Labor shortages remain and likely will persist even if the US goes into a brief and potentially mild recession. Even as businesses are starting to retrench in terms of production, they know they will still need to find more workers.

For one thing, the growth in the working-age population (ages 25 to 54) is slower than the growth in those who are retirement age, according to the Congressional Budget Office. Also, many people who retired early during the pandemic are unlikely to return, as evidenced by the continued weakness in labor force participation rates among workers 55 and over. Further, there were an estimated 888,000 fewer immigrants in 2021 compared to 2016, due in part to stricter immigration laws enacted even before the pandemic began, according to United Nations net migration data.

Moreover, many people are still unwilling or unable to work due to lingering pandemic effects. Some still fear infection or have “long-covid” symptoms that are impairing their ability to work. Others still have childcare and adult care challenges. And many workers are still quitting to find better jobs and opportunities. Indeed, fewer people are willing to work two or more jobs given rising wages, especially for job-switchers.