In this article, we will look at the 15 US states with the highest labor shortages. We have also discussed the implications of the labor shortages for businesses. If you want to skip our detailed analysis, head straight to the 5 US States With The Highest Labor Shortages.
The labor shortage gripping the United States is starkly evident: with 9.5 million job openings but only 6.5 million unemployed workers, a deficit of 3 million remains. Despite the addition of 4.5 million jobs in 2022, the shortage persists, exacerbated by declining labor force participation rates since before the pandemic. This shortage spans industries and states, impacting businesses of all sizes and types, hindering their ability to fill essential roles. It is worth highlighting that healthcare is one of the most affected industries due to labor shortages in the US.
Several factors contribute to this crisis. Early retirements increased during the pandemic, with over 3 million adults opting for early retirement by October 2021. Simultaneously, net international migration plummeted, slowing population growth and constraining the labor pool.
Moreover, shifts in economic dynamics, such as increased savings due to enhanced unemployment benefits and stimulus checks, compounded the shortage. The “Great Reshuffle” saw record quit rates as workers sought better opportunities or opted for entrepreneurship. While solutions are being pursued, the multifaceted nature of the shortage demands comprehensive approaches addressing retirement trends, immigration policies, childcare accessibility, and economic incentives to entice workers back into the labor force.
Owing to the major labor shortages in country, several businesses across the country have been disrupted. Thousands of businesses have reduced hours or closed due to unfilled positions, causing a ripple effect in various industries. The scarcity of workers not only slows production but also leads to price pressures on goods ranging from cars to household essentials like baby formula and cleaning products. To read more about skilled labor shortages, see the countries with the highest labor shortages in the world.
The situation is dire, with over 50 million US workers leaving their jobs in 2022, the highest number on record. Economists have termed it “quiet quitting”. However, there’s nothing subtle about the challenges facing America’s workforce. Industries such as transportation, hospitality, manufacturing, agriculture, and healthcare are particularly hard-hit, struggling to find essential personnel like truck drivers, hotel staff, and healthcare technicians.
It is also worth highlighting that a substantial portion of these labor shortages are essentially skill labor shortages. To address these skill shortages, many companies have been trying to bridge the gap through several initiatives.
For example, Amazon.com, Inc (NASDAQ:AMZN) offers free education and training programs to equip learners with AI skills for tomorrow’s workforce. With AI transforming various industries, including finance, IT, sales, and marketing, demand for AI-trained professionals is growing. A survey conducted in four US regions revealed that over 60% of educators believe AI skills are essential for future high-paying careers. However, despite this recognition, many educators lack resources to teach AI effectively, with 69% reporting a shortage of necessary materials and training programs. To read more about AI transformation, see industries being revolutionized by AI and automation technologies.
The study also suggests a modest increase in AI courses in US schools, expected to rise by approximately 1.5 times in the next five years. Recognizing the need to bridge this gap, Amazon.com, Inc (NASDAQ:AMZN) launched its AI Ready initiative, aiming to provide free AI skills training to 2 million individuals by 2025. The initiative aligns with findings that show strong demand for AI talent, with potential salary increases of up to 47% for workers with AI skills. Additionally, Amazon.com, Inc (NASDAQ:AMZN) supports educators and students through various programs, including funding STEM curriculum, offering scholarships, and providing career exploration opportunities.
Looking ahead, Amazon.com, Inc (NASDAQ:AMZN) has partnered with industry experts to predict AI-enabled careers of the future. These roles span diverse sectors, from precision farming analysts leveraging AI to optimize agricultural processes to cosmic reality engineers visualizing distant galaxies using advanced AI systems. As AI continues to reshape industries, preparing students and professionals with foundational AI skills becomes crucial. By investing in education and training, Amazon.com, Inc (NASDAQ:AMZN) aims to empower individuals for a tech-enabled workforce, fostering innovation and addressing the evolving demands of tomorrow’s job market.
On the other hand, Apple, Inc (NASDAQ:AAPL) has launched updated professional training and certifications for IT support and management, responding to the growing demand for skilled technical staff. With projections indicating faster-than-average growth in computer and information systems occupations from 2020 to 2030, the need for proficient IT professionals is evident. This demand is further fueled by the increasing use of Apple, Inc (NASDAQ:AAPL) products like iPhone, iPad, and Mac in workplaces. The redesigned training is now available online, providing self-paced learning opportunities.
The training comprises two sequential courses: Apple, Inc (NASDAQ:AAPL) Device Support and Apple, Inc (NASDAQ:AAPL) Deployment and Management. These courses equip learners with essential skills for supporting and managing Apple, Inc (NASDAQ:AAPL) products, covering topics such as device deployment, management, and security using mobile device management solutions. Upon completion of each course, learners can take certification exams to demonstrate their competence, enhancing their job prospects in the competitive IT landscape.
To ensure accessibility, Apple, Inc (NASDAQ:AAPL) offers scholarships for exam fees through its Community Education Initiative (CEI) at partnering institutions. Additionally, the Mac Admins Foundation collaborates with Apple, Inc (NASDAQ:AAPL) to provide vouchers to applicants with financial need, promoting inclusivity and affordability in accessing certification exams.
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Methodology
To list the states with the highest labor shortages, we used unemployment level for the number of workers available in each states and utilized the averaged data between September and November 2023 from the Bureau of Labor Statistics. We calculated the ratio of workers available for every 100 job openings. The list is presented in descending order.
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15. District of Columbia (DC)
Unemployed Workers for Every 100 Job Openings: 50
DC is facing a major deficit in case workers, with vacancies reaching approximately 30% in the School Behavioral Health Program. Despite efforts like Operation Make Movement to expedite housing subsidies, staffing constraints persist, with a workforce survey revealing a 21% vacancy rate across organizations. To address this crisis, the D.C. Council approved a bill funding graduate degrees in social work, aiming to alleviate shortages by subsidizing education for 20 Washingtonians initially, with plans to expand to 40 annually.
14. Colorado
Unemployed Workers for Every 100 Job Openings: 50
Colorado has a strong labor force with a 68.8% participation rate, 5 points above the national average, and a pre-pandemic unemployment rate of 3.2%, below the national average. Before the pandemic, there were 79 workers for every 100 open positions. As of August 2023, the labor market has largely recovered, with unemployment and participation rates back to pre-pandemic levels. However, a worsening worker shortage is evident, with only 50 workers available for every 100 open jobs.
13. Tennessee
Unemployed Workers for Every 100 Job Openings: 50
As one of the states with the worst labor shortages in 2024, Tennessee is also struggling with a concerning teacher shortage, as revealed by a recent analysis from the State Collaborative on Reforming Education (SCORE). Statewide, there are approximately 60,000 teachers in the workforce, with over 1,000 unfilled vacancies, a third of which are in the critical K-5 grade band. While nearly a third of districts reported no vacancies, the state’s shortage aligns with the national average.
12. Virginia
Unemployed Workers for Every 100 Job Openings: 47
As one of the states that need the most workers, Virginia was ranked in the “more severe” category, according to the US Chamber of Commerce. Data reveals a stark contrast from pre-pandemic times, with 245,000 job openings and only 112,959 unemployed workers, resulting in 47 available workers for every 100 open positions. Despite rebounding labor force participation rates and low unemployment figures, the state faces challenges in filling vacancies, exacerbated by factors like decreased immigration and pandemic-induced workforce shifts.
11. Montana
Unemployed Workers for Every 100 Job Openings: 47
The state of Montana is plagued with a severe labor deficit with a Worker Shortage Index at 0.47. Job openings have increased to 35,000 while only 14,691 are unemployed. The labor force participation rate stagnates at 62.7, with a mere 2.5% unemployment rate. The quit rate peaks at 3.1, confirming dissatisfaction, while the hiring rate rests at 4.8.
10. South Carolina
Unemployed Workers for Every 100 Job Openings: 43
South Carolina is fighting with an alarming labor shortage, particularly evident in the agricultural sector. Titan Farms, one of the largest peach growers on the East Coast, is currently facing the challenge of filling 1,200 positions with only two U.S.-born workers willing to take on the job. The peach industry alone contributes $400 million to the state’s economy, yet without the federal H-2A work visa program, crucial agricultural businesses like Titan Farms would struggle to survive. The shortage stems from a shift in the workforce as more South Carolinians pursue careers outside of farm labor, opting for professions such as electricians, bankers, and lawyers.
9. Massachusetts
Unemployed Workers for Every 100 Job Openings: 43
Massachusetts faces a profound labor shortage with significant numbers indicating the severity. Approximately 10,000 Baby Boomers retire daily, contributing to the workforce gap. This situation is exacerbated by a national statistic showing 3.5 million more job openings than available workers. To address this, immigration reform is crucial, as immigrants significantly contribute to sectors like healthcare. Moreover, tackling housing costs and living expenses is vital for attracting and retaining talent within the state.
8. Maine
Unemployed Workers for Every 100 Job Openings: 43
Despite historically low immigrant populations, Maine’s recent influx from Somalia and other African countries, particularly in cities like Portland and Lewiston, has supported the foreign-born demographic by about 1% between 2000 and 2022. The proposed Office of New Americans aims to address shortages in critical sectors like healthcare, education, and construction.
7. Alabama
Unemployed Workers for Every 100 Job Openings: 43
Alabama is facing a critical labor shortage, with only 57% of working-age adults actively seeking employment as of September 2023. This shortage amounts to nearly 100,000 more job openings than available workers. The scarcity of labor empowers workers to demand better wages and benefits, but it also poses challenges for businesses and policymakers.
6. Nebraska
Unemployed Workers for Every 100 Job Openings: 40
Nebraska faces a workforce challenge with only 40 available workers per 100 open jobs, resulting in a Worker Shortage Index of 0.39. Despite a low unemployment rate of 2.0%, job openings stand at 54,000 against 21,145 unemployed workers. The state’s labor force participation rate is 69.2%, with a quit rate of 2.3% and a hiring rate of 3.6%.
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Disclosure: None. 15 US States With The Highest Labor Shortages is originally published on Insider Monkey.