Next, Why So Many Jobs and So Few Workers?

(This week, we'll focus on macro trends in the near future of work. Next week, Work+AI, round 2.)

If you’re not working, you should know what’s happening in one of the weirdest job markets imaginable. If you are working… same deal.

Here are three takeaways:

• No economist, labor expert, or industry pundit has ever seen the rules of work change so dramatically so quickly as they have today. 
• This is the best job market for young people in 70 years. (Read that to your teenager.) And with over 9 million open jobs, there’s just generally a lot of available work all around.
• This may be the new abnormal for years to come, with lots more jobs than workers. Or it may not, if we talk ourselves into the recession that still hasn’t happened.

Here is what’s happening, all at once.

• Recovery from a global pandemic, then recovery from dramatic inflation.
• A huge worker shortage, due to immigration policies and Boomer retirement, plus a generational change in work attitudes, as young people feel they have more choice. Even government agencies can’t find enough workers.
• Huge skills shortages in fields like healthcare, hotels and restaurants, clean energy, and digital engineering like microchips.
• Gig workers are returning to real jobs. No, they’re not.
• And later this year we’ll see the dramatic impact of the AI tsunami (covered in the next Next newsletter).

What’s a Mismatch, and What Does It Mean to You?

In last year’s Next Rules report, I pointed to the already-clear workforce mismatch that laid the fracture-lines for 2023. Sources like JP Morgan Chase and Axios were already foreshadowing a “forever jobs crisis,” a workforce mismatch driven by a dramatic gap between worker demand and available trained workers. 

The phrase “Great Mismatch” was actually coined back in 2011 by then-The Economist journalist Matthew Bishop , in an article that included interviews with me and with my father. The post-Great Recession work market was often lumpy: Jobs over here, workers over there. The global economic downturn accelerated that mismatch by contributing to the economic devastation of rural regions, where there were plenty of workers but little work. As industries like hi-tech and healthcare returned to growth, jobs returned to cities, but far less to suburban and rural markets. 

Today in the U.S., the shortages are like leaks sprung in a dike.

• Over 100,000 physicians left their field in 2021: At a half million dollars to train, that’s over $50 billion in replacement cost to society. 
• We're short at least 36,000 teachers, with another 300,000 teachers in positions they’re not trained for.
• Construction workers out of work in places like San Francisco, but the U.S. is short a half million workers in other parts of the country. 
• 2 million unfillled hospitality and leisure jobs, a mismatch that’s been long developing.

The framing of the Great Mismatch has been revived again in the pandemic recovery, as record job openings were met with far fewer trained or available workers. There is again rampant speculation that this will be a “forever shortage” of workers and certain skills. But even that’s a guess: It’s unpredictable what could happen in the recession we still seem to be trying to talk ourselves into.

What About All Those Tech Layoffs?

History doesn’t repeat itself, but sometimes it’s deja vu all over again. The tech boom of the late 1990’s led to the tech bust of 2000, and the over-purchasing frenzy for Internet infrastructure led to the “rationalization” of equipment (that means throwing it out the window), as tech spending fell off a cliff.

Then along comes a global pandemic, and the over-purchasing frenzy for communications infrastructure has led to the “rationalization” (layoffs) of the programmers that tech companies “over-hired.” But while hundreds of thousands of workers lost their jobs, there is still plenty of other work — just not in Silicon Valley.

My take: Too many tech companies treat this as an engineering problem, not a human problem. Many already hide behind contingency workers (what author Mary Gray calls ghost work), whom they can lay off without having to legally call it a layoff. So rather than compassionately retraining the workers they have, they discard them — and then will hire different workers in the next boom.

Who’s the Current Situation Good For?

A workforce mismatch is good for workers because a tight job market increases worker power, to get better pay and better jobs. And it’s good for the employers that, unlike tech companies, retained their workers rather than laying them off. 

But just because someone has a job doesn’t mean they have a good job that pays well. (Read Zeynep Ton 's book for more.) Almost half of Gen Z workers are doing some kind of outside work so they can pay the bills. That means that despite some wages increasing, there are still a lot of under-paying jobs out there — often because employers can pretend that “productivity” statistics still matter.

And just because there are open jobs doesn’t mean the job search is easy for everyone. Women re-entering the workforce are having an especially hard time. And the government numbers usually ignore discouraged people who stop looking for a job.

What Should We Do, Next?

While Matthew Bishop focused in 2011 on the contention by certain economists that the “structural unemployment” of that time would persist (no global pandemic was on the horizon then), the remedies he suggested are completely applicable today: “...[S]tructural reforms, such as changing education to ensure that people enter work equipped with the sort of skills firms are willing to fight over, adjusting the tax system and modernising the welfare safety net, and more broadly creating a climate conducive to entrepreneurship and innovation.”

Other necessary solutions are blindingly obvious, they're just hard issues for us to reach consensus.

• We need more immigrants, plain and simple. They are willing to work at the jobs our young people no longer want, like hospitality and sanitation.
• Remove the college degree requirement in as many job listings as possible. Even if President Biden’s intention to create more non-degree jobs is a political decision, it’s still a critical move in the right direction.
• Encourage kids to enter the trades. (Parents and high-school counselors, I’m talking to you.) Sure, you have to tell your friends your kid is a plumber, not a programmer. But the work is assured, and the pay is really good. Besides, programming doesn’t have the job security it once had — as code starts writing code.
• Lots more apprenticeships and training, in fields like semiconductors.
• Are you a laid-off tech worker? Consider public service, and check out tech2gov.
• If you're having a hard time finding a job, and you want to take a career planning course, check out our "What Color Is Your Parachute?" online course here. (If you need a half-off code, or even a free code, just email Kersey at admin@eparachute.com.) And if you’re a woman re-entering the workforce, check out Mom Relaunch.

-gB Gary A. Bolles

I’m the author of The Next Rules of Work: The mindset, skillset, and toolset to lead your organization through uncertainty. I’m also the adjunct Chair for the Future of Work for Singularity Group. I have over 1.3 million learners for my courses on LinkedIn Learning. I'm a partner in the consulting firm Charrette LLC. I’m the co-founder of eParachute.com. I'm an original founder of SoCap Global, and the former editorial director of 6 tech magazines. Learn more at gbolles.com