The number one question from employers is about worker supply. 

Major industries in Spokane are impacted by worker shortages. Where are the workers? The reasons are many. Workers are retiring and childcare is a concern. Some workers are going into self-employment. One of the characteristic changes in the workplace is a pandemic holdover of fear of contact with people. And, as job opportunities increase, workers are resigning current jobs and changing industries as a better fit to their interests and wage needs.

The movement of workers has created opportunities for workers who may have been overlooked, including teenagers to fill worker gaps. However, even with this demographic, the supply of younger workers has diminished. According to the Bureau of Labor Statistics (BLS), over half of teens in the labor force are working. More than at any point over the last decade. 

As openings increase and the competition for workers increases, bargaining power shifts from employers to workers, and employers will not only face higher wage and benefit costs, but may also need to alter their definition of the workplace. 

Business leaders know they need to be clear and decisive about how much remote work will be allowed and in what types of jobs, how hybrid work models will be managed, and where workers can be located. They also will need to make investments in technology because of the new “workplace.” This investment in new technology might also need to be supported by skill-training upgrades for existing employees. 

To assist employers as they make critical decisions on workers and the workplace, the Washington State Employment Services Department is sharing data with 12 other states to research not only worker movement but also their changes of industries, occupations, and wages. 

Working under the umbrella of the BLS, we are analyzing data now, examining trends and changes in workers and workplaces, which started during the height of the pandemic. We are investigating both temporary trends during the pandemic and permanent trends going forward in markets and worker supply. New characteristics of workers are emerging. 

Some of our early analyses indicate workers quit their jobs as the pandemic began to ease and the economy began to reopen. BLS data series (JOLTS) show that the quit rate did increase starting in mid-2020. 

Hiring rate data from the same program show that the rate of hires also increased relative to pre-pandemic levels, suggesting that rather than quitting jobs to retire or otherwise leave the labor force, perhaps people are quitting to pursue a different job. A high number of quits out of what was considered essential industries also was reported indicating worker burnout. 

An example of this is that during the pandemic, healthcare workers were given many challenges and worked long hours in fear of COVID-19, causing worker burnout. As a result, some of those workers decided to change industries but keep the same occupation, such as in the insurance and home healthcare industries. 

Other reasons for a high number of quits are workers who are re-evaluating priorities, perhaps pursuing a preference for remote work and self-employment. A Pew Research Center survey of U.S adults conducted in February of 2022 found that 53% of employed adults who quit say they have changed their field of work or occupation at some point in the past year.

In comparing payroll data with other states, it looks like some workers are pausing their re-entry into the labor force. However, the longer they pause their job search, the more likely those workers become discouraged. Their ability to re-enter the labor force after being unemployed for so long decreases. When workers drop into the discourage category, it understates the share of workers who are out of work. It’s not just fears, but other factors that come into play for workers. A significant factor is childcare, as families grapple with rising childcare costs.

With discouraged and displaced workers increasing and labor shortages looming, we need to fully engage all workers. The re-employment work being done in partnership with Employment Security, WorkSource Spokane, and the Spokane Workforce Council are essential to maintaining a healthy labor pool. 

Spokane is a regional job hub and attracts skilled workers from a wide area. The new jobs that have been added to our job base have also attracted workers. Which is the reason, I believe, Spokane and neighboring rural counties are positioned well to attract workers during a nationwide worker shortage. 

To keep up on data trends for both workers and employers, please visit our website, at esd.wa.gov/labormarketinfo. You will also find projections for occupations in demand and those that are declining in our labor market, along with projections on the growth of all industries.

Doug Tweedy is the regional economist here for the Washington State Employment Security Department.