In August, 4.3 million U.S. workers quit their jobs, according to Department of Labor (DOL). Food services lost 892,000 workers, 721,000 employees quit the retail industry and even more workers left education and healthcare. The start of the pandemic saw record high unemployment and by July 2021 the United States hit another record high – 11.1 million jobs available.
“Certain sectors have really been hit hard,” said John Restrepo, principal, RCG Economics. He added that one area particularly affected is low-wage, high-touch occupations, like retail and restaurants. “There’s a shortage of those kinds of workers. It’s a combination of fears of COVID, combined with relatively low wages and high costs of daycare or the shortage of daycare workers.”
Without daycare, some parents can’t work and the costs of working—day-care, transportation—must be balanced against low wages and fear of COVID.
Pre-pandemic there were approximately 1.5 million people in the Nevada workforce. During the shutdown, Nevada’s unemployment rose to 30 percent. It was expected that approximately 500,000 would remain unemployed after businesses reopened, and that’s what happened.
“Since March of 2020 we’ve been recovering jobs and so we’re now at about 7.5 percent unemployment,” said Elisa Cafferata, director, Nevada Department of Employment, Training & Rehabilitation (DETR). That leaves around 117,000 Nevadans unemployed. “We’re not quite back to pre-pandemic levels, which were at a record low unemployment, but we’re recovering,” Cafferata added.
Jobs actually came back faster than the people to fill them. Most employers expected when supplemental federal weekly unemployment benefits ran out, workers would return, but there hasn’t been a surge of returning workers even after supplements ended. Even states that stopped supplements to encourage individuals to return to work didn’t see large numbers returning.
“It’s more complex than folks just wanting to stay home and watch TV,” said Restrepo. “It’s the nature of the jobs, the quality of the jobs, the stress of the jobs, all those things come into play.”
In addition, a large number of Baby Boomers chose to retire earlier than expected, rather than dealing with stressful work environments or the pandemic. “Everything has led to relatively low labor force participation,” said Restrepo.
The Great Disruption
“Saying we have a shortage of workers might be too simple an explanation,” said Cafferata.
What’s happening now happened after the last recession. The workforce changes to meet the changing conditions caused by the economic crisis. Cafferata said 70 percent of those unemployed in spring 2020 have found new jobs, usually after looking for better pay and more flexible hours. Since some individuals haven’t returned to work, there are shortages in those sectors. Specifically, neither healthcare nor child-care have returned to pre-pandemic levels.
“Because, largely, it’s women who have to take care of their kids or family members, they aren’t coming back yet because childcare isn’t there to support them,” said Cafferata. Conversely, as many as 50,000 jobs aren’t returning either, many of them in hospitality. While in northern Nevada there are more hospitality jobs than workers to fill them, in Clark County there are fewer hospitality jobs and some workers will need to retrain to find new jobs. That can be difficult after decades in the same position. If automation is replacing those workers, their skills may no longer be marketable.
Workforce shortages are also caused by skills gaps. “In addition to the scenario of having less individuals available for work, there’s also the situation where the work is becoming much more complex, requiring education beyond high school,” said Dr. Federico Zaragoza, president, College of Southern Nevada (CSN).
Pandemic workplace changes, from business closures in 2020 to social distancing and mask and vaccine mandates, affected more low-skilled jobs than highskilled.
“What the pandemic exposed was a lot of socioeconomic structural issues,” said Restrepo. “The vulnerability of low-wage, high-touch occupation workers has become daily news, along with unprecedented numbers of those workers walking off the job. Fast food places [are] posting closed signs because there’s no crew.”
Healthcare, manufacturing, logistics and distribution and the supply chain have all been disrupted. Nationwide, the transportation industry is short one million truck drivers.
“It will all be cleared up over time, when the market settles, when the economy settles,” said Restrepo. “We’re definitely going through a disruptive period right now.”
Paradigm Shift
One day everything was business as usual, the next it wasn’t. COVID disrupted normal working lives, then introduced a host of work/life possibilities. Individuals were suddenly working from home, or not working at all, if wages weren’t commensurate with costs of actually going to work, like daycare and transportation. Workers were deciding whether going to work was worth it.
COVID focused attention on work/life balance. People began making quality of life changes “Maybe they’re not deciding that they’ll never go back to work,” said Restrepo. “But they’re being choosier about what they go back to.”
Some jobs, despite paying well, remain empty. Long-haul trucker positions aren’t as popular as they used to be, despite being well paid and relatively safe, said Restrepo. “There are certain jobs people don’t want to do anymore. They’re not as attractive as they used to be. People are making different choices now than they may have made 10 years ago,” he explained.
Work was once considered inevitable. People found jobs and kept them, even if they didn’t like them, if wages and benefits were good. “People aren’t like that anymore. It’s one of the cultural shifts we’re seeing coming into play. [Those shifts] were already coming, the pandemic just accelerated things,” said Restrepo.
Education
Some industries, like hospitality, may be right-sizing. Because the economic disruption has lasted so long and, is still to some extent continuing, businesses have had to find new ways to operate.
The pandemic pushed artificial intelligence (AI) and automation into use faster than expected. Changes were already underway. Workers were already being displaced or retrained to work with robots and automation as technology phased out their jobs. The pandemic sped up those changes.
The socioeconomic side of workforce shortages includes education, race and gender. There’s higher unemployment among people of color than among the white population, and higher numbers of women than men. Some of that is due to roles that haven’t changed. As Cafferata indicated, more women than men left the workforce because of the unavailability of childcare. Shortages caused by such factors are expected to decline over the next year as the economic disruption settles.
Certain high-level skill sets are also in short supply. “We’ve lost several projects in the last six months due to lack of workforce and adequately trained workforce,” said Mike Kazmierski, president and CEO, EDAWN. “As we have continued to move our economy toward higher wages and better pay, obviously employers expect skills to go with it. We have been a slow state to integrate all STEAM skills, the STEM-plus-arts, into our education system at the lowest levels. So, what pops out at the other end is not what our employers need, and our community college can only do so much to get them ready.”
Individuals whose skills match today’s job requirements are in high demand. Areas like healthcare, information technology and advanced manufacturing are becoming more complex, requiring specialized skills, said Zaragoza. There are also individuals with advanced skill sets that still don’t match the sectors with critical workforce needs.
Workforce development needs to fill current jobs and train for the future. Kazmierski said the fix needs to start with education. He believes the state is grossly underfunded in that arena and doesn’t appreciate how important an educated workforce is both now and, in the future.
“In the past that hasn’t been important from a state perspective,” said Kazmierski. When travel and tourism paid $60,000 a year for valet attendants parking cars, higher education didn’t seem as vital to economic development. Gaming and tourism are important to Nevada’s economy but, while the industry made up 20 percent of northern Nevada’s economy in the 70’s, today it’s 4 percent.
Over the last 10 years a significant number of those jobs have been replaced by automation and AI. Losing those jobs means, “You have people who have not taken the time to get educated or upskilled. We have here twice as many jobs as we have people on the unemployment rolls,” said Kazmierski. Unfortunately, it’s not an even trade; the people available don’t necessarily fit the jobs available.
Workforce development agencies work together to meet employer needs. DETR works with the Governor’s Office of Economic Development (GOED) to train workers for companies GOED helps recruit to Nevada. Both partner with the Business and Industry Department to create apprenticeship programs, like software development, recently approved by the state. Internships and apprenticeship programs are vital to workforce development.
Industry groups work with community colleges like Truckee Meadows Community College to create training programs that build the necessary skilled workforce industries need. Often those programs fill gaps right away as students work and are paid as they learn.
In TMCC’s certified nurse’s aide partnership with Renown, “Students are paid for 36 hours a week, $15 an hour, that includes their class time,” said Karin Hilgersom, president, TMCC. For people who want education but can’t afford not working, it’s a solution that may lead to a fulltime position at Renown.
It’s not necessarily that easy. TMCC’s funding needs aren’t being completely met. “Where we really struggle is health careers, because that training is very expensive,” Hilgersom said. The college has received quite a bit of funding for the manufacturing program but they need more targeted funding for health careers. COVID highlighted the need for programs like respiratory therapy. But, health careers are expensive to teach—a nursing clinical, for example, is capped at six students.
Even before the pandemic there was a shortage of nurses. “We opened a brand new facility on our Henderson campus, with a focus on health occupations,” said Zaragoza. “Our goal is to, within five years, almost double the number of nurses, health and STEM professionals we’re producing.”
Bootcamps can teach skills quickly and put students to work. Workforce development agencies and community colleges are teaming up to create computer coding bootcamps to meet current industry needs. Students can choose to earn associate degrees after bootcamp. To meet tomorrow’s needs, computer literacy needs to be incorporated into all levels of education and all degree fields.
“We need to make sure graduates are computer literate as they exit community college and higher education in general,” said Zaragoza. “Making sure graduates have essential skills employer’s need is all part of the work we’re doing. We can’t afford to have any part of our community left behind because that contributes to the skill gap and labor shortages.”
Closing skills gaps is essential. According to the Brookings Institute, by 2030, 40 percent of the positions held in 2020 will be lost to automation. Automation advanced significantly as employers relied on it during COVD when workers couldn’t or were afraid to work.
By the Numbers
Currently, there are more jobs than people to fill them in Nevada. In skilled positions, workforce shortages are even more pronounced. Wages figure into the “Great Resignation”, as the exodus of workers this year is being called. Workforce and economic development agencies are recruiting industries that pay higher wages but also demand more skills. Jobs in manufacturing, technology, logistics and distribution that paid $9 or $10 an hour 10 years ago pay $25 today.
“What that tells you is two things,” said Kazmierski. “One, the job is different, it’s no longer primarily picker and packer. It’s more automated, there’s more machines involved and there are fewer people involved. The demand for that job forces the company to pay much more to get the talent they need,” he said.
The workforce shortages in northern Nevada’s hospitality sector led to a partnership between TMCC and Grand Sierra Resort. Using college education as a benefit and a way to incentivize recruitment of employees, TMCC began offering courses onsite for staff. Eventually benefits may extend to dependents.
Having 10.4 million open jobs in the U.S., and businesses closed because they’re too short-staffed, puts downward pressure on an economy that’s 70 percent driven by consumer spending. When large numbers of consumers consider whether they’d rather have a new boat or spend time with family, things change. When consumers spend less on nonessentials, fewer nonessentials are produced and fewer retail workers needed. Downsized retail employees will also likely spend less.
Some workforce changes are generational, with Gen Y and Gen Z accelerating social and cultural trends. We may actually be seeing a societal shift, said Restrepo; we won’t know until the economic disruptions settle.
“What have we learned from the economic disruption wrought by the COVID pandemic?” asked Restrepo. “What does it mean to have a resilient economy? How do you define resiliency? How do you define quality of life? Can resiliency include the types of jobs created and the type of economy, management of resources like water, land and people? How do we reinvent ourselves?”
People often operate out of fear when economic disruptions cause change. And, as Restrepo indicated, there are many unanswered questions about what the future holds. What if the new structure doesn’t work? What if the changes don’t last or are harmful? Changes caused by COVID might have been less frightening than COVID itself and, while the pandemic held people’s attention, maybe they didn’t have time to fear changes in workforce and economy.
“So, what’s the reaction to fear?” said Restrepo. Is it to come together for the greater good or hunker down in individual silos? “These are complex questions, not easily answered.”
The answers, however, will affect workforce development for the foreseeable future.
