilled jobs issue in detail in a recent media statement, issued Sept. 8. The statement acknowledged that the pandemic continues to contribute to the issue but notes that it is not the only catalyst for the workforce shortage.

"Before the pandemic, the most common reasons employers gave for difficulty filling vacancies were either they had too few or no applicants or they couldn't find candidates with the mix of skills, experience and training for the job."

Those remained the top challenges employers faced from summer 2020 – when businesses reopened – and spring 2021. However, the number of job vacancies skyrocketed to a record of 98,000 in the spring.

The Employment Department went on to note that fear of contracting the virus and relatively high unemployment benefits had kept people from returning to the workforce, but the pandemic-related issues were not the primary cause of the worker shortage. In fact, employers said only 10-20% of hard-to-fill jobs were most affected by those issues.

This data was reinforced by a new paper authored by economists at Columbia University, the University of Massachusetts Amherst and the University of Toronto, which found that ending unemployment benefits did not translate into immediate moves back to work. Only one out of eight unemployed individuals in 26 states where benefits were ended in June found a job by August.

The other seven out of eight unemployed people gave other reasons for not returning to work. These included a lack of in-person school in spring or summer or lack of available childcare slots; worker health concerns amid the pandemic; relocation or change of industry; and retirement.

Locally, employers are facing a similar workforce shortage. According to Damon Runberg, Central Oregon's regional economist for the Employment Department, Deschutes County has one unemployed person per job ad.

"That is slim pickings, bare bones if you are an employer looking for quality applicants," Runberg said, adding that it is the lowest ratio in Central Oregon history. Crook County's situation is not as dire, with 3.85 unemployed people per job ad as of July 2021, but it is still substantially lower than February 2020, the month preceding the pandemic, when the ratio was 6.51 to 1.

Runberg acknowledges that the relatively high unemployment benefits, particularly the monthly benefits provided to all Americans by the federal government, was a deterrent for returning to work. But the bigger issue locally, he said, is the sheer volume of demand, which is unprecedented in Oregon.

"The hard part is it's hard to qualify how much of these (workforce shortage) factors (highlighted in the Employment Department statement) are contributing," he said, "but we know that all of them are."

Among the reasons, Runberg believes retirement might be the biggest.

Currently, the two industries most affected by the workforce shortage are leisure and hospitality (restaurants, motels and tourism facilities) and retail trade.

"Those are the two where it is the hardest to find workers and the reason why is they are the lowest paying industries on average," Runberg said. "We are seeing a pretty sizeable transfer from some of these lower paying industries to higher paying ones (such as construction, professional business services and health care)."

Compounding the problem, an expected retirement surge from the Baby Boomer generation seems to have begun at the same time as pandemic.

"Us labor economists have been talking about it for years. It seems like we're there," Runberg said. "There is just a sheer numbers gap. We have a ton of people retiring soon and actively, and we don't have as many young people in the pipeline."

Until enough younger people enter the workforce to bolster the hiring pool, the problem is expected to persist, likely beyond the pandemic. And while Runberg could not offer any concrete solutions, he did point to some possible ideas for businesses to consider. They include increasing wages for entry level jobs, improving benefits, or investing in technological improvements that enable businesses to complete jobs with less staff.


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