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Op-Ed: Labor Shortage May Imperil Growth

This article originally appeared on the Wall Street Journal on September 17, 2019.

Good help is hard to find—and increasingly so in today’s economy. According to a monthly survey by the National Federation of Independent Businesses, “a record percentage of small business owners reported having difficulties finding qualified workers in August.” It’s been the top problem in the survey since January 2018. Policy makers need to listen.

Fifty-seven percent of last month’s respondents, including 89% of those “hiring or trying to hire,” found “few or no qualified applicants for the positions they were trying to fill.” The construction industry had the highest share of owners reporting hiring difficulties at 68%; manufacturing was second at 59%. With the unemployment rate near a 50-year low and a record 157.9 million Americans employed, there are simply fewer workers available.

Partly as a result, average monthly job growth as reported by the Bureau of Labor Statistics has slowed, from 223,000 last year to 158,000 so far this year. Some experts have seized on this decline as evidence that the longest economic recovery on record is losing steam. And it’s true that a global economic slowdown, the Fed’s actions on interest rates, and concerns about the trade war with China have dampened the recovery. But the tight labor market is the elephant in the room.

Click here to read the full article.

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